Financial Records Subpoenaed.

Section Execution

What Does a Federal Financial-Records Subpoena Signal About Your Situation?

A federal grand jury can issue subpoenas for documents and other evidence before it takes the step of recommending an indictment or any criminal charges. If you have been served with a grand jury subpoena for financial records, it does not necessarily mean that you have been indicted or that criminal charges are coming.

A grand jury subpoena duces tecum is a demand that you produce specific documents, records, or tangible evidence. In contrast, a subpoena ad testificandum is a demand for your testimony. Federal grand juries have broad authority to seek evidence before taking an indictment, and, unlike federal prosecutors and federal agents, they are generally not required to demonstrate probable cause before they can issue a subpoena.

While you will need to respond to a grand jury subpoena, and you will need to be very careful that you respond with the assistance of experienced counsel, you should avoid assuming that you are in trouble with the federal government just because you have received a subpoena duces tecum.

A grand jury subpoena is not an indictment and it is not a criminal charge. With that said, it does signal that you are under investigative scrutiny, and it is imperative that you do not do anything that could put your case, or your future, at risk.

Grand jury proceedings are excluded from the public, and there are significant legal protections and prohibitions with respect to the confidentiality of grand jury matters. As a result, the grand jury investigation is typically a secret process, and you likely will not be able to learn much through independent means. We can explain more about what this means in your specific case during your initial consultation at no out-of-pocket cost to you.

A federal financial-records subpoena does not mean you will be indicted. It does mean that you need to be very careful about how you respond.

It also means that your response should be informed by the advice of your attorney. With this in mind, we encourage you to take the following steps:

• Seek out experienced defense counsel
• Do not destroy or destroy any relevant documents or records
• Wait for your attorney to advise you on your next steps

Which Financial Records Can Be Demanded from You or a Third Party?

A federal grand jury subpoena duces tecum for financial records can seek a wide range of documents, records, and other forms of information. The records that the grand jury is entitled to obtain from you, or from a third party, include, but are not limited to: - Bank records; including statements, transaction logs, and records of deposits and withdrawals from checking, savings, credit, and brokerage accounts

• Tax records; including individual and corporate tax returns, W-2s, 1099s, and any forms filed with the IRS or other tax authorities
• Accounting and financial statements; such as ledgers, payroll records, balance sheets, profit and loss statements, and audit reports
• Legal and contractual documents; including business contracts, partnership agreements, mortgage documents, and lease agreements
• Communications and other documents, such as emails, digital messages, letters, memos, and notes concerning financial transactions The timeframe for the financial records that a grand jury can demand may vary, but it can also range back several years. Following the production of financial records in response to a grand jury subpoena duces tecum, you may find that prosecutors have additional questions for you, or that they request further documentation or issue additional subpoenas. This is a common aspect of the grand jury process, as prosecutors use the information gathered to refine their understanding and determine their next steps. While the records you produce in response to a grand jury subpoena duces tecum may expose your financial or business dealings, receiving a subpoena does not guarantee that you will be indicted. While the records you provide may establish the grounds for indicting another person or business entity, the grand jury proceedings may end with no charges filed against the recipient of the subpoena. A federal subpoena can concern records held by employees, contractors, other companies, and other third parties. This includes business records held by employees of companies, and business records held by companies themselves.

How Should You Preserve, Challenge, and Produce the Requested Records?

Once you become aware of a federal grand jury subpoena, or even if you have concerns about an investigation that may have not yet led to a subpoena, your first and foremost duty is to ensure the preservation of all potentially relevant records. This includes not only paper files, contracts, and financial statements but also electronic data such as emails, text messages, and digital communications. Shredding documents, erasing electronic data, or altering records in any way after you become aware of a subpoena can be interpreted by federal investigators as “obstruction of justice,” and this can potentially be a serious criminal offense in its own right. Importantly, your obligation to preserve records applies regardless of your assessment of the subpoena’s validity. Even if you believe the records requested are irrelevant or the subpoena is improper, you must not destroy any evidence, and you should consult with an experienced attorney about how to handle these documents.

While you are obligated to comply with grand jury subpoenas that demand testimony or records, the same is not necessarily true for voluntary requests for interviews, statements, and documents from federal investigators and prosecutors. If you or a business associate are contacted by the FBI, IRS, SEC, or other federal agent, or if you receive an “invitation” to participate in a “voluntary interview,” you need to understand your rights and obligations before making decisions that could have lifelong consequences. Our experienced attorneys understand the nuances of dealing with these agents and can provide you with advice on how to proceed based on the specific circumstances involved in your case.

Responding to a grand jury subpoena also involves working with prosecutors and other government officials. When you engage a criminal defense attorney, your attorney can communicate directly with the federal government on your behalf to address the scope of the records requested, negotiate an acceptable deadline for production, identify communications subject to the attorney-client privilege, and discuss other relevant issues.

In some cases, the appropriate response to a federal grand jury subpoena is to quash or modify it. If you have grounds to object to a federal grand jury subpoena, your attorney can file a motion in federal district court requesting the judge to quash or modify the subpoena. The potential grounds for objecting to a federal grand jury subpoena include:

• The records sought are irrelevant to the investigation
• The subpoena is overbroad in scope
• The request is unduly burdensome or unreasonably expensive to satisfy
• The subpoena demands information subject to attorney-client privilege or other protections
• Defective service of the subpoena
• Lack of jurisdiction of the issuing grand jury

Does a Judge Approve Financial Subpoenas Before Service, and Who Can Issue Them?

The Right to Financial Privacy Act (RFPA) imposes specific procedures on certain federal requests for financial records. Under the RFPA, customers may be entitled to receive notice of the request and have an opportunity to object to the production of their financial records to the federal government. However, these protections apply in specific situations and are subject to various exceptions. Crucially, the RFPA does not govern all requests for financial records, nor does it apply in all investigative settings. So, even if a federal request for financial records falls within the scope of the RFPA, the government may be able to issue it without giving you notice or an opportunity to object. If the government seeks your financial records without adhering to the requirements of the RFPA or other applicable laws, you or your attorney may be able to object to the request or seek to have a court suppress the evidence. The RFPA rules do not require a judge’s prior approval of all requests for financial records, and the law does not impose a judge-approval requirement for subpoenas in all cases. Federal grand juries have the authority to issue subpoenas without approval, and prosecutors and other federal agents can request the production of records during the investigative phase of a criminal case without prior judicial review. While in a civil case, the party that filed the complaint has the authority to seek evidence through discovery, and the party that serves the subpoena must provide notice of its request. Criminal subpoenas and civil subpoenas are two very different things. Criminal subpoenas are used by federal grand juries and other government entities to gather evidence to support criminal charges or a grand jury investigation. A civil subpoena is used to gather evidence in private litigation. If you are involved in a lawsuit, subpoenas may be used to gather documents and records for trial preparation. Federal grand juries, government agencies, and private litigants all have different authorities and procedures for issuing and serving subpoenas for financial records. This means that the appropriate response to a subpoena depends entirely on who issued it, what information is being sought, and why. If you or your business has been served with a subpoena, it is important to engage experienced defense counsel, who can evaluate your situation and help you effectively challenge an improper request.

Speak With Counsel Before You Answer Anything

If agents have contacted you, the order matters: counsel first, answers second. Spodek Law Group has been practicing since 1976 and defends federal matters nationwide, coast to coast, from offices in New York, Brooklyn, Queens and Los Angeles. Call 888 348 8028.