White Collar Defense: How Do You Respond to Federal Investigations?

White collar defense covers federal crimes: securities fraud (insider trading, market manipulation, accounting fraud), wire/mail/bank/healthcare fraud, money laundering, tax fraud (26 U.S.C. §§ 7201, 7206), FCPA violations, public corruption (18 U.S.C. § 201), RICO conspiracies, obstruction (§§ 1503, 1512), and false statements (§ 1001). Most white collar crime matters originate from regulatory referrals, whistleblower tips, suspicious activity reports (SARs), or parallel civil litigation.

White collar investigations involve overlapping federal agencies: DOJ Criminal Division (Fraud Section, Money Laundering, FCPA Unit), US Attorney's Offices, FBI, SEC Enforcement, IRS-CI, FinCEN, OFAC, CFTC. Parallel proceedings often include state AGs and SROs (FINRA, NYSE). Grand jury investigations operate under Federal Rule 6(e) secrecy, with subpoenas (subpoena duces tecum for documents, subpoena ad testificandum for testimony) compelling cooperation absent valid privilege.

Securities fraud under 15 U.S.C. § 78j(b) and SEC Rule 10b-5 prohibits material misrepresentations or omissions in connection with securities transactions, with insider trading (classical and misappropriation theories under US v. Newman and Salman v. United States) requiring personal benefit to the tipper. Section 1348 provides broader criminal authority post-Sarbanes-Oxley. Securities fraud cases involve parallel SEC civil enforcement (disgorgement, civil penalties, officer/director bars) and DOJ criminal prosecution, with overlapping evidence but distinct burden of proof.

Wire and mail fraud statutes (18 U.S.C. §§ 1341, 1343) require a scheme to defraud, intent to defraud, and use of mails or wires in furtherance of the scheme, with each transmission a separate offense (20 years maximum per count). Honest services fraud (§ 1346) survives post-Skilling for bribery and kickback theories. Wire fraud charges are favored as catch-all statutes covering financial misconduct involving electronic communications, including emails, wire transfers, and online transactions, with venue often available in multiple districts.

Responding to grand jury subpoenas requires assessment of scope, custodian identification, document collection under litigation hold, privilege review, and timely production with negotiated narrowing where possible. Target, subject, and witness designations affect strategy: targets face indictment, subjects may face exposure, witnesses generally do not. Effective white collar investigations response coordinates document production with proffer sessions, queen-for-a-day agreements, and immunity considerations under 18 U.S.C. § 6002.

Internal investigations should begin immediately upon receipt of subpoenas, whistleblower complaints, regulatory inquiries, or credible internal reports of misconduct, typically conducted by outside counsel under privilege to preserve attorney work product. Upjohn warnings (employee not personally represented) and disclosure decisions affect privilege scope. FCPA matters under FCPA law require attention to extraterritorial conduct, books-and-records violations, internal controls failures, and the 2023 Clawback Policy.

DPAs and NPAs in white collar defense allow corporations to avoid conviction by accepting agreed facts, paying penalties (often hundreds of millions of dollars), implementing compliance reforms, and submitting to monitorships (2-5 years). BSA violations under money laundering statutes frequently produce the largest corporate resolutions, with banks paying $1B+ in coordinated DOJ/Treasury/OFAC/state settlements. Individual prosecutions increasingly proceed parallel to corporate resolutions following the Monaco Memo's individual accountability focus.

Sentencing in white collar defense applies the USSG (United States Sentencing Guidelines) with loss amount as primary driver (§ 2B1.1: each $1.5K loss adds offense levels), enhancements for role (manager/leader, abuse of position of trust), number of victims, sophisticated means, and substantial financial hardship. Fraud sentencing guidelines calculations are advisory post-Booker, with judges considering § 3553(a) factors; downward variances for cooperation, age, family circumstances, and rehabilitation regularly produce sentences below guideline ranges.