What to do after alleged or confirmed illegal activities occur within your organization, with Gunster Attorney Jonathan Osborne

What to do after illegal activities occur within your organization with Jonathan Osborne and Jason Mudd episode graphic In this episode, Gunster attorney Jonathan Osborne shares his expertise on what to do after alleged or confirmed illegal activities occur. He talks about the steps you should take and the case information you're allowed to know. He also discusses what you can do to prevent something like this from happening.

Tune into this episode to learn about what to do when this occurs within your organization.

Watch the episode here

5 things you’ll learn during the full episode:

The first step you need to take when you are aware of an investigation
The difference between a subpoena and a search warrant and what you're allowed to know
The rights whistleblowers have with your company after communicating an issue with the government
What companies can do to establish communication with employees so they bring up the issue internally before taking it to the authorities
What public relations professionals can do with client privilege during an ongoing investigation

Resources

Listen to more episodes of the On Top of PR Podcast.
Find out more about Axia Public Relations
You can contact Jonathan Osborne with any questions.
Connect and learn more about Jonathan Osborne on LinkedIn. Visit Gunster Law Firm's website for more information on their practice.
Additional Resources from Axia Public Relations

Managing Public Relations in a Crisis e-book

Crisis Management Webinar

Episode Highlights

[00:15] Get to Know Jonathan Osborne

Business shareholder and co-chair of White CollarDefense and Investigations with Gunster law firm

[02:53] What to Do When Illegal Activities Take Place

The first call the head of that agency should make is to their attorney.
Get a copy of the search warrant.
Talk with an attorney before talking to police during a knock-and-talk or a subpoena.

[05:53] What Can You Know During an Investigation?

There’s no legal obligation for the government to give you an explanation.
You still have all your rights. Especially, the right to remain silent.
You can see the search warrant or get a copy of it.

[10:21] Legal Terms to Know

A search warrant is an authorization to physically enter a premises or a device and to seize and to search its contents.
A subpoena is a compelled discussion with the government about some issue. It can come from a grand jury, and in some instances, like in front of the state government, can come directly from a prosecutor. A grand jury is a collection of citizens from a community that receive a summons like you do for jury duty, but instead to serve as grand jurors for a particular jurisdiction.

[14:15] Whistleblowers

The most common way an investigation begins is by a whistleblower or tipster.
A whistleblower can be a person within an organization or a person who used to work in an organization who suspects or has proof there is some kind of misconduct going on within a business.

[15:54] How Else Do These Investigations Start?

Self-reporting is one way an internal investigation can start. It’s when a company becomes aware of a problem they have, which could be a compliance problem, that the government is not aware of and reports it.
A company can also become aware of a problem if they start receiving really negative press surrounding the issue.
Jason: “I will jokingly say we help companies get in the news; we charge twice as much to keep them out of the news.”

[17:52] Rights of a Whistleblower

Whistleblowers are protected by statutes so their employer can’t retaliate against them.
The company doesn’t have the right to find out who the whistleblower is.

[20:00] Channel of Feedback

Jonathan Osborne: “That's a key question. And it's one that we help companies answer on the front end, but frankly, more often on the back end. To circle back to your joke about charging more to keep people out of the news.”

[22:23] Client Privilege

Clients have attorney client privilege.
Clients also have work product privilege, which protects communications that are made in anticipation of litigation.

About Jonathan Osborne

Jonathan Osborne is a business litigation shareholder and co-chair of Gunster Law Firm's White Collar Criminal Defense & Internal Investigations practice group. He is well versed in law. Osborne is an experienced first chair trial attorney and even served in the U.S. Department of Justice as an Assistant United States Attorney in the Southern District of Florida.

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Transcript

Hello and welcome to "On Top of PR." I'm your host, Jason Mudd, with Axia Public Relations. Today, I'm joined by guest Jonathan Osborne. Jonathan is a business shareholder and co-chair of White Collar Defense and Investigations with Gunster Law Firm. Jonathan, welcome to the show. We're glad to have you.

Jason, thank you so much. I'm really thrilled to be here.

Yeah, I'm glad to be here too and glad you're here and that we're connecting now on what I hope is a hot topic. And this came actually from a listener, or audience member's, request. So they're asking, you know, “Hey, I'm in the practice of PR on behalf of a corporation. What do we do when and if we have something happen that involves illegal activities that are alleged or occurring within our organization?” And just to kind of back that up a little bit, we've been doing PR, I've owned this PR agency, Axia, for 20 years. And in that time, we've worked with companies that have thousands of employees. And when you have thousands of employees, there's going to be a couple of bad apples in the organization at various levels, right? High level, low level, medium level, whatever it might be. And so, we've literally had to help companies when there's an FBI raid at their office, not because of something the company did but because of an employee that works there, or an employee who used to work there, and they're there to seize basically what they think might be evidence that's either available at the company or maybe even hidden from the company in some way. And so, that's always a scary moment. So let's start with something fun like that, Jonathan, and say, you know, let's say somebody's in charge of corporate communications; therefore, they own crisis communications; therefore, when there's a knock at the front door, whether that knock is with a ram or that knock is with a regular knock, and there's a bunch of, let's just say, FBI jackets showing up in vans and they're saying, "Everyone, stop what you're doing, and we're seizing your computers." Kind of like a scene out of the TV show "Billions" or something like that, if you're familiar with that show. What happens next, Jonathan, in your mind, from a legal standpoint?

Sure, thank you, Jason. And it's funny, I have seen "Billions," but I've actually had this experience in real life. I've been on both sides of that knock. So when I was previously a federal prosecutor, I would've been the person authorizing the execution of a search warrant or what we call a “knock and talk” in federal law enforcement. And then in my private practice I've been on the side where the client is the recipient of that knock. So far, not a battering ram, but a knock from the FBI or some other investigative agency. And they call in that moment, terrified of what may … the investigation (be for) or why the agents are there, but really looking for guidance as to what's to do next. And so-

This is going to be a great episode, I can tell already.

So as you have already hit on, the first call that the head of that agency should make is to their attorney. And so, the first call is usually to the attorney that you've worked with in the past. It can be an in-house lawyer, it can be a lawyer who's an outside lawyer who doesn't even have that expertise, but you need someone on the phone who can either answer their questions for you or get you to the right person to answer the questions for you. And so, that's kind of where the movie scene that is a search warrant begins.

So, Jonathan, that's great background. The first call you make is to your trusted legal adviser, whether that's in-house counsel or outside counsel. Even if they're not a criminal attorney or have any experience with these matters, they know through a referral network or just their training and otherwise, their network, to be able to quickly get somebody available. So let's say they contact someone like you, Jonathan. What happens next?

So in the incident of a search warrant, the first thing that you're going to have to do is get a copy of the warrant and try to get an understanding of why law enforcement is at the business. What happens a lot more often than a search warrant context is actually an informal knock and talk or the receipt of a subpoena. And both of those, whether it's a knock and talk or a subpoena, allow more of a conversation with law enforcement or with the prosecutors who have authorized law enforcement to come and knock on that door or to deliver that subpoena, asking for records or asking for information. And so, ultimately, whether it's a search warrant, which is really not a voluntary process, or if it's a knock and talk, which is the agent knocking on the door asking to have a conversation, or in the third example, which is a subpoena, the first step for the attorney is going to be to figure out who in the government we can speak to to get more information, to get an understanding of why the government is at the door, and what records they're looking for, and what if anything we can do to assist. Because at first, until you are aware of the basis for the investigation, it really usually doesn't help to take an aggressively hostile stance when it comes to those agents or to the prosecutor that authorized the search.

So, true story, in September I got a phone call from what I'll call a not-yet client of our PR agency who had been talking to us off and on for several months. And suddenly, they're like, "Hey, we've got FBI agents here. It looks really bad. Our office is in a high-traffic part of town and they're not telling us anything." What could they have done in that case as far as from a legal standpoint? And, you know, I gave them, obviously, advice of what to do from a PR standpoint, and continue to do that, but where I don't know how to give them any advice and nor would I necessarily give them advice. But from a legal standpoint, are their hands tied in that moment as far as being able to insist upon at least some insight and information as to what is going on versus them just shutting down operations and not answering any questions?

So unfortunately, at the time that a search warrant is executed, the agents don't have an obligation to share information with the business or with the individuals who are being searched. They have to provide a copy of the warrant, which usually is just a legal form that says it's been signed by a judge and it authorizes the search, and it will list out what they're allowed to search. And so that could include a physical space, it could include cellphones and laptops. And really, at that point, there is no legal obligation of the government to explain the nature of why they're there or to give really any explanation to the business or to the individuals who are being searched. However, it is important in that moment for everyone that's in that premises to know that they still have their constitutional rights, which include the right to remain silent. They don't have to speak with the agents without an attorney present. And so, really, that first call is to counsel. And from there, it's advisable that you not have any further discussions with the agents. If they ask for information, you don't volunteer information until you have consulted with an attorney and have your representation at the table with you.

And so, how long could this business interruption reasonably last and how long could it reasonably be that you're not provided any information or background into what exactly is the intention of the search warrant, besides maybe looking at the search warrant and obviously making sure they're not violating the scope — and is that the proper term — the scope of search warrant?

Yes, it is. And so, the search warrant, what it tells you even if they don't explain, is that a judge who is independent and neutral has found that there is probable cause that that premises, or the cellphones or the laptops, are involved in an ongoing offense or a past offense. And so, the first thing that, you know, even if the government isn't willing to provide any information, is that there's a serious problem at your business. So the question is how much time can it take? Ultimately, if the government does not pursue criminal charges against a business, you may never know all of the grounds that the search warrant was executed. Once a person is arrested, and that can be a high-level person in the company or a low-level person in the company, the search warrant would have to be made public in the context of the case as part of what's called the discovery process.

Okay, got it. And about how long could you expect that subpoena to be executed and there to be the business disruption?

So on the day of a search warrant, it would depend on the nature of the data that's being searched for or recovered. So in the case of a physical search warrant of a business or of a house, in my experience, it would take at least hours. So if they start early in the morning, usually the search would be done by late afternoon. In the case of electronic devices, and they can be seized under a warrant, it can be weeks before you have the right to go and retrieve your property after it's been forensically searched by law enforcement.

So I'm making a mental note, if that ever happens to one of my clients, I should advise them to go ahead and just start buying new replacement devices for at least an interim period or on a short-term lease or something.

For sure.

Yeah, OK, OK.

For sure.

Yeah, that's good to know. That's really good to know. And I'm sure there's no real remedy since it's an investigation, you know, in the event that either the search warrant or the search and the forensics efforts showed nothing, or there is a material financial impact to the business operations for the downtime.

That's right. I mean, there are some civil rights laws that could come into play in a rare case. But usually, in a corporate-related matter, where the government is searching a business, the reason why the neutral judge has to authorize a search warrant is because that really is the test of whether the government has sufficient evidence to disrupt the business. If that judge finds probable cause at the point of the search, it's very, very difficult to either challenge what's happening or to get any type of re-enumeration for what happened. Down the road, if someone's arrested and their physical liberties are at stake, then there's an opportunity to test the evidence of the search warrant in what's called a motion to suppress.

Gotcha. I'm thinking here that maybe there's, not only is the company issued a search warrant, but then maybe the executives are subpoenaed in some way as well. Would that happen simultaneously?

So it can, I'd like to, that's a good question. So a subpoena and a search warrant are different. A search warrant is an authorization to physically enter a premises or a device and to seize and to search its contents. And a subpoena, which can come for a grand jury, and in some instances, like in front of the state government, can come directly from a prosecutor, really is compelled discussion with the government about some issue. And so, to use the example of a grand jury subpoena, which are commonly used in federal practice, a grand jury subpoena could go to an individual person, and it can command that person to appear before the grand jury to give testimony. The grand jury can compel you to testify unless you plead your Fifth Amendment rights as they do in the movies occasionally. And so, that's really the difference. The subpoena process is to get testimony from a person or business, and they can also subpoena documents in certain circumstances. Whereas a search warrant is issued after a determination has already been made that it's likely or probable that a crime is being committed.

All right, so I've always wanted to know this and I should have just Googled it, but since I've got the expert in front of me, what exactly is a grand jury?

Sure, so a grand jury, the most basic way to put it, is a grand jury is a collection of citizens from a community that receive a summons like you do for jury duty, but to serve as grand jurors for a particular jurisdiction. And so, in the southern district of Florida where I practiced as a prosecutor, we would have grand juries meet every day of the week. And it's not like really like in the movie. So the grand jury meets in a courtroom-type room at the courthouse, and prosecutors and agents who want to present cases for consideration will make appointments. And over the course of a day, they will go in front of the grand jury, present charges, present indictments for a vote. And if the grand jury finds that there is probable cause, that is how an indictment is issued in the federal system.

And so, that's a jury of peers basically, just like you're being summoned for jury duty. Are you told that you're being summoned for grand jury duty or no?

Yes, because grand jury duty lasts for a long period of time. So, whereas a jury summons, where you sit as the fact finder in a jury, in a criminal trial, finds facts beyond a reasonable doubt. A grand jury only has to find facts by probable cause because they are just issuing the initial charge. So the basis for the arrest of the person comes from the grand jury.

Sounds good, OK. Well, Jonathan, with that, we're going to take a quick break and come back on the other side with this very interesting conversation, so I'm looking forward to it.

[Jonathan] Great.

[Announcer] You're listening to "On Top of PR" with your host, Jason Mudd. Jason is a trusted adviser to some of America's most admired and fastest growing brands. He is the managing partner at Axia Public Relations, a PR agency that guides news, social, and web strategies for national companies. And now, back to the show.

Hello and welcome back to "On Top of PR." I'm your host, Jason Mudd. A quick shoutout to ReviewMaxer and Burrelles for being our sponsors of "On Top of PR." And with that, let's get back to Jonathan and this really interesting conversation. I'm really enjoying this. You know, the younger version of Jason Mudd wanted to grow up and get into law enforcement. And the older version of Jason wonders why didn't I study, why didn't I go into finance, or, you know, being an attorney. And so, this is kind of fun for me to mix all of my worlds together into one with you today, Jonathan. So thank you for that.

Likewise.

So how do criminal and regulatory investigations involving organizations and companies, where do they get started?

Thank you, so they get started in a number of ways, but there are a few that are the most predominant. And so, in our practice here at the firm, the most common way that an investigation begins is by a whistleblower or by a tipster. And so, a whistleblower can be a person within an organization or a person who used to work in an organization who suspects or has proof that there is some kind of misconduct going on within a business. In that scenario, the whistleblower essentially calls the police. And so, in the federal context, the whistleblower could walk into the FBI office, here in South Florida it's in Miramar, or anywhere else in the country, and basically provide what they believe is evidence that a crime is going on. And that's a very common way, particularly in the health care context, that investigations begin. There are other ways. And so, when you're dealing more with crimes where the arrest rates are higher, and so, those are, generally speaking, non-white-collar crimes, most investigations begin with cooperating defendants. And so, this is again a movie-type concept. But picture Person A gets arrested. They go into the police station, or in the federal context, into the FBI office. And they sit down with the prosecutor and with the agents, and they're presented with evidence showing that they're caught. Person A is caught dead to rights. So what opportunity does Person A have to avoid a long jail sentence or to avoid prosecution? They offer up their friends. And so, cooperating defendants lead to a number of arrest and convictions in the federal system.

Right. And then there's two other contexts that I think are relevant here. One of them is self-reporting. And one of the things that I do, which is called an internal investigation — sometimes a company becomes aware of a problem that they have, which could be a compliance problem, that the government is not aware of. But because of the industry that they're in, it could be a regulated industry. I'll give you some examples, again, like health care or banking; sometimes you find a problem and it's in your best interest to tell the government that the problem is there rather than have them find it on their own. And then the last context is sometimes you become aware of an investigation or the subject of an investigation because of receiving really bad press. And so, in recent years, we've seen in the sports world, in entertainment worlds, where allegations, for example, moral or ethical allegations against the CEO of a company or the coach of a team leads to a long process of investigations by regulatory authorities or by the government, that begins really with investigative journalism.

Well, the role of investigative journalism is always valuable and important to society. You probably don't feel that if you're the subject of that investigative journalism. But I'm a big fan of journalism. Studied journalism at the acclaimed University of Missouri School of Journalism. And so, I'm a big fan of journalism. And then to your comment earlier, I jokingly tell people when they ask what I do for a living, I will jokingly say we help companies get in the news, we charge twice as much to keep them out of the news. And most people think that's funny, but anyway, yeah, that's something that kind of helps. You know, they say if you can explain to your great-grandmother or a child what you do for a living, then you really explained it well, and that's kind of my go-to. Although, certainly, just like the practice of law is much broader than the things we're talking about, obviously, the practice of PR is also very broad. So we talked earlier already about how companies become aware that they may be on the government's radar for investigation. Let me ask you a little bit about thelet's go back to the whistle blower. What are the rights and responsibilities of a whistleblower? And accordingly, what are the rights and responsibilities of a company or organization who the whistleblower might be blowing the whistle about?

So the rights of the whistleblower are defined by statute in the context where there's whistleblower protection. So without getting into all the details or minutia of those laws, in the health care context, in the securities context, and some other context in U.S. law and state law, there is protection where a whistleblower can come forward, they can provide the government with information without a fear that they will be retaliated against by their employer. And the types of retaliation that probably come to mind in most cases are things like being fired or being demoted, receiving threats from management or from other employees, and things of that nature. As it relates to the company that has had the whistle blown, frankly, sometimes the company never finds out that a whistleblower went to the government or who the whistleblower was even if they get wind of it. Really, it's once either a civil investigation is commenced or a criminal investigation is commenced by the government that the company becomes aware of what is going on, and they become aware of what the whistleblower has said is going on. But really, even then, the whistleblower really isn't made central to the government's investigation. So to try to put that in further context, if a whistleblower goes to the government and doesn't have anything legitimate, the company probably never finds out about it and the person probably never becomes the subject of retaliation.

Right.

If the information leads to an investigation, then the company's much bigger problem than the whistleblower is the Securities and Exchange Commission or the Department of Justice.

Sure, absolutely. Yeah, that's a good point. What can companies do to kind of be innovative in their approach of having open channel of feedback and input from their employees so that if somebody has an if issue or discovers an issue, that they can more proactively and in an, obviously, in an ethical way report it to the company and give the company an opportunity to make it right before they might solicit outside government agencies for assistance?

That's a key question. And it's one that we help companies answer on the front end, but frankly, more often on the back end. To circle back to your joke about charging more to keep people out of the news.

Right?

So really, having a really robust compliance program that includes training, either from your in-house attorney's team or a compliance team or external counsel and compliance professionals, is key. And so, if there's an understanding in your organization that unethical conduct will not be tolerated, and if there are clear chains of reporting up the management stream for anyone who feels like they did or saw something that was not really up to the business's standards and expectations, that really is the best way to avoid a small issue becoming a huge issue. And that really is the best advice that you can give proactively. And in terms of what to do reactively, and so, when I say reactively, what I mean is once the issues are already taken to the government and a company receives wind of it, first of all, the worst thing you can do is retaliate. But the best thing you can do is investigate and remediate the problem on a parallel track with the investigation that the government is doing, so that when the government's investigation is nearing, either its close or they're bringing up charges against the company or some of its employees, the company can go to the government, and this is something that we can also talk about, the company can go to the government and say, look, government, DOJ, you don't have to punish us; we've already fixed the problem. And that really becomes part of the negotiations to try to avoid being charged or fined significantly for conduct that sometimes the board or the CEO was not even aware.

That sounds like a conversation teenage Jason Mudd had with his parents, you know, "Hey, you don't have to punish me. I've already fixed it."

Right, right. Exactly, exactly.

I don't know how much that worked, but yeah, I guess it's something that we can keep in mind on the corporate communication side. So, yeah, this has been really fascinating. So I have a question, which would be, how, I've heard this can happen, I heard it can't happen, so I'd love your opinion and also maybe some of your direction on it. A lot of times we'll have companies come to us and say, you know, we're the middle of this legal thing, whatever it is, criminal or civil or whatever's going on, maybe they're a plaintiff, maybe they're a defendant. And they say, we want to retain your PR agency's services through our law firm, therefore, our communications is protected under client privilege. One, is that possible, two, does it have to be through a law firm or is that privilege extended to a PR firm in this particular case? Because I've heard people argue many different ways on this.

Sure, and so, what I'll say first is that it could depend on the state in which the law firm and in which the incident is occurring. But I can speak in general terms to how the privilege works. And so, here, it actually would implicate two privileges. The first is the attorney-client privilege, and the second is the work-product privilege, which is related, but it's different. And so, the attorney-client privilege protects communications that are designed to be confidential between the lawyer and the client. The lawyer can be extended through consultants, through employees, and through others who are retained to assist in the defense of the matter or the prosecution of the matter. And so, it's a very fact-specific inquiry, but to answer your question, hiring the PR firm through the lawyers who are handling an internal investigation or a litigation matter gives you a better chance to maintain your attorney-client privilege down the road if it's ever challenged. On the other hand, the work product, which would follow a similar course when it comes to trying to maintain it, but the work-product privilege protects communications that are made in anticipation of litigation. And so, that could be current litigation or future litigation. But the way that both of these protections are challenged is in court and after the fact. And so, as a best practice, you should have the lawyers retain the PR firm the same way they would retain the electronic discovery vendors, the same way they would retain the forensic experts and the accountants to assist in your defense against either the government or another private party. But even if you do your best to only discuss legal advice and to protect the confidential information, the decision will be made one day if it's challenged by a judge who, for a variety of reasons, may disagree with your best efforts, and then have the information or even portions of it released because the judge finds that it wasn't privileged or that it wasn't truly work product.

Gotcha, that makes a lot of sense. Thank you for clarifying that. 'Cause I'm not an attorney and I don't play one on TV nor try to give any kind of legal advice through this program or otherwise, so just a good little disclaimer there. Jonathan, my understanding is, as we're wrapping up here, that you've made an offer to make a free presentation or training for companies or boards that want to know how and when to conduct an internal investigation and what to do when you receive an investigative subpoena from the government.

Yes, and so I'd be happy to have those discussions with your team or individuals who want to learn more about how the process works. Unless we're retained, we cannot provide specific legal advice.

Sure. But I'd be happy to discuss with any listener how they can better protect their business or their own reputation when they are faced with a government investigation or even just a subpoena.

And, Jonathan, what would be the preferred way for these individuals to reach you?

My email address is jayosbourne@gunster.com. And on our website, which is gunster.com, there is my contact information in my biography.

Okay. And they would just contact you and raise their hand and say, "Man, you were outstanding on 'On Top of PR,' that Jason Mudd guy was OK. And we'd love to chat more with you about what you know and how we should be preparing and thinking through these things well before they happen,” right?

Yes, sir, that's all it would take.

That's right, perfect, perfect. And I'm gonna ask Darby to add to our show notes a link directly to your bio in the episode notes, as well as your contact information. We're also going to put some links to just some valuable crisis communications information, including an e-book webinar and some blog posts. We've written about it too, just to kind of help guide our clients with this topic. But, Jonathan, you've been a great guest. Thank you for sharing your smarts with our audience. And hopefully, people will think proactively to begin a relationship with you. And I have this question, I know you're based out of South Florida. Gunster is doing business in how many states?

So Gunster is a Florida law firm, and we have offices throughout the state. Depending on the matter, we're able to help people throughout the country, but it really depends on the circumstance.

Okay, so if they need help in a different state, I'm sure you have an ability to create a referral and help them out regardless.

Absolutely.

That would be great, OK. Well, Jonathan, thanks again for being "On Top of PR" and helping our corporate communications professionals know what to do when and if this ever happens. And I can just tell you from experience from clients and potential clients that you don't always know when this is going to happen. And it's not a matter of “if” but “when.” And that's the way you should approach any type of crisis communications planning. And Jonathan's been kind enough to share more with you today. I hope you take advantage of it and take heed to his warning and really educate yourself and prepare yourself. So with that, if you follow those directions, you will be "On Top of PR," which is our commitment to you. And hope you enjoyed this episode. If you enjoyed it, would you please take a moment and share it with a friend or colleague who you think would benefit from this episode. I know I will. And we appreciate you tuning in. Be well.

What to do after alleged or confirmed illegal activities occur within your organization, with Gunster Attorney Jonathan Osborne

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5 things you’ll learn during the full episode:

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