Corporate Grand Jury Investigation

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If you are a healthcare provider facing a corporate grand jury investigation, it is imperative that you begin a parallel internal investigation in order to preserve evidence and determine culpability. 

Chapman Law Group’s experienced health care counsel are practiced in assisting corporate clients facing federal and state governmental investigations. Our attorneys are seasoned healthcare litigators and former prosecutors and investigators who can provide you the knowledge and experience to prevent or mitigate potential culpability.

Who is a Target and Who is a Subject in a Grand Jury Investigation?

The first contact with the DOJ you receive during a federal criminal investigation may be a grand jury target letter. This should be an indication to you and your corporation that a grand jury has been convened, and your corporation — and potentially some of its employees, officers, and directors — is the target of a federal grand jury investigation.

For the purposes of federal criminal investigations:

  • A “target” of a federal investigation is a person to whom the prosecutor has “substantial evidence linking him or her to the commission of a crime and who, in the judgment of the prosecutor, is a putative defendant.” 
  • A “subject” of an investigation is a person whose conduct is within the scope of the grand jury’s investigation. 

Avoiding Search Warrants

During grand jury investigations, it is more common for DOJ attorneys to contact a target prior to the issuance of a search warrant. Often, federal agents and attorneys do not wish to engage in the unnecessary risk associated with conducting searches of the target of an investigation and would rather obtain information using grand jury subpoenas and a grand jury investigation. 

A person or entity receiving a target letter can be sure that they are the target of a federal prosecution. Often, prosecutors will send a target letter to the person or entity under investigation, informing the recipient that it is the target of a federal investigation and encouraging the target to obtain counsel to facilitate testimony in front of a grand jury or respond to grand jury subpoenas for medical records or billing data. 

The target letter serves multiple purposes: it puts the target on notice that destruction of documents may violate federal law, that the target has a right to obtain counsel, and that the target must answer any questions posed to the target truthfully. The U.S. Department of Justice has a sample target letter, and most districts send a similar letter.

Upon receiving a target letter or learning that a grand jury investigation has commenced, it is imperative that the corporation begin a parallel internal investigation to preserve evidence, gather testimony, and determine culpability. Relying on corporation counsel for this task is inappropriate because corporation counsel may be a witness to the grand jury and may lack the requisite knowledge and experience to defend a grand jury investigation.

Origin of a Target Letter

The origin of the target letter can be found in an amalgamation of federal case law, finding that subpoenaing the target of a federal investigation has the appearance of unfairness because the target may not have access to counsel, or may not be able to properly raise claims of privilege or Fifth Amendment claims.

As a result, it is the policy of the DOJ to issue target letters prior to issuing a subpoena to a target of a federal investigation. It is also DOJ policy to advise targets of their Fifth Amendment privilege against compulsory self-incrimination.

While the U.S. Supreme Court has declined to decide whether a grand jury witness should be warned of his or her Fifth Amendment privilege, in U.S. v. Mandujano, 425 U.S. 564 (1976), the Supreme Court took notice of the fact that prosecutors customarily warn “targets” of their Fifth Amendment rights. As a result of this custom, but lacking a constitutional imperative, DOJ policy requires prosecutors to warn targets of their rights prior to testifying before a grand jury.

If your corporation (or any other employee) receives a target letter, counsel can be certain that the federal government has begun an extensive investigation into the client’s practice and is likely concluding that investigation and seeking an indictment. This should send a message to counsel that counsel is already many steps behind the government, and the government has a significant informational advantage.

Upon receipt of a target letter, your counsel will speak with the assigned Assistant U.S. Attorney (AUSA) to find out as much information as possible about the potential charges, the subject matter of the case, and the client’s role in the investigation. Some AUSAs will be tight-lipped about the investigation, while others may be forthcoming with information in order to facilitate a pre-indictment resolution of the matter.

After learning as much about the case as possible, your counsel will consult with the client and obtain approval to begin a parallel or “shadow” investigation into the perceived issue to determine the client’s role and potential culpability. This will also assist in the early preservation, gathering, and production of documents pursuant to the inevitable grand jury subpoena that the client is likely to receive.

When a healthcare company is the subject of a grand jury investigation, you should consider retaining independent counsel to represent employees of the company. It is imperative that employees receive representation during the grand jury investigation to protect their rights, make them more comfortable during the process, and protect potentially privileged information.

While the successive representation of the corporation and its employees is theoretically possible if no conflict exists, this is not advisable. This is because counsel will likely lack sufficient knowledge of the subject and scope of the investigation, as well as the actions of all employees, to make a worthwhile conflict determination.

For Grand Jury Investigation Representation, the Attorneys at Chapman Law Group Are in Your Corner

If you are aware that your entity is the target of a grand jury investigation, it is imperative that you contact outside counsel to conduct a thorough parallel investigation. Failure to do so will leave you powerless to defend the eventual government allegations. In many cases, swift corrective action following an investigation will resolve disputes with federal regulators, including Health and Human Services (HHS), the Drug Enforcement Administration (DEA), and the Department of Justice (DOJ).

Our national health care fraud defense attorneys will aggressively defend your health care matter from internal investigation through trial. We handle multistate federal criminal matters investigated by the Department of Justice; state felony matters; and, where criminal sanctions are possible, investigations commenced by the HHS, FBI, DEA, FDA and DOJ.

Our healthcare-based criminal law and government investigations practice serves healthcare professionals across the U.S., with offices in Detroit, Michigan; Sarasota, Florida, and Miami; and Los Angeles/Southern California. Contact us today to learn more about our criminal law defense services.

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