Historically, the search warrant has served as a basic tool of law enforcement investigating criminal conduct. In recent years, the search warrant has been turned to the pursuit of allegedly unlawful business conduct. The Enron, Qualcomm, and Health South investigations, as well as many lesser known cases, have been driven by evidence seized with the use of search warrants.
It is impossible to anticipate the search of a business premises because a search warrant is obtained by law enforcement officers in secret. However, it is possible for a business to prepare against the most harmful consequences of a search. Experience teaches that companies and employees not prepared for a search often assist the investigation in ways that the search warrant itself could not. The employees do this by waiving privacy rights as to evidence not covered by the warrant, by providing specific information about the location of harmful evidence, and by agreeing to interviews. Businesses and business people do these self-harming acts because they want to avoid being seen as defensive or conscious of their own culpability and because they do not understand their legal rights. The purpose of this article is to explain those rights in general terms.
What Is A Search Warrant?
A search warrant is a judicially issued authorization to search a particular place for a particularly described evidence. It can only be issued by a court, based upon factual representations made by law enforcement officers under oath. In general, police agencies have no lawful right to search a business premises or home. A search warrant is obtained without any notice to the person or persons whose premises are the subject of the warrant. Thus, when a warrant is executed, it generally comes as a complete surprise to the people inhabiting the premises being searched.
Because the warrant is a court order, it may not lawfully be refused or ignored. However, the search warrant itself can be challenged in court at a later date on the grounds that it was unlawfully issued. If the challenge to the search warrant is successful, the fruits of the search are suppressed and may not be used by the government nor may any leads gained from that evidence be pursued by the government.
It is always part of the government's strategy in executing a warrant to obtain evidence from any available source. The most obvious other source for evidence is the knowledge of the company officers or employees who are present at the time of the search. As often as not, the evidence gained by interviews of the people at the premises is more significant than the physical evidence seized. Remember that a search warrant does not authorize anything other than seizing physical evidence. Specifically, the warrant does not authorize the police to interview any witnesses. Law enforcement officers may, however, interview any witnesses who are willing to speak to them.
If a search occurs at a client's premises, it is lawful and proper for the company's management to advise the employees they have a right to decline a government interview, although management should make clear that it is the employee's decision whether to submit to an interview. Law enforcement officers conducting interviews during the execution of the search will not provide employees with Miranda warnings to tip them off as to their legal rights, because police are not required to do so in noncustodial interviews.
Often a criminal investigation hinges on the results of the search. If there is no lawyer present, it is especially important that the person in charge of dealing with the police know how to conduct himself or herself. The following is a brief synopsis of how to deal with the authorities during the search of a business.
Response To The Search
Establish A Point Person. When a search commences, one person ("the point person") must be in charge of dealing with the authorities. If there is no lawyer present, the point person should try to call a lawyer on the phone. Try to have a lawyer speak with the authorities who are present at the search, as police tend to show more deference to lawyers. A lawyer will also be able to advise the point person and remind him of how to act during the search.
Examine The Warrant. The person whose premises are being searched has the right to inspect the warrant before the search commences. The point person must take this necessary step because the warrant has to be specific. The warrant will detail the area where law enforcement is allowed to search (i.e., a description of the building or particular rooms in the building) and the specific items they seek. The warrant gives the authorities the power to search in these specific places only and for these specific items only. The warrant's limits must be obeyed. The officers are not allowed to search for a specific item in a place other than the place this item would normally reside. For example, if the warrant authorized the seizure of a pickup truck, the officer could not look in a file cabinet to find the truck.
Follow And Object. The point person should try to limit the officers to searching only what the warrant allows. If the officers take items that the warrant does not authorize them to take, these items may be suppressed as evidence because they were improperly seized and thus would be inadmissible in court. Rendering items inadmissible can strengthen a defense tremendously. The point person should make objections to the authorities when they exceed the scope of the warrant. Although the point person should object when law enforcement officers exceed the scope of the warrant, he/she should take care not to interfere with the search. Such phrases as "You can't search that" will suffice. Although the authorities will probably disregard these objections and take what they choose, making the objection can be significantly helpful to successfully challenging the search later.
Do Not Consent. It is equally crucial that the point person or any other employee not consent to any searches or other requests not listed in the search warrant.
Make A Record. The point person must make a detailed record of the events that take place during the search. This information should include the names of the officers present, the exact time of events, exactly what was said, and who said it. Any other representations made by the officers as to their authority to search or seize evidence should be noted. It is very important to note the objections made to the authorities because the authorities will make their own record of the events and it will heavily favor their side. These records will be used in court.
Make Sure That The Authorities Respect Privileged Documents. In business settings, there are often documents that fall under the protection of the attorney/client privilege or other privileges. The authorities cannot see or take these documents, regardless of the scope of the warrant. The point person must make sure that the authorities know which documents, if any, are privileged by pointing out that attorney/client communications appear in particular files. Similarly, if the company employs an in-house lawyer, the company representative should identify the lawyer's office. If the authorities persist, a good compromise would be to suggest that the privileged documents be placed in a sealed envelope, only to be opened after the authorities have spoken with the judge.
Protecting The Employees
Employees have the right not to talk to police without a lawyer present. Federal law enforcement officers have a policy of not talking to a witness if the witness demands a lawyer be present for the interview. It is in everybody's best interest to make the employees aware that they do not have to talk without a lawyer.
The lawyer for the corporation generally will not also represent corporate employees because of the potential for conflicts of interest. To the extent permitted by the corporate bylaws and applicable corporate law, however, the corporation can pay the fees of a lawyer for the employees. Thus, as soon as the corporation becomes aware of an investigation - and ideally before the execution of a search warrant - the corporation should consider notifying employees likely to be contacted by law enforcement of what their rights and obligations may be if there is a search of the premises. Generally, employees should be informed that such contacts may occur; that the employee is free to decide whether or not to speak with law enforcement; that if the employee decides to speak, he or she must tell the complete truth; that the employee has the right to consult counsel before making the decision whether to speak with law enforcement; that the corporation's counsel cannot represent the employee; and that the corporation will pay for an attorney for the employee. Whether and how to notify employees about an investigation and what should be done in the event of a search is a decision that should be made with the assistance of outside counsel experienced in criminal law issues.
The Relationship Between Criminal Liability And Civil Liability
It is a fair assumption that in every instance of a federal business crime, there will be one or more civil cases brought against the company or its directors and officers for damages based upon the alleged misconduct. Allegedly victimized shareholders can charge in a derivative context that the corporation's interests have been damaged; claims can also be brought by members of the public alleging they have been damaged by the conduct in some way.
Because the criminal case is resolved first, the issues of the civil case may have and often will have already been determined by a court and jury. This means as a practical matter that the corporation's civil liability can be decided by a criminal conviction arising out of the same incident. What this underscores is the significance of acting vigorously and vigilantly in defense of the criminal case from the outset.
Corporations must anticipate that they may someday be the subject of a search. They should adopt the practices and procedures suggested herein to provide them with the best possible response to a search. If a search occurs, the corporation should contact its lawyers immediately.
Brian O'Neill, a Partner in the firm's Los Angeles office, has successfully defended corporate and individual clients in a variety of fraud prosecutions involving securities, defense contracting, tax, bankruptcy, commercial bribery, customs violations, and environmental crimes, among others. His representative criminal clients include officers and employees of major defense contractors, oil companies, commercial importers, financial institutions, labor unions, law firms, accounting firms, politicians, and professional athletes. He may be reached at (213) 243-2856.