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2. Criminal Law Practice Tips for Civil Lawyers: What to do When the Feds are at the Door Presented by John W. Lundquist Richard H. Kyle, Jr. Dulce J. Foster

3. Execution Of A Search Warrant– Get Out Of The Way!! –

4. Execution Of A Search Warrant– Get Out Of The Way!! – • When the Client Calls… • Travel to the site of the search if possible. • Contact the agent in charge or lead prosecutor. • Obtain a copy of the search warrant. • Make clear that you are representing the company. • Inform agents (and prosecutor) that they are not to speak to anyone during the search. • Make arrangements to receive copies of seized business records.

5. Responding to Subpoenas U.S. District Court Subpoena in a Criminal Case ~~~~~~~~~~~~~ ~~~~~~~~~~~~~ ~~~~~~~~~~~~~ ~~~~~~~~~~~~~ ~~~~~~~~~~~~~

6. Responding to Subpoenas U.S. District Court Subpoena in a Criminal Case ~~~~~~~~~~~~~ ~~~~~~~~~~~~~ ~~~~~~~~~~~~~ ~~~~~~~~~~~~~ ~~~~~~~~~~~~~ • Documents are not protected by the Fifth Amendment, but other limits may apply: • Attorney-client and other privileges may apply • Protected patient information should not be disclosed without a court order or patient consent • Limits on unreasonable or overly burdensome requests may be negotiated with government counsel • If negotiations fail, bring a motion to quash or modify the subpoena (F.R. Crim. P. 17(c)(2))

7. Responding to Subpoenas U.S. District Court Subpoena in a Criminal Case ~~~~~~~~~~~~~ ~~~~~~~~~~~~~ ~~~~~~~~~~~~~ ~~~~~~~~~~~~~ ~~~~~~~~~~~~~ • Documents are not protected by the Fifth Amendment, but the act of producing documents may be protected: • Fifth Amendment privilege against producing incriminating evidence • Individuals may seek “act of production” immunity as a condition to responding to subpoenas • But…seeking act of production immunity may prompt the government to get a search warrant • Corporations cannot claim the Fifth Amendment

8. Don’t Destroy Documents Or Hide Evidence

9. Don’t Destroy Documents Or Hide Evidence • Client’s must never destroy evidence once they are aware that an official proceeding or investigation is underway. • Cease routine destruction. • Destruction of documents can be a crime. • Federal Statute • Tampering with a Witness (18 U.S.C. 1512)

10. Don’t Destroy Documents Or Hide Evidence • Exh. A: United States v. Arthur Andersen LLP • The E-mail • “It might be useful to consider reminding the [accountants on the Enron account] of our document retention policy.” • The Criminal Statute • “Whoever knowingly . . . corruptly persuades another person, with intent to . . . alter, destroy, mutilate, or conceal an object with intent to impair the object’s integrity or availability for use in an official proceeding.”- 18 U.S.C. 1512(b)(2)(B)

11. Don’t Destroy Documents Or Hide Evidence • Lessons learned from the Anderson case: • Companies/individuals no longer criminally liable absent proof of nexus between directive to destroy documents and an intent to affect a government proceeding or investigation. • Routine enforcement of comprehensive document retention policies is critical.

12. Employee Interviews- Don’t Talk To Strangers -

13. Don’t Talk To Strangers • The Government Investigator Has The Right To Contact An Individual And Request An Interview. • The government investigator does not have the right to insist upon an interview. • And it’s improper for him or her to pressure anyone in an attempt to obtain an interview.

14. Don’t Talk To Strangers • Individuals Have The Right To Talk Or Not Talk With Investigators. • In all situations individuals have the right to consult with legal counsel before deciding whether or not to talk to the investigator. • If a person decides that they are willing to be interviewed, they have the right to insist upon any precondition they desire.

15. Don’t Talk To Strangers • Individuals Have The Right To Talk Or Not Talk With Investigators. • For example, they can require that the interview be conducted only in the presence of legal counsel. • Regardless of the individual’s decision, the individual has every legal right to tell his or her employer about the government contact.

16. Always Tell The Truth

17. Always Tell The Truth • If an individual is going to talk, he/she must tell the truth when talking to government agents. • Failure to do so may, in and of itself, be a violation of the law. • Federal Statutes • False Statements (18 U.S.C. 1001) • Obstruction of Justice (18 U.S.C. 1505) • Perjury (18 U.S.C. 1621) • Minnesota Statutes • Perjury (Minn. Stat. Sec. 609.48)

18. Always Tell The Truth • Exh. A: United States v. Martha Stewart.

19. Advising The Client To “Take The Fifth”

20. Advising The Client To“Take The Fifth” • “Fifth Amendment” Primer • U.S. Constitution, Amendment V • “No person … shall be compelled in any criminal case to be a witness against himself.” • Witnesses may invoke their Fifth Amendment right in civil as well as criminal proceedings. • Depositions • Interrogatories • Document Requests • Test: testimony sought would tend toincriminate witness. • Not a bar to the production of documents.

21. Advising The Client To“Take The Fifth” • When a Client Should “Take the Fifth.” • Client is a formal “subject” or “target” in parallel criminal proceeding. • Be Careful What You Ask For • Adverse inferences. • Stay of Civil/Administrative Proceedings.

22. Resist Government’s “End Run” Around You

23. Resist Government’s “End Run” Around You • The Applicable Rules • Rule 4.2 of the Minnesota Rules of Professional Conduct • “In representing a client, a lawyer shall not communicate about the subject of the representationwith a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized to do so by law or a court order.”

24. Resist Government “End Run” Around You • The Applicable Rules • Local Federal Rule 83.6(d) • “The Minnesota Rules of Professional Conduct adopted by the Supreme Court of Minnesota as amended from time to time by that Court are adopted by this Court except as otherwise provided by specific rules of this Court.”

25. Resist Government “End Run” Around You • Whose Right Is It Under Rule 4.2? • The focus of Rule 4.2 relates to the obligation of attorneys to respect the relationship of the adverse party and the party’s attorney. • The right created by this rule belongs to counsel and not the client. • Waiver of this right is only valid if made by counsel.

26. Resist Government “End Run” Around You • Who Must Abide by Rule 4.2? • Attorneys licensed in Minnesota (or who must abide by those rules under the U.S. District Court Local Rules). • A lawyer is also responsible for the conduct of associated non-lawyers if (1) the lawyer orders the conduct, or (2) ratifies the conduct.

27. Resist Government “End Run” Around You • Who Is the Client? • The Company • Management • Employees • Former Employees? • Blanket assertions regarding representations.

28. Resist Government’s “End Run” Around You • The Appropriate Remedy • Suppression of evidence.

29. Conducting An Internal Investigation

30. Conducting An Internal Investigation • When to conduct an independent investigation. • Corporation discovers a possible violation of law by one of its employees/agents. • Corporation seeks to avoid criminal prosecution in post-Enron environment.

31. Conducting An Internal Investigation • Procedures for conducting internal investigation. • Establish formal process under supervision of an attorney. • Attorney not a target/witness • Attorney did not give advice about subject • Preserve privileged information. • Employ independent agents. • Assure confidentiality. • Make disclosure to employees. • Corporate “Miranda” warning. • Continuing supervision by counsel.

32. Don’t Become A Witness In Your Own Case

33. Don’t Become A Witness In Your Own Case • Rule 3.7(a) Lawyer as Witness • A lawyer shall not act as an advocate at a trial in which the lawyer is likely to be a necessary witness except where: (1) the testimony relates to an uncontested issue; (2) the testimony relates to the nature and value of legal services rendered in the case; or (3) disqualification of the lawyer would work substantial hardship on the client.

34. Don’t Become A Witness In Your Own Case • Rule 3.7(a) Lawyer as Witness • Depositions, while available under the Rules of Criminal Procedure (21.01 et seq.), are rarely employed as a discovery tool in criminal cases • Hire an investigator to conduct any witness interviews. • Unless you want to be a witness in your own case.

35. Thompson and McNulty Memorandums – Rethinking Corporate Liability • The Thompson Memorandum • In the wake of Enron, the Department of Justice issued the Thompson Memorandum, which made clear that corporations deemed not cooperating with criminal investigators were more likely to face criminal indictment. • In assessing cooperation, prosecutors consider (1) whether the corporation was advancing legal fees or otherwise indemnifying its employees and (2) whether the corporation waived the attorney-client privilege and attorney work product doctrine for materials related to any internal investigations.

36. Thompson and McNulty Memorandums – Rethinking Corporate Liability • The McNulty Memorandum • In response to wide criticism by the Courts, Congress, the defense bar and business community, the DOJ issued the co-called “McNulty Memorandum,” which modifies the Thompson Memorandum in several key areas. • Federal prosecutors can no longer consider a business organization’s indemnification or advancement of attorneys fees to individual employees when evaluating a corporation’s cooperation.

37. Thompson and McNulty Memorandums – Rethinking Corporate Liability • A limited exception is where “the totality of the circumstances show that [indemnification or the advancement of attorneys’ fees is] intended to impede a criminal investigation.” In such cases, the fee arrangement will be considered as a factor in determining whether the corporation is acting improperly.

38. Thompson and McNulty Memorandums – Rethinking Corporate Liability • The practice of requesting and evaluating corporate waivers of attorney-client privilege and attorney work product will continue where there is a “legitimate need” for privilege information. - A legitimate need is determined by (1) the likelihood and degree to which the privilege information will benefit the government’s investigation; (2) whether the information can be obtained in a timely and complete fashion by using alternative means that do not require waiver; (3) the completeness of a voluntary disclosure already provided; and (4) the collateral consequences to a corporation resulting from a waiver.

39. Settlement Statements to Federal Regulators No Longer Privileged • Old Federal Rule of Evidence 408 • Traditionally settlement statements to federal regulators, such as the SEC, were privileged and, therefore, protected from disclosure to federal law enforcement for use in criminal proceedings.

40. Settlement Statements to Federal Regulators No Longer Privileged • Amended Rule 408 (effective December 1, 2006) • Rule 408 no longer prohibits the introduction in a criminal case of “statements” or “conduct” during compromise negotiations regarding a civil dispute by a government regulatory, investigative, or enforcement agency. • By contrast, “officers of settlement” are still protected from admission in criminal proceedings. • Thus, any admissions of liability made by a client or a client’s lawyer during settlement negotiations with federal regulators can be disclosed for use in criminal proceedings.

41. Settlement Statements to Federal Regulators No Longer Privileged • Minnesota Rule of Evidence 408 • No change – yet

42. Seeking Indemnification

43. Seeking Indemnification • Always investigate potential insurance coverage • Existing D & O policies may cover the costs of defense for corporations and/or their employees • Claims must be asserted within policy time limits • Notice of investigation (subpoenas, target letters, etc.) may trigger obligation to tender claims

44. Seeking Indemnification • Indemnification from Employers • Indemnification mandatory under certain conditions. Minn. Stat. § 302A.521. • No other coverage • Conduct taken in employee’s “official capacity” • Employee acted in good faith • No improper personal benefit to employee • No reasonable cause to believe conduct was unlawful • Conviction not an automatic bar to indemnity • Includes judgments, fines and defense costs

45. Talking To The Press

46. Talking To The Press • Clients with criminal exposure should rarely, if ever, talk to the press. • What a client tells the press will likely be admissible later at trial. • If you represent a corporation, review press releases with company’s public relations people. • Consider hiring outside public relations firm.

47. Consult With A Criminal Defense Lawyer

48. Consult With A Criminal Defense Lawyer • If a civil case has criminal overtones, talk to a criminal defense lawyer. • No different than consulting with other specialists or experts. • Criminal defense lawyers are lots of fun. • We tell great stories.

49. When the Feds are at the Door… • Execution Of A Search Warrant – Get Out Of The Way!! • Responding to Subpoenas • Don’t Destroy Documents Or Hide Evidence • Employee Interview - Don’t Talk To Strangers • Always Tell The Truth • Advising the Client to “Take the Fifth” • Resist Government “End Run” Around You • Conducting An Internal Investigation • Don’t Become A Witness In Your Own Case • Thompson and McNulty Memorandums • Seeking Indemnification • Settlement Statements to Federal Regulators No Longer Protected • Talking To The Press • Consult With A Criminal Defense Lawyer

50. John W. Lundquist - (612) 492-7181 Richard H. Kyle, Jr. - (612) 492-7333 Dulce J. Foster - (612) 492-7110 4044651_1