All posts by : Andrew Feldman

Introduction

A ZPIC inspection can be onerous for any health care provider. Center for Medicare and Medicaid Services (CMS) has delegated its responsibilities to administer the Medicare and Medicaid programs, in large part, to private contractors. The original intent underlying this delegation of authority to private entities was to minimize government intrusion in the administration of federal and state health care programs. Nonetheless, many of these contractors operate with substantial, seemingly unfettered discretion and, at times, inspections conducted by these contractors resemble raids or searches conducted by law enforcement agents with one critical distinction — law enforcement agents must execute a search warrant supported by a probable cause unless the search is conducted pursuant to an exception to the search warrant requirement.

Zone Program Integrity Contractor (ZPIC) onsite inspections illustrate this point. ZPICs performed 777 onsite inspections in 2012 and maintain broad authority to conduct these inspections, as part of provider-specific prepayment audits designed to ferret out and prevent fraud and abuse. A ZPIC inspection may be conducted without providing sufficient advanced notice to the provider based on information obtained through data mining or predictive models, or based on third party complaints, including complaints received from former employees or patients. ZPIC inspections are also particularly unnerving in comparison to audits conducted by Medicare Administrative Contractors (MACs) or Recovery Audit Contractors (RACs), since ZPICs work closely with the FBI and the Office of the Inspector General for the Department of Health and Human Services (OIG-HHS).

During the ZPIC inspection, ZPICs will frequently request and obtain, among other things, copies of claims for certain services and patient records from the provider. ZPICs may also photograph diplomas, office space, and equipment. Following the inspection, a ZPIC investigator and a resident nurse will likely conduct several patient interviews at the patient’s home.   Equally as important, depending on the ZPIC’s findings after an inspection, the ZPIC may refer a provider to the Office of the Inspector General for the Department of Health and Human Services (OIG-HHS) for a potential civil or criminal prosecution or exclusion. If OIG declines the referral, then the ZPIC may still refer the case to the FBI or other state enforcement agencies. In addition to referring providers to OIG and law enforcement agencies, the ZPIC may place the provider on pre-payment review indefinitely due to a parallel criminal investigation, or the ZPIC may refer the matter to the MAC for recoupment of overpayments if the ZPIC concludes that the provider’s billing mistakes did not result from intentional fraudulent conduct. This Note will broadly address some of these concerns by recommending a series of steps providers might take prior to, during, and after a ZPIC inspection.

The Quiet before the Storm

If counsel is retained prior to an inspection, then the provider should be adequately prepared for a possible ZPIC inspection.

Review the OIG Work Plan. Review the OIG Work Plan, which identifies services covered by Medicare and Medicaid that OIG will more closely scrutinize as part of their ongoing efforts to prevent and deter fraud, to establish whether the provider may be susceptible to an audit or an inspection. By conferring with the Work Plan, the provider will be well-positioned to anticipate what segments of her practice may be of potential concern to OIG.

Conduct a Shadow Audit. Conduct a shadow audit to emulate the processes and procedures employed by ZPIC’s to detect possible fraudulent conduct. The purpose of the audit – much like the predictive models widely used by ZPICs – is to identify and remediate errors related to claims for payment and any documentation supporting those claims. As part of this process, providers should also reassess their coding, and coverage determinations, and should address any deficiencies related to supporting documentation, including signature requirements.

Determine Whether the Provider’s Claim Denial Rates Vary Significantly in Comparison to Other Similarly Situated Providers. As part of any audit, the provider should also undertake a review of the quality of the documentation verification policies and procedures to ensure that the provider’s claim denial rates do not vary significantly from the claim denial rates at other similarly situated providers in the same specialty and similar geographic region.

The Inspection

Review the Notice of Onsite Inspection. Once counsel learns about the ZPIC inspection, a copy of the Notice of inspection for facial sufficiency (time, date, location, correct address, organization name) should be obtained.

Obtain the Name of the Agency and the Names of the Investigators. On occasion, ZPICs will arrive for an inspection with OIG or other investigative agencies. Therefore, determining what agency is conducting the ZPIC inspection and how many investigators are on scene is critical. The names of each individual investigator should also be obtained.

Scope of the ZPIC Inspection. Determine the scope of the ZPIC inspection, the scope of any request for records, and whether the investigators intend on conducting employee interviews onsite.

Copies of Any Records the ZPIC Has Scanned or Copied Onsite. If the ZPIC has begun copying or scanning any records before counsel arrives on site, then a request that the ZPIC furnish the provider with a list (or copies) of those records should be made.

Establish Credibility and Cooperate with the ZPIC. The importance of establishing credibility and cooperating with the ZPIC cannot be overstated. Engaging in any conduct which may be viewed as obstructing, impeding, or impairing the inspection will not only undermine the provider’s credibility with the ZPIC, it may also subject the provider to criminal consequences, including obstruction of a federal audit.

Provide the Requested Claims and Documents. While, generally, the provider has 30 days to produce the requested records, if ZPIC determines that the books, documents, or records are “necessary for the reimbursement determination,” then the ZPIC may demand to inspect, examine, or copy those records. Under these circumstances, a failure to provide access to those records may result in adverse consequences to the provider, including revocation or obstruction charges. Accordingly, where feasible, bate-stamped copies of the claims and documents requested by the ZPIC should be provided to the ZPIC.

Manage Onsite Interviews of Employees. Although the ZPIC is statutorily authorized to inspect the provider’s business and to request medical records as a condition of participation in Medicare or Medicaid, there is no ancillary legal authority for conducting employee interviews on site to gather additional information related to the ZPIC inspection. So, even if ZPICs view employee interviews as an integral part of their quest to deter and prevent fraud, neither the provider nor her employees are required to consent to interviews.

Unsurprisingly, the employees may be inexperienced in managing or responding to a random ZPIC inspection. Likewise, employees may have a very limited understanding of what their options are in this scenario and may, believe that they are required to consent to interviews. At the same time, statements made by employees may be imputed to the provider for purposes of criminal or civil liability as non-hearsay statements. Therefore, to manage this process and to address these concerns, counsel or a representative of the provider should inform all employees that they are free to speak to the ZPIC investigators but they are not required to speak to them and that, should they decide to speak to the ZPIC investigators, they are entitled to have an attorney present during any interview.

Furthermore, to prevent unnecessary interviews on site, only essential employees – employees whose day by day responsibilities are relevant to the ZPIC inspection — should be made available for interviews and the provider may notify non-essential staff, e.g. administrative and secretarial staff, that, they are free to go home for the day. This is reasonable under the circumstances and should not be viewed as obstructive conduct.

Request an Extension. Where appropriate, a request for an extension to produce the necessary claims and supporting documentation should be made. An extension may be entirely reasonable when the inspection interferes with the provider’s ability to provide adequate care to her patients, or when the ZPIC requests a voluminous amount of documents, which are not readily accessible for production and copying on site. Indeed, often providers use third party vendors to submit claims and the provider may need additional time to coordinate the production and copying of the requested claims (and supporting documentation) with the third party vendor.

Obtain a Complete List and Copies of all Documents or Claims Obtained by the ZPIC. Before the ZPIC leaves, the provider should ensure that she has a complete list (and copies) of all the documents, claims, and records obtained by the ZPIC.

After the Inspection

Suspend Document Destruction Policies. A hold, or its functional equivalent depending on the size of the provider, should be placed on any applicable document destruction policies. Suspending these policies will accomplish two objectives: it will show that the provider is sincerely committed to retrieving and producing additional documentation upon request and will demonstrate that the provider is not seeking to impede, obstruct, or impair the audit by altering, deleting, or falsifying documents.

Anticipate Patient Interviews. The local ZPIC, along with a registered nurse, may interview patients. The purpose of patient interviews varies depending on the particular industry. For example, in the home health context, the purpose of a patient interview is to analyze medical necessity. By reviewing copies of the claims obtained by the ZPIC, the provider may determine which patients the ZPIC might interview. Claims and any supporting documentation obtained by the ZPIC during the inspection should be examined in order to identify and address any deficiencies.

Anticipate Employee Interviews at Home. Similarly, ZPIC investigators may show up at an employee’s home to request an interview. Employees should know in advance of that exchange that they may tell a ZPIC investigator that appears at their door that they would prefer that an attorney be present during any interview.

Conduct an Internal Investigation. After the inspection, the provider should conduct an internal investigation and engage in additional fact-finding. The objective of the investigation is to determine why the ZPIC conducted the inspection, why the ZPIC requested and obtained specific documents or claims, and ultimately, to educate the provider with respect to her options based on the investigative findings.

Employee Interviews. In performing the investigation, employee interviews should be conducted by in house counsel or outside counsel.

Claims Review and Gap Analysis. In addition, the provider should review any and all claims or documents obtained by the ZPIC during the inspection and evaluate the significance of those documents. The claims review should focus on, among other things, the accuracy of the claims and any supporting documentation, the legibility of all supporting documentation, and compliance with all signature requirements. An essential part of the claims review should also include a gap analysis to confirm whether the services in the sample set of claims obtained by the ZPIC during the inspection are covered by applicable Medicare regulations, national coverage determinations, and local coverage determinations. Further, the analysis should determine whether the provider (or the third party vendor) used incorrect codes or modifiers in the sample set of claims at issue.

Anticipate Additional Document Requests. Where applicable, bate-stamped documents and a cover letter listing all of the documents included in the submission should be provided to the ZPIC in response to any additional document requests (ADR’s) from the ZPIC. The organization of the documents will convey a specific theme to the ZPIC. Thus, the documents should be organized in a way that convincingly conveys a theme to the ZPIC. For example, if the theme is “sloppy record-keeping” or a failure to understand ambiguous or complex regulations, then it may be beneficial to supplement the record with documentation supporting that theme. Likewise, if the theme is that the ZPIC made a mistake, for example, through predictive modeling or data analyses, then the documents in the submission should be organized to best communicate that them and, where applicable, should include all necessary certificates, any applicable plans of care, and any other information to illustrate that claims are accurate, reasonable, and medically necessary.

Conclusion

ZPICs have broad authority to initiate proactive and reactive inspections as part of an audit, they view themselves as fraud fighters, and they work closely with the FBI. Therefore, even though these recommendations address general concerns that broadly apply to ZPIC audits and inspections, providers, and their counsel, should be well-equipped to manage and respond to a ZPIC onsite inspection.

Search Warrants: An Introduction

An owner of a corporation operating in a highly regulated industry calls counsel’s office to inform counsel that FBI agents are executing a search warrant at one of the corporation’s facilities and may begin gathering employees in a room for interviews. The corporation and its employees have no experience with responding to or managing search warrants. The owner is present at the facility subject to the search and wants to retain counsel to come to the facility and manage the search. How should counsel respond to the phone call and what steps should counsel take to minimize the impact of the search?

Preliminary Steps

During the initial exchange with the client, counsel should confirm how many agents are present at the site, whether agents are particularly interested in specific areas or divisions of the facility, and whether the agents requested that certain employees consent to interviews. After obtaining this information, counsel might take the following preliminary steps to reasonably assure that the corporation’s interests remain protected and that employees on site understand their individual roles, where applicable, during the execution of the search warrant.

Obtain and review the search warrant and request a copy of the search warrant affidavit. Because Federal Rule of Criminal Procedure 41(d) entitles the subject of a search to obtain a complete copy of the search warrant, counsel should advise the client to request a copy of the search warrant to understand the precise scope and nature of the search, the agency conducting the search, and the magistrate to whom the search warrant must be returned. Defects in the warrant should also be identified immediately by reviewing the warrant, including whether the warrant is overly broad with respect to the places to be searched, whether the warrant is stale, or whether the warrant fails to describe with adequate particularity the property to be seized. There is disagreement among district courts, however, as to exactly when the officer is required to provide the corporation with a copy of the warrant, the receipt of the property seized, or the affidavit supporting probable cause.

The Supreme Court has also noted, in dicta, that neither the Federal Rules of Criminal Procedure nor the Fourth Amendment imposes a requirement upon the officer executing the search to present the property owner with a copy of the warrant before conducting the search.

This seemingly adverse precedent does not necessarily mean that executing officers will not furnish a copy of the warrant to the corporation before the search as a matter of best practices to avoid future litigation, including evidentiary hearings in connection with motions to suppress or emergency motions for return of property pursuant to Federal Rule of Criminal Procedure 41(g), nor does it mean that an Assistant United States Attorney (AUSA) would not be receptive to such requests. Thus, counsel should instruct the corporation to obtain the warrant and a copy of the probable cause affidavit at the earliest possible time although, generally, courts require the filing of a motion to unseal the search warrant affidavit in order to obtain that affidavit.7

Identify the agents on site and contact the agent in charge or the AUSA. A representative of the corporation, or contact person, should obtain the names of the agents on site, including the agent in charge (AIC), and request the name of the individual AUSA responsible for supervising the ongoing investigation. After someone obtains that information, counsel should contact the AIC, and whenever possible, the AUSA, to inform both of them that counsel represents the corporation. Establishing a rapport with the AUSA is critical since she may provide valuable information with respect to the direction of the ongoing investigation. It will also be in the corporation’s best interests to maintain an amicable relationship with the AUSA if the corporation decides to voluntary disclose violations and cooperate with the government.

Communicate ground rules for the search to employees. The client should also assign a representative of the corporation to communicate the following information to employees: (1) the agents are on the premises to conduct a search; (2) the corporation does not know if any of the employees are targets of the search or an ongoing investigation; (3) employees should not engage in any obstructive conduct or alter, delete, or remove any records, equipment, or electronically stored information (ESI) on site; (4) agents may try to interview employees, but the employees are not required to speak to the agents;9 and (5) employees should not create or sign any documents on behalf of the corporation without first conferring with their appropriate supervisor.

Designate note-takers and begin conducting an internal accounting of the items seized. The corporation should also designate at least one employee to take notes while the search is underway. Note-taking accomplishes significant objectives for the corporation. First, employee observations contained in notes may provide the legal basis for challenging either the government’s seizure of corporate property or the legality of the search. Second, notes may provide the corporation with valuable information about the scope and direction of the government’s case and, potentially, the government’s sources of information. Third, note-taking is especially important in the scenario described above in which the corporation does not have a copy of the search warrant prior to its execution.

There is a fundamental difference, however, between taking notes, as observers of the search, and unnecessarily stalking the agents, eavesdropping on conversations between or among agents, or engaging in conduct that may be reasonably viewed as interfering with the search. Bearing this in mind, as observers of the search, each note-taker should pay attention to where the agents commenced the search, how the search progressed, what locations of the facility were the subject of the search, and whether the agents appeared particularly interested in a specific item of property.

Whenever possible, each note-taker should also take note of any of the agents’ questions with respect to the location of a specific item of property. In addition, since the attorney-client privilege attaches to “information gathered by corporate employees for transmission to corporate counsel for the rendering of legal advice,” each note-taker should address his note — containing his observations during the search — to counsel in order to put those communications under the cloak of the attorney-client privilege.10 Finally, the corporation should assign additional employees at the facility to conduct an internal accounting of what the agents seized from the corporation. An internal accounting is a significant step that will preserve the corporation’s ability to later challenge any discrepancies between its internal accounting and the inventory return produced by the government.

Avoid Common Missteps

There are several common missteps the corporation should avoid during the search. As set forth below, employees of the corporation should not engage in obstructive conduct nor should they supply the government with any additional legal authority to search the facility by either signing a consent to search form or verbally consenting to a search of the facility. Moreover, employees on site should take reasonable measures to identify and safeguard privileged documents, including potentially privileged documents, and documents containing confidential or proprietary information.

Avoid obstructive conduct. Employees should understand that they should refrain from impeding or obstructing the search and should not tamper with, alter, or destroy any documents, equipment, or ESI. Any of those acts may be considered obstruction of justice pursuant to 18 U.S.C. § 1519 or another federal obstruction of justice statute.12

Do not consent to search the facility. Agents will frequently attempt to obtain written or verbal consent to search the business premises even if they have a search warrant. This is a significant event because voluntary and knowing consent provides the government with an additional, legal basis for executing the search in the event that the corporation challenges the search warrant based on a defect in the warrant or deficiencies in the probable cause affidavit.13 To this end, employees should be instructed that they should not sign a consent to search form or permit agents to obtain verbal consent to search the facility. Employees also should not consent to a search of an area of the facility that is outside the scope of the particular places to be searched included in the search warrant. A search warrant should be narrowly tailored for its specific purpose; it should not provide the government with free reign to conduct a fishing expedition that auspiciously unearths evidence of a criminal violation.14 Importantly, the corporation may also retract its consent when it mistakenly consents to a search of a segment of the facility that exceeds the scope of the search warrant.15 The sudden retraction may annoy the agents on the scene. Agents may even threaten a noncompliant employee with an obstruction charge or inform the employee that if he does not consent to the search of the area outside the search warrant, they will obtain a warrant that covers that area.16 Putting the agent’s sentiments aside, even if an item is not within the scope of the warrant, employees should not act in such a way that they are perceived as undercutting the agents or object to the search in any way that could be viewed as interference. Instead, they should relay any questions with respect to the scope of the search warrant to counsel (either in person or through a contact person on site) in order for counsel to adequately provide advice to the corporation with respect to the search. And, even in close cases, counsel might advise the corporation to retract consent to preserve the objection to the search and require the agents to obtain an additional warrant.

Protect any privileged documents located at the facility. A determination of whether privileged or potentially privileged documents are located at the facility should be made. Documents identified as privileged or potentially privileged should then be sealed, a privilege log should be created, and the sealed documents and the privilege log should then be delivered to a magistrate judge or special master to resolve any government objections to the corporation’s privilege determinations.17 In the rare circumstance in which the agents begin seizing documents the corporation has identified as privileged or potentially privileged documents, counsel should consider filing an emergency Rule 41(g) motion with the magistrate judge.18Rule 41(g) is concerned with those whose property or privacy interests are impaired by the seizure and plainly permits anyone aggrieved by the deprivation of property to seek its return. An unlawful search or seizure is not a precondition to a Rule 41(g) motion.19 It is important to note, however, that courts may be reluctant to intervene in this process for several reasons. First, on balance, the corporation’s interest in reviewing the potentially privileged materials may be substantially outweighed by the government’s interest in seizing the materials as long as the government properly employs a “taint team.”20 Second, a magistrate judge may not want to second-guess law enforcement judgments. Third, reviewing voluminous amounts of documents is overly burdensome to the magistrate judge. Fourth, some magistrate judges may admonish the parties for failing to resolve these issues, independently, as professionals. Furthermore, in response to the filing of the Rule 41 motion, there is always a risk that the magistrate judge may issue an order determining that the communications are not protected by the attorney-client privilege.

Send nonessential employees home. Essential employees who may be able to assist the agents in locating documents or items specified in the search warrant should remain on site at the facility, whereas employees who are not essential should be informed that they are free to go home for the remainder of the day. By notifying nonessential employees who are not in “custody” that they are free to go home, the corporation has not engaged in any inherently obstructive conduct.21 A cursory review of the applicable obstruction statute illustrates this point.22 In fact, the argument that counsel herself has somehow obstructed the agent’s investigation in this scenario rests on shaky grounds.23 One way to distinguish between essential and nonessential employees might be to determine what segment of the business is subject to the search and identify the employees who are working in that area.

Drawing this important distinction may also provide several additional benefits to the corporation. First, it may accelerate the search because employees with the requisite knowledge will be able to redirect the agents to the location of items described in the search warrant. Second, it might minimize the amount of materials seized and will, at the very least, reduce the disruptive effect of the search. After all, the corporation has interests beyond the search, including its reputation and maintaining goodwill with its employees and its contractual partners, and counsel must be mindful of those interests. Third, by reducing the number of employees onsite, employees are less likely to make spontaneous statements to the agents that may potentially harm the corporation. Moreover, they are less likely to consent to a search of any places or of any items or materials not specifically included in the search warrant, which may prolong the search or require additional litigation.

Employee Interviews

Counsel’s strategy with respect to employee interviews should be informed by five substantial considerations: counsel’s duty to the corporation, counsel’s duty of loyalty, concerns related to communicating with individual employees at the site, obstruction of justice concerns, and practical considerations.

Duty to the corporation. As counsel for the corporation, counsel has a duty to represent and protect the vital interests of the corporation, including its potential exposure to civil or criminal liability.24 During a search, because employees may be untrained, nervous, unprepared, or a combination thereof, employees are not likely to understand that they may decline agent interviews. This fundamental misunderstanding undeniably has the potential to expose the corporation to both civil and criminal liability because certain employee statements, including potentially incriminating statements, may be imputed to the corporation as nonhearsay statements of an opposing party.25 To make matters worse, even though an employee interview conducted during a search is an inherently coercive situation in which the employee, objectively, may not feel free to leave, courts have held that employees are not in “custody” during these interviews, and therefore, employees have no cognizable Fifth Amendment rights during these interviews.26 Further, even if employees were cloaked with the protections of the Fifth Amendment, the corporation only has standing to challenge the legality of the search and any statements, including employee statements, obtained during an unlawful search as fruits of the poisonous tree.27 Yet even that doctrine is far from absolute.28 A court may deny a motion to suppress the statements if the court finds that the taint from the unlawful search had dissipated at the time that the statements were obtained.29 Given this venerable jurisprudence, it is incumbent upon counsel for the corporation to fashion appropriate strategies to protect the corporation’s interests. As discussed in greater detail below, one way to protect the corporation’s interests and to avoid either obstructing an ongoing investigation or providing advice to employees is to propose reasonable guidelines governing how, when, and where such employee interviews might be conducted. After all, both the government and the corporation should be interested in taking reasonable steps to minimize the risk that employee statements are obtained by agents through coercion, cajoling, or intimidation during the execution of a search warrant. The employee should know that he may decline an interview and obtain counsel.30

Duty of loyalty. Because loyalty to a current client prohibits undertaking representation directly adverse to that client without that client’s informed consent,31counsel should not attempt to represent or imply that he represents an employee whose interests are adverse to the interests of the corporation. For example, there may be a reason to believe that an employee is a whistleblower or the employee is a potential government witness armed with incriminating information about the corporation’s business activities.32

Concerns related to communication with individual employees. Counsel’s communication with individual employees raises two principal concerns. A primary concern is that, by communicating with an employee or by responding to an inquisitive employee’s questions about agent interviews, counsel for the corporation might inadvertently form an attorney-client relationship33 with the employee and, in so doing, might place himself in the awkward and undesirable position of having to rebut a claim that counsel simultaneously represents the employee and the corporation. In fact, even if an attorneyclient relationship is never formed, counsel’s law firm may still be required to respond to an unsettling (and humiliating) motion to disqualify.34 Another significant, related concern is that by communicating with an individual employee about an agent interview, counsel may be required to repudiate allegations, regardless of their merit, that counsel has somehow obstructed the government’s investigation.35 Accordingly, to avoid these potential pitfalls, counsel for the corporation should avoid communicating with an employee in any way that may be reasonably construed either as providing legal advice to the employee concerning an agent interview or as improperly influencing an employee’s decision to agree to an interview.

Obstruction of justice concerns. Counsel should not attempt to terminate, impair, or impede the agents’ efforts to interview employees who voluntarily agree to an interview because such interference may be viewed as obstructive conduct. A critical difference exists, however, between informing an employee that he is not required to speak to the agents and instructing or encouraging a particular employee not to agree to an interview with the agents.36

Practical considerations. While employee interviews may be standard procedure during the execution of a search warrant, agents have no ancillary legal authority for conducting such interviews. Instead, the search warrant provides the agents with a legal basis to conduct a search and to seize the particular property named in the search warrant, not to conduct unrestricted employee interviews. Further, attorneys representing the employees may file motions to suppress any statements obtained during employee interviews. For these reasons, counsel for the corporation should communicate to the AUSA that the corporation will assist the agents in locating the items and property named in the search warrant but should also engage in a dialogue with the AUSA to address how, when, and where employee interviews might be conducted. Understanding that it is nearly impossible to predict how a particular AUSA will respond to counsel’s suggestions for conducting employee interviews, counsel should be prepared to present the AUSA with a variety of common-sense options for conducting employee interviews.

1. Reschedule employee interviews. Counsel might first propose that the AUSA reschedule employee interviews until the employees have an opportunity to evaluate whether they want separate legal counsel to represent them during the interviews. The interviews could be conducted at a location that is convenient to the government, and this option may also permit the AUSA to avoid the necessity of having to issue grand jury subpoenas for each employee.
2. Delay employee interviews until counsel arrives. Assuming the AUSA is unwilling to reschedule interviews, counsel should then propose that the agents delay employee interviews until counsel arrives at the facility or until local counsel arrives at the facility.
3. Propose reasonable guidelines for conducting employee interviews. If the AUSA refuses to reschedule or delay employee interviews and counsel cannot locate another qualified attorney within driving distance of the facility to assist with the search, counsel might then propose the following reasonable guidelines37 for conducting employee interviews: (1) permit a representative of the corporation to inform the employees prior to conducting each interview that they are not required to agree to an interview and that, if they agree to an interview, the corporation is willing to pay for an attorney to be present during the interview; (2) provide each employee with a written consent form in the employee’s native language prior to conducting each employee interview to confirm that the employee understands that the employee is free to decline the interview and may have an attorney present during the interview; (3) inform each employee verbally in the employee’s native language prior to conducting each interview that employees are free to decline the interview and to leave the facility and that, should she consent to the interview, she may have an attorney present during the interview; or (4) permit in-house counsel (where applicable) to sit in on the interview of each employee provided that the employee has no objection and provided that the employee understands that counsel represents the corporation, not the employee individually.

In sum, while there are no magic words that will convince an AUSA to agree to implement any of the above-mentioned guidelines for conducting employee interviews, counsel has a duty to protect the corporation’s interests and to recommend reasonable alternatives to conducting the type of involuntary and uninformed interviews that typically transpire during the execution of a search warrant.

AUSA vs. AIC. The possibility always exists that counsel will not be able to identify or contact the AUSA and may wind up negotiating with the AIC with respect to employee interviews. Under these circumstances, counsel should still propose that the AIC reschedule, delay, or implement reasonable guidelines for conducting interviews. Even if the AIC rejects all of counsel’s suggestions for conducting employee interviews, counsel should treat this exchange as an opportunity to set up the cross-examination of the agent during which the agent may be required to explain: (1) why the agents were unwilling or unable to agree to reschedule or delay the interviews; (2) why each interview was “noncustodial”; (3) when and how the agents communicated to the employees that they were “free to leave”; (4) why each interview was voluntary; and (5) why the agents were unwilling or unable to agree to any of counsel’s proposed guidelines for conducting employee interviews, including why the agents were unable or unwilling to communicate to the employees that they may be represented by counsel during the interview.

Final Steps

Prior to the conclusion of the search, the corporation should ensure that it obtains a copy of the receipt of the seized property and requests a copy of the inventory. In addition, when appropriate, the corporation should debrief employees after agents leave the facility.

Obtain a copy of the receipt of the seized property and request a copy of the inventory. The plain language of Rule 41 seems to require that an officer leave a copy of the receipt of the seized property with the corporation before the agents leave the premises.38 Thus, a copy of the receipt should be requested and reviewed to ensure that the list is accurate. If there are any discrepancies between the property listed in the receipt of the seized property and what the search warrant authorized the agents to seize, then these issues must be addressed immediately. In fact, in this scenario, an emergency Rule 41(g) motion before a magistrate judge may be necessary. In addition, a copy of the inventory should be requested prior to the conclusion of the search although the plain language of Rule 41 only requires the magistrate judge — not the officer executing the warrant — upon request to give a copy of the inventory to the person from whom the seized property was taken.39 When such requests are denied, such as when the officers have not completed a copy of the inventory, a request for the copy of the inventory should be made to the magistrate judge as soon as practicable to ensure that the copy is promptly delivered to the corporation.

Debrief employees. After the agents complete the search and leave the facility, employees should be debriefed. The debriefing should focus on determining what materials the agents seized and what segments of the facility were particularly important to the agents. When appropriate, employee interviews should also be conducted to determine what occurred during the search and what may have prompted the search.

Conclusion

As shown, responding to a search in real-time presents uniquely difficult challenges for counsel. A search is a disruptive, unnerving show of force with the potential to shut down a business or cripple its reputation within the community. Armed agents have immediate access to significant documents and essential employees, which the government does not otherwise enjoy when it issues a grand jury subpoena, and there is also no necessity requirement controlling the government’s authority to obtain a search warrant from a magistrate judge.40 Therefore, counsel for the corporation must react quickly, cautiously, and calmly to minimize the potentially devastating consequences of the search. If a corporation has advance notice that it may be subject to a search, such as receiving a grand jury subpoena or determining that it is particularly susceptible to a search because of the industry within which it operates, then employees should be appropriately trained to manage and respond to search warrants.