Criminal Defense Lawyers

How Corporations Respond to Grand Jury Subpoenas for Records

When a corporation receives a grand jury subpoena requesting records, it can seem intimidating. However, with the right preparation and legal advice, responding properly is very possible. This article will walk through the key things for a corporation to consider when served with a federal grand jury subpoena duces tecum (a subpoena requesting records).

What is a Federal Grand Jury?

A federal grand jury is a group of 16 to 23 citizens that determines if there is probable cause that a crime has been committed. The grand jury can subpoena documents and witnesses as part of an investigation.Federal prosecutors prepare subpoenas that are then issued under the court’s authority. While technically the grand jury issues the subpoena, in reality it is federal prosecutors driving the process.Grand juries operate in secrecy, so recipients may not know details about what is being investigated. However, the subpoena itself should contain some information about the nature of the investigation.

Key Steps Upon Receiving a Grand Jury Subpoena

Upon receiving a grand jury subpoena, the corporation should:

• Carefully review the subpoena to understand what is being requested, including the scope and time period covered. This will help assess the burden of complying.
• Contact legal counsel immediately. Experienced white collar defense attorneys can provide guidance on responding.
• Notify key personnel who may have access to the records requested. Make sure documents are preserved.
• Consider negotiating the scope of the subpoena with prosecutors if it is overly broad.
• Assess whether grounds exist to file a motion to quash the subpoena if it requests privileged or unrelated materials.

Determining Who Should Handle the Response

Once the subpoena is reviewed, the corporation must determine who will be responsible for handling the response. This is typically someone with access to the records requested who can properly gather, review, and produce them.For small businesses, this may be the owner, president, or a manager. In large corporations, it may be delegated to the legal, compliance, or IT departments. Outside legal counsel can also assist with collecting records.The custodian of records will be the main point of contact with federal investigators and prosecutors about the response. They will also appear before the grand jury if necessary.

Gathering and Reviewing Documents

The next step is to gather all records covered by the subpoena. This includes both hard copy and electronic records. The custodian must diligently search all possible sources of responsive documents.All collected records should be reviewed for privilege and responsiveness. Non-responsive documents should not be produced. This review also ensures any privileged materials are excluded.If records are kept electronically, they must be searched thoroughly. Investigators may doubt thorough searches if responsive documents trickle in over time.

Protecting Privileged Materials

The attorney-client privilege allows corporations to exclude privileged communications and attorney work product from production. This protects confidential legal advice.To preserve privilege, documents should be carefully reviewed by legal counsel before production. If privileged records are accidentally produced, counsel may request their return.If privileged documents are withheld, the corporation must provide a privilege log describing them so prosecutors can assess the claim of privilege.

Producing Records to Investigators

Once the responsive records have been gathered and reviewed, they must be produced by the deadline in the subpoena. This is typically done by giving the records to the agents who served the subpoena.The corporation should organize the records logically and label them clearly. An index describing the records is also very helpful for investigators.If the volume of records is enormous, prosecutors may agree to staggered production. But the custodian must show a good faith effort to fully comply on time.Electronic records should be produced in their native format along with a description of how they were searched and compiled. This avoids disputes about the production process.

Following Up with Prosecutors

After producing records, prosecutors may have follow-up questions or request clarification. It is important for the custodian of records to respond promptly and thoroughly.If additional records are found later, those should immediately be produced as well. This shows the corporation is acting in good faith to comply with the subpoena.Extending full cooperation to prosecutors demonstrates the corporation has nothing to hide. It may also help minimize disruption from the investigation.

Appearing Before the Grand Jury

In some cases, prosecutors may request the custodian of records or other employees appear before the grand jury. This allows questioning about the response process and records produced.The corporation’s legal counsel can request to be present during the testimony to provide advice. However, only the witness is allowed in the grand jury room during questioning.Counsel should prepare the witness thoroughly to ensure consistent, truthful testimony that will not inadvertently waive any privileges. Invoking the Fifth Amendment must also be considered where appropriate.

Handling Privileged Materials

Corporate records do not have Fifth Amendment protections. However, individual employees may assert their Fifth Amendment rights if their testimony would be self-incriminating.Custodians of business records cannot refuse to produce documents based on the Fifth Amendment. However, they can assert the Fifth Amendment during questioning about specific documents.This requires very careful preparation with legal counsel to avoid waiving the Fifth Amendment right accidentally through testimony.

Consequences of Non-Compliance

Failing to comply with a federal grand jury subpoena can lead to serious consequences:

• Prosecutors may file a motion to compel compliance, which if granted can result in steep fines.
• The court may hold the custodian or corporation in contempt for refusing to comply, leading to additional fines or even jail time.
• Lack of compliance gives the impression the corporation has something to hide, encouraging more aggressive prosecution.
• Prosecutors may subpoena additional representatives or the CEO to testify before the grand jury.
• Obstruction charges are possible if prosecutors feel the response constitutes deliberate non-compliance.

Therefore, it is essential to fully comply with grand jury subpoenas or promptly file a motion to quash if valid reasons exist to limit or block the subpoena.

Seeking to Quash or Limit the Subpoena

If the recipient believes the subpoena requests privileged materials or is overly broad, a motion to quash or limit the subpoena may be filed. This asks the court to invalidate or narrow the scope of the subpoena.To prevail on a motion to quash, the recipient must show complying would be unreasonable or oppressive. This is difficult given the broad powers of the grand jury.Even if the motion is unsuccessful, the process may encourage prosecutors to negotiate limitations on the scope of the subpoena. This can ease the burden of compliance.Experienced white collar defense counsel can advise whether seeking to quash the subpoena is likely to succeed or is worthwhile as a negotiation tactic.

Conclusion

Receiving a federal grand jury subpoena for records can be an unnerving experience for a corporation. However, with proper preparation and legal advice, responding in a compliant and cooperative manner is entirely feasible.The key for corporations is to promptly consult experienced legal counsel, thoroughly gather and review responsive records, protect privileged materials, and fully comply with the subpoena.While the grand jury process is directed by prosecutors, responding appropriately demonstrates the corporation has nothing to hide. This helps minimize disruption and encourages prosecutors to view the corporation as a cooperative witness rather than a target.