Surviving Government Investigations
Justin Shur speaks with Lawyer Monthly on conducting corporate internal investigations in the US and beyond, as well as successfully representing clients during government investigations.
Are enforcement actions by Department of Justice (DOJ) against non-US actors for overseas business practices a trend that is likely to continue?
US enforcement authorities have shown a willingness to prosecute foreign companies and executives for activities that occurred abroad. And there is no reason to believe that this trend will not continue. A number of American criminal laws apply beyond US borders. The FCPA, for example, permits the prosecution of individuals and businesses that engage in bribery overseas, even when the connection to the US is, at best, tenuous. Over the years, these types of cases have become increasingly common.
In fact, DOJ recently charged a foreign national, among others, in connection with an alleged scheme to bribe a Russian state-owned entity. While the allegations involved a US entity, the conduct at issue occurred largely outside the US. The alleged bribe payment moved through shell corporations in the Seychelles, the United Kingdom, and the British Virgin Islands, then to bank accounts in Cyprus, Latvia, and Switzerland. Until the legal limits of the US’s jurisdiction under these statutes are tested more fully, we can expect more actions by DOJ against non-US actors for overseas business practices.
In a government investigation, how do you successfully explain your client’s position to a prosecutor?
It can be very challenging because the prosecutor or regulator may have an extremely negative view that developed over time. But if you credibly explain why a certain request is reasonable or ultimately why the case does not warrant prosecution, in my experience, the government is going to listen and take you seriously. Credibility is the key. While I aggressively advocate on behalf of my clients, I do so without playing games. I’m candid about the evidence and straight forward about why prosecution is unwarranted. If you are a straight shooter and have a reputation for honesty and fair dealing, your representations to the government are more likely to be treated as reliable and credible. But if you make representations that turn out to be inaccurate, or take positions that are over the top and unsupported by evidence, your presentation will likely work against you.
What is the first step in a corporate internal investigation?
Developing a plan at the outset is essential to the success of any investigation. As part of the planning process, a decision needs to be made as to who will conduct and oversee the investigation and the scope and goals should be defined thereon. An investigative strategy should be developed, including the key phases of the investigation and a timeline for completing each phase.
Conducting an internal investigation has many benefits. It allows the company to obtain and analyse the relevant facts, stop and remedy any misconduct, and develop a plan to mitigate any potential liability. To obtain these benefits, however, the investigation must be well-planned. Without a clear-cut strategy, the company may unintentionally do more harm than good.
Are there unique challenges to internal investigations that have a cross-border element?
There are many unique challenges associated with cross-border investigations. One significant challenge is foreign data protection and privacy laws. While a vital part of any investigation is to obtain and analyse the relevant documents, collecting documents in New York may be a great deal easier than doing so in Germany.
Many countries have enacted data protection and privacy laws that provide greater protection for data than the US. The data protected under these laws may include not only data ordinarily considered personal, but also business data that refers to employees, customers, or clients. As a result, these laws can create potential obstacles in an internal investigation, by limiting the company’s ability to collect, process, or review certain documents.
For this reason, at the outset of a cross-border investigation, it is important to be familiar with the data protection and privacy laws applicable to the company’s business. Depending on the jurisdictions where the relevant materials are housed, these laws may be a key consideration in developing a plan to gather documents and other information.
Justin Shur
600 New Hampshire Ave., NW
Washington, DC 20037
Tel: (202) 556-2005
Email: jshur@mololamken.com
Web: www.mololamken.com
Justin Shur, a Partner at MoloLamken LLP, is an experienced trial lawyer with a focus on representing clients in government enforcement and internal investigation matters. His clients include corporate entities, boards of directors, audit and special committees, and individuals facing difficult and often high-profile challenges. Shur’s work spans virtually every industry and regularly involves multi-jurisdictional issues throughout the United States, Asia, Europe, and Latin America.
MoloLamken LLP is a law firm focused exclusively on representing clients in complex litigation. We handle civil, criminal, and regulatory matters, as well as appeals, across the United States. Our clients span the globe. Our strength lies in the intellect, creativity, and tenacity of our lawyers and our experience in applying those traits to achieve great results for clients in serious matters.
