While I generally think that compliance and ethics personnel worry too much about the risks of individual liability arising from their work, two client experiences from my days as a criminal defense attorney may be worth briefly recounting on this issue.
Neither resulted in charges against my clients (nor were charges, in my view, remotely warranted in either) and so I can write only in a general way about each. Still, knowing the theories of the prosecutors in these investigations may be of use for C&E professionals in steering clear of the zone of personal danger.
Matter No. 1
Prosecutors were investigating several consumer products companies (including one that I represented in the inquiry) for various types of possible wrongdoing and formulated a theory that as a matter of course the companies’ regular inside and outside counsel had engaged in a fraud on regulators/courts and obstruction of justice by trying to claim attorney-client privilege for communications that in fact did not involve legal advice.
What makes this relevant to C&E is the real possibility that communication regarding training, audits, investigations, risk assessments and program assessments will be marked privileged where legal advice could be – but is not actually – involved, or without sufficient documentation of such involvement.
Matter No. 2
Prosecutors were investigating a health care company for fraud and formulated a theory that an internal investigation conducted by the organization’s regular outside counsel (whom I represented) was not a good faith inquiry but rather a sham designed to “paper the files,” meaning to make it look like the company was engaging in real self-policing when such was not the case. Here, too, no charges were brought against my clients, but I can certainly imagine circumstances involving a truly phony internal inquiry where the result could be different.
A final point: the more prosecutors rely on internal investigations to make enforcement decisions involving companies, the greater the likelihood that at some point charges will be brought under either or both of the above theories. Not a happy thought, but forewarned is forearmed.
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