Knowing Your Rights While Under Federal Investigation
Martha Stewart likely did not envision serving jail time when federal investigators first requested to speak with her regarding potential insider trading. However, she was ultimately convicted under federal law for misleading investigators from the Securities and Exchange Commission (SEC) and the Federal Bureau of Investigation (FBI). This is why it is important to know your rights while under federal investigation.
Lying to the Government Is a Crime
Most business professionals do not expect the FBI or SEC to come walking through their door. However, it can be easy to get tangled up in a federal investigation, particularly given prosecutors’ growing focus on white-collar crimes. Should the unthinkable occur, it is essential to be prepared and understand your rights.
Understandably, most people panic when the FBI comes to their door.
Most importantly, what you say to federal investigators, as well as how and when you say it, can have a significant effect on the future of you and your company. Title 18, United States Code, Section 1001 makes it a crime to:
Knowingly and willfully;
Make any materially false, fictitious or fraudulent statement or
representation;
In any matter within the jurisdiction of the executive, legislative or judicial branch of the United States.
The false statements statute applies even if your lie is oral and not under oath. It also applies if the government is not actually influenced by your falsehood. During interviews, investigators often have more information than you realize and will act dumb to lull you into a false sense of security. Simply denying knowledge about illegal conduct has been determined to be a violation of the federal statute.
Protecting Your Legal Rights
Understandably, most people panic when the FBI comes to their door. Many believe that not talking to investigators makes them look guilty and more likely to blurt out little lies to cover up small misdeeds and protect themselves. Others will lie and say they know nothing about the alleged crimes.
Consider the following hypothetical:
You are the former employee of a corrupt company. You hated the place, left as soon as you could, and did your best while there not to join in the fraud you saw being committed all around you. Nevertheless, you looked the other way and, on occasion, minimally aided the owner’s criminal behavior. When investigators show up at your new place of employment and start asking questions, what is the best course of action?
Rather than panic and lie, the best way to handle the situation is to calmly and politely decline their request for an interview in order to obtain legal advice. First and foremost, you are not qualified to know for sure whether any of your past actions could constitute a criminal offense. Second, you may unwittingly make factual mistakes during your interview which could constitute a violation of Section 1001. Third, you have not spoken with an attorney to figure out the best way to protect your legal rights and interests.
While the federal investigators may continue to pressure you to talk, invoking your right to counsel cannot be used against you later. Politely declining the request to interview is not the same as remaining completely silent, which can later be used against you. You don’t have to (and shouldn’t) provide any explanation. Simply ask for the officials’ business cards and tell them your attorney will be in touch.
This article is number one in a two-part series.
Part two, “Can NJ Businesses Prepare for a Search Warrant?” can be found here: ()
Otherwise, if you have any questions regarding the matter, please contact me, Bob Levy.
Does Your Homeowners Insurance Provide Adequate Coverage?
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Understanding the Importance of a Non-Contingent Offer
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Novation Agreement Process: Step-by-Step Guide for Businesses
Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]
What Is a Trade Secret? Key Elements and Legal Protections Explained
What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]
What Is Title Insurance? Safeguarding Against Title Defects
If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
What To Know & Do While Under Federal Investigation
Author: Robert E. Levy
Knowing Your Rights While Under Federal Investigation
Martha Stewart likely did not envision serving jail time when federal investigators first requested to speak with her regarding potential insider trading. However, she was ultimately convicted under federal law for misleading investigators from the Securities and Exchange Commission (SEC) and the Federal Bureau of Investigation (FBI). This is why it is important to know your rights while under federal investigation.
Lying to the Government Is a Crime
Most business professionals do not expect the FBI or SEC to come walking through their door. However, it can be easy to get tangled up in a federal investigation, particularly given prosecutors’ growing focus on white-collar crimes. Should the unthinkable occur, it is essential to be prepared and understand your rights.
Understandably, most people panic when the FBI comes to their door.
Most importantly, what you say to federal investigators, as well as how and when you say it, can have a significant effect on the future of you and your company. Title 18, United States Code, Section 1001 makes it a crime to:
Knowingly and willfully;
Make any materially false, fictitious or fraudulent statement or
representation;
In any matter within the jurisdiction of the executive, legislative or judicial branch of the United States.
The false statements statute applies even if your lie is oral and not under oath. It also applies if the government is not actually influenced by your falsehood. During interviews, investigators often have more information than you realize and will act dumb to lull you into a false sense of security. Simply denying knowledge about illegal conduct has been determined to be a violation of the federal statute.
Protecting Your Legal Rights
Understandably, most people panic when the FBI comes to their door. Many believe that not talking to investigators makes them look guilty and more likely to blurt out little lies to cover up small misdeeds and protect themselves. Others will lie and say they know nothing about the alleged crimes.
Consider the following hypothetical:
You are the former employee of a corrupt company. You hated the place, left as soon as you could, and did your best while there not to join in the fraud you saw being committed all around you. Nevertheless, you looked the other way and, on occasion, minimally aided the owner’s criminal behavior. When investigators show up at your new place of employment and start asking questions, what is the best course of action?
Rather than panic and lie, the best way to handle the situation is to calmly and politely decline their request for an interview in order to obtain legal advice. First and foremost, you are not qualified to know for sure whether any of your past actions could constitute a criminal offense. Second, you may unwittingly make factual mistakes during your interview which could constitute a violation of Section 1001. Third, you have not spoken with an attorney to figure out the best way to protect your legal rights and interests.
While the federal investigators may continue to pressure you to talk, invoking your right to counsel cannot be used against you later. Politely declining the request to interview is not the same as remaining completely silent, which can later be used against you. You don’t have to (and shouldn’t) provide any explanation. Simply ask for the officials’ business cards and tell them your attorney will be in touch.
This article is number one in a two-part series.
Part two, “Can NJ Businesses Prepare for a Search Warrant?” can be found here: ()
Otherwise, if you have any questions regarding the matter, please contact me, Bob Levy.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
