When the FBI Comes Knocking – A Guest Blog by Jon May, Esq.

GUEST BLOG by Jon May, Esq.

It is part of our nature to be cooperative. That has been the key to the success of our species for the past 12,000 years. It is part of our upbringing to obey authority figures. From the time we are young, we are told to comply with orders from our parents and later our teachers and employers. So it is not surprising that when the FBI comes to our homes or offices, we feel compelled to answer their questions. After all, we did nothing wrong, we have nothing to hide. But this very natural response to authority is precisely the wrong response when dealing with federal agents. Just ask Martha Stewart. She wasn’t prosecuted for insider trading. She was prosecuted for making false statements to prosecutors.

When we read the headlines, our first inclination is to believe that the person charged with a crime is guilty. But while this is not always the case,  our willingness to assume guilt insures that his or her personal and professional life will be ruined  even if he or she is eventually vindicated at trial or on appeal. This holds true of businesses as well as people. Consider what happened to Arthur Anderson. Long after Arthur Anderson imploded, its employees scattered to the winds, its investors devastated, the Supreme Court held that no crime was committed. Sorry, our mistake.

The potential for wrongful conviction is greatest in white collar cases. This is because the difference between guilt or innocence has little to do with the accused=s conduct and everything to do with the accused=s state of mind: what they knew, when they knew it, what they intended. Just ask Frank Quattrone; wrongfully accused.

When the FBI shows up, they are counting on shock and awe. They don=t call you ahead of time to make an appointment. They don=t give you the opportunity to speak to your lawyer. So when confronted by their questions, you have had no time to prepare. Your mind races. Your ability to recall and reason is clouded by fear. In these circumstances, people react in unexpected ways. Some will automatically deny facts that are demonstrably true. Others will confuse dates or events. Some will be overcome by feelings of guilt for actions they did not take or are not even criminal. When it is over, many  will not be able to recall anything that they said.

But you can be sure that whatever was said can be used against you. It can be the linchpin in the government=s prosecution for a substantive crime or your statements can be the basis for a prosecution for making a false statement to a government agent. It can be the dagger the government pulls out to impeach you when you testify at a civil, administrative, or criminal proceeding.

When ever there are major financial losses, the public cries out for blood. Hindsight bias causes prosecutors to believeBsincerely believeBthat what might have been predicted, was predicted, that what could have been known, was known, that what was not disclosed, should have been disclosed.  They also believe that those in a position to predict, know, and disclose are guilty of federal crimes for their failure to do so. Jurors, who have little knowledge of complex business or financial transactions are easily infected with this same point of view. And to be fair, many people in good faith can look at the same transaction and reach very different conclusions. If you doubt this, you have never been married. This is why the only rational response to a visit by government agents is to tell them that they will have to speak to your lawyer. Don=t even let them into your office or your home. Not because you have anything to hide. But because you are in no shape to answer questions accurately and intelligently.

Keep this in mind. If speaking to the agents is truly in your best interests you will always have another opportunity to do so. But it will be at a time and a place of your choosing and under circumstances where your rights are protected and your decision informed and intelligent. Regardless of what the agents tell you, looking after yourself, your family, and your business is the right thing to do.

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