How to Respond to a Search Warrant

The fact that a search warrant is being executed also signals that law enforcement has prioritized the investigation. They generally require significant planning and resources. Search warrants also offer law enforcement the strategic advantages of surprise and control, and may indicate a lack of trust that the target would comply with either a subpoena or a consensual request for records.

How a company responds to a search warrant is important. Responding inappropriately can be costly and could potentially lead to independent criminal exposure. For instance, obstructing a search is itself a criminal act. Obstruction may come in many forms, including interfering with the law enforcement agents executing the search, providing false information or statements, threatening or instructing employees to refuse to be interviewed or to lie or to mislead the agents, and destroying potential evidence. The cover-up may be worse than the crime, may provide critical evidence of intent to commit the underlying crime, and may be even less defensible and easier to prove than the underlying crime. Care should be taken to prevent making a bad situation worse.

Contact Outside Counsel

If time permits, outside counsel with experience in criminal matters should be contacted immediately. Otherwise, steps may be taken that may seem to the layperson to be perfectly proper and appropriate, but in reality constitute obstruction. Having a lawyer who is trained to handle these sensitive issues is critical.

For instance, although threatening or instructing employees not to speak with law enforcement is unlawful, there is no legal obligation for anyone to speak with agents, and each employee may decide whether or not to participate in an interview. How this is communicated to the employees is critical. Company counsel should advise employees that they can participate in an interview or decline to do so, and that it is entirely their choice. Company counsel should also tell employees that if they decide to speak to the agents it is critical that they tell the truth. Such guidance should be in writing to all employees to avoid any doubt down the road about the appropriateness of counsel's communications with employees.

In an ideal world, counsel for the employees should also be engaged at this stage, so they have an independent adviser who can guide their actions during the search. There can be no doubt that the company and the individual employees would be well-advised to have counsel with experience addressing the unique issues and conflicts that arise in criminal investigations. Under such stressful conditions, employees must be careful to relay only information that they know, and to avoid guessing or speculating. They should also understand that they are free to decline, postpone, or stop an interview, and all of these decisions may be better informed with advice from competent, independent counsel.

It is also important to know that law enforcement officers, in attempting to gather evidence, confessions and statements, are not required to be truthful. Employees may be seeking assurances of leniency or immunity, but the agents executing the search warrant will have no authority to confer such leniency or immunity without a prosecutor's approval.

Anything employees say can be used against them in a criminal prosecution or civil enforcement proceeding even without Miranda warnings being given. Employees may mistakenly assume that because they were not given the warning that their statements cannot be used against them. Because these interviews are typically consensual, and the interviewees are not in custody or under arrest, such interviews may not require agents to provide Miranda warnings.

If employees decide to participate in interviews, and no separate counsel has been secured for them at this stage, company counsel should request to sit in during the law enforcement interviews with employees so there is a witness, in case of a dispute in the future between the witness and the agents about what precisely was said. It is important, however, that employees know that company counsel represents the company, not the employee. The agents may refuse to allow company counsel to attend the interview, and it is the employee's choice whether he or she proceeds with the interview.

Keep Defenses Up (Politely)

The company should seek to maintain any defenses regarding possible invalidity of the search warrant or the search. To that end, company counsel should review the search warrant carefully, and monitor the locations being searched and the items being seized. If it appears that the agents are searching areas or seizing items beyond the scope of the warrant, a polite objection at the time of the search warrant will preserve future objections, and will prevent law enforcement from claiming that consent was provided. It is important to be polite, but the company should resist pressure or an inclination to provide consent. The search warrant provides the authority for the search. The company should not consent to additional searches not already authorized by the warrant. Such consent may eliminate legal defenses regarding the legality and validity of the search.

Similarly, care should be taken to protect privileged materials. Counsel should alert law enforcement to the presence and location of privileged material, and politely request that these materials not be reviewed or seized. If law enforcement insists on reviewing or seizing these materials, the objection and law enforcement's failure to comply with requests to protect privileged information should be noted. The contents of any privileged information should not be voluntarily disclosed or agreement given to waive the privilege. Any waiver, even one believed to be narrow, may eviscerate the entire privilege.

Communicate With Law Enforcement, During and Even After Search

Maintaining open and streamlined communication with law enforcement throughout the search — and after — must be a priority, to facilitate gathering as much information as possible about the investigation and to minimize the disruption of the company's operations. For instance, the company should request that digital images be made of electronically stored information rather than entire computers being taken. Law enforcement should be provided the contact information for company counsel. Communication with the potential prosecutor should also be established as soon as possible.

The company's public relations department should be involved and apprised of the situation. Search warrants frequently generate inquiries from the press. The company and its counsel should carefully consider any response and public statements. Obviously, these statements, too, may be used against the company by law enforcement.

Inventory Search Areas and Seized Items

After the search, it is important to memorialize what areas were searched and what items were seized. The company is entitled to a complete inventory of all of items seized by law enforcement. This inventory should be compared with the company's own account of items seized and locations searched. It is also important to identify and interview employees with knowledge about the search. A report should be prepared regarding these facts to memorialize them and to assist in preparing future defenses, including potential challenges to the warrant, the search, and the seizure of particular items.

Analysis

Being the target of a search warrant is stressful, disruptive, and potentially disastrous for a company. Taking proper steps from the beginning can help keep a bad situation from becoming worse. The company should hire independent defense counsel to represent the company in the search and the subsequent criminal investigation, and rely on defense counsel to be the liaison and primary contact for law enforcement during the execution of the search warrant. The company should also consider recommending that counsel be obtained by executives or board members and employees who may have criminal exposure. Defense counsel will want to conduct their own investigation and gather facts pertaining to the materials seized by the government to better assess the situation and advise the company on strategies for reducing risk and minimizing potential criminal consequences.

If there is one lesson to be learned from the foregoing, it should be that handling the response to a search warrant is delicate and complicated, and there are tripwires along the way. Thus, prudent steps need to be taken to protect the company, and its employees, during and after the search.

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Marjorie Peerce is a member of the Board of Editors of Business Crimes Bulletin. She is the co-Managing Partner of Ballard Spahr's New York office and focuses on white collar criminal defense, securities enforcement, and general commercial litigation. Mark Kokanovich is Of Counsel in Ballard Spahr's Phoenix and Los Angeles offices. He is a former Assistant U.S. Attorney and focuses his practice on investigations and white collar criminal defense.