Federal Investigation

Whenever a client of The Caudill Law Office receives a federal grand jury subpoena, I advise them of their rights under federal law. Federal investigations are generally intimidating, lengthy and stressful ordeals. The grand jury’s “principal function is to determine whether or not there is probable cause to believe that one or more persons committed a certain federal offense,” says the U.S. Attorney’s Manual.

Prosecutors with the Justice Department and U.S. Attorney’s Offices will characterize a person in one of three categories: target, subject or witness. Distinguishing between these categories is extremely important in matters of legal advice. Moreover, the person’s status will help determine viable options to make a key decision for the client on how to proceed. Counsel’s understanding of the client’s status in a federal investigation is crucial to making the right decision.

The U.S. Attorney’s Manual defines these categories:

A “target” is a person as to whom the prosecutor or the grand jury has substantial evidence linking him or her to the commission of a crime and who, in the judgment of the prosecutor, is a putative defendant. An officer or employee of an organization which is a target is not automatically considered a target even if such officer’s or employee’s conduct contributed to the commission of the crime by the target organization. The same lack of automatic target status holds true for organizations which employ, or employed, an officer or employee who is a target.

While being characterized as a target provides ample warning of a person’s exposure to being indicted, the status of a subject puts the person in the middle category. A “subject” of an investigation is a person whose conduct is within the scope of the grand jury’s investigation.

A “witness” is normally a person from whom the agents need information and assistance but has no exposure in the investigation (i.e., records custodian). Generally, if a witness receives a grand jury subpoena, it may be possible to provide documents and/or an interview that will avoid the need for live testimony before the grand jury. The assistant U.S. attorney (AUSA) may even include a cover letter that tells the witness that production of the documents in advance of the grand jury date may alleviate the need to personally appear.

The federal grand jury may properly subpoena a subject or a target of the investigation and question the target about his/her involvement in the crime under investigation. However, it is extremely unusual for a prosecutor to subpoena a target to testify before the grand jury. If that happens and counsel informs the prosecutor in writing that the client will assert his/her Fifth Amendment privilege, the U.S. Attorney’s Manual suggests that the prosecutor withdraw the subpoena.

When a person is a “subject” in an investigation and called to testify before the grand jury, U.S. Attorney will advise the person of the following rights:

• The grand jury is conducting an investigation of possible violations of federal criminal laws.
• The subject may refuse to answer any question if a truthful answer to the question would tend to incriminate the person.
• Anything the subject says may be used against him by the grand jury or in a subsequent legal proceeding.
• If the subject has retained counsel, the grand jury will permit him/her a reasonable opportunity to step outside the grand jury room to consult with counsel if necessary. If the person is a target in the investigation and is going to provide testimony before the grand jury, then the prosecutor will supplement the preceding rights with the following target warning: “your conduct is being investigated for possible violation of federal criminal law” (or words to that effect).

The person needs to decide whether or not to cooperate in the investigation. Federal agents often attempt to conduct an interview with the person when they first contact them to serve a grand jury subpoena. If the person “lawyers up” at the outset, the agent will simply serve the subpoena. However, agents will typically show up without notice at the person’s home or business in an effort to get some statements or even a full-fledged interview before the person realizes that he/she should first discuss the matter with legal counsel.