Corporate Grand Jury Investigation

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.