Signs of Being Under Federal Investigation (DOJ or OIG)

Do you know the signs of being under federal investigation by the federal government?  When investigators contact you, or agents serve you with a civil investigative demand. (CID) or a federal subpoena request, or you receive a DOJ target letter, you must be very careful of how you proceed next.

When looking at obvious and not-so-obvious signs of being under federal investigation, and despite thinking that you have done nothing wrong, the reality is that agents will continue to investigate. If prosecutors believe they can remotely have a case against you, they will target you for an investigation and move forward with a possible indictment.

If you are a federal government contractor being investigated, indicted or charged with a crime, your chances of getting a positive result start with having attorneys who understand the issues involved with government contractor investigations.  

The DOJ’s website is filled with cases where small businesses and government contractors are under investigation, indicted, and convicted when they probably never even had a chance to begin with.

At Watson & Associates, LLC, our government contractor investigation lawyers represent construction or service contractors being investigated in civil or criminal cases. Compared to some of your local legal counsel, we understand federal contracting and can help you to avoid some of the most costly mistakes in federal investigations. See information about three defenses for criminal liability for government contractors.

This article is primarily focused on individuals or companies involved in federal government procurement or are performing federal contracts, and trying to find out what to do if you are under investigation. In some circumstances, subcontractors involved with federal government contracts can be involved in an investigation.

As a federal government contractor, you might find yourself subjected to a civil or federal criminal investigation for a variety of reasons. One of the popular reasons is alleged False Claims Act violations against the government. This can result from allegations of Buy American Act violations or allegations of procurement fraud under the various small business programs (HUBZone investigation, SBA 8(a) Program Fraud, SDVOSB fraud investigation and others).

When the contracting officer, whistleblower, or some other source initiates a complaint, the respective law enforcement agency will first initiate a  federal criminal investigation. At this early stage, federal investigators from the Department of Justice (DOJ) or Inspector General (OIG) will investigate the various allegations.

In government contracting, criminal investigations are usually well on their way before the defendant is aware. Federal investigators usually look at documents and talk to present and past employees. Afterward, they will initiate subpoenas for documents and testimony with you, the defendant.

When federal government contracts are involved, understanding how to cooperate with law enforcement agents while protecting your constitutional and statutory rights is critical and must be your first consideration when being investigated for fraud. See information about target letters vs indictment. 

Innvestigated or Charged With Procurement Fraud? Minimize Your Exposure - Get Your FREE Defense Checklist - Download Now

What is a Federal Investigation?

A federal investigation is the first step in the criminal justice process at the federal level. As a government contractor or individual associated with the federal government, understand that agents from the Department of Justice or IG office (OIG) may have received a complaint that your company may have violated federal procurement laws and, therefore, has committed a crime.  

The complaint can come from an internal source, another contractor, or the contracting officer himself. A federal investigation, therefore, is the process where investigators try to find evidence that you or your company has committed a crime. The reality is that by the time you find out that you are under investigation by the federal government, law enforcement agencies already have a case built against you. Having top government contractor investigative lawyers on your side is critical at the beginning. See important information about cooperating and proffer agreements.

Get Important Tips That Can Save You Hundreds of Thousands of Dollars. Learn the signs of being under investigation.

Whether you are a federal contractor, a government employee, or an individual associated with some level of federal involvement, you may be shocked to learn that you are under investigation by the federal government.

When the feds decide to target you for an investigation involving federal contracts, they are common signs to watch out for ( see below). The most common signs of being under investigation include talking to your friends, employees acting abnormally, and even an investigator leaving a business card on your door.

Oftentimes, if the DOJ or FBI brings you under its investigation ‘claws,’  they may not confirm that you are a target.  If you do not receive an OIG or DOJ target letter, you do have a right to ask them if you are actually a target. If at any time you have a hunch that you are under investigation but not charged for criminal procurement fraud, you want to seriously consider reaching out to a criminal defense attorney. 

Can you be under investigation without knowing? The answer is “yes.” The federal government has many tools to launch an investigation against you. Government contractors usually will know at some point that they are under investigation through a civil investigative demand. However, when issuing the demand, the government has more than likely been investigating for some time without the contractor knowing.

IMMEDIATELY REDUCE CHANCES OF JAIL TIME & HUGE FINES - DOWNLOAD YOUR FREE CID RESPONSE CHECKLIST HERE

How to Find Out if You’re Under Federal Investigation

Not So Obvious Signs of Being Under Investigation 

In addition to the above, people also ask – what are signs of being under investigation or how to find out if there is an open investigation on you? There are also not-so-obvious signs of being under federal investigation by the federal government. The following are common indicators or red flags that you may be under investigation but not charged.

• As a government contractor, the contracting officer or even the contracting officer representative (COR) starts asking your employees about operational facts in the company
• The contracting officer in writing has sent you actual letters about mistakes in your invoices.
• You were issued a cure notice or show cause notice about faulty equipment or improper materials.
• The government out of the blue asks for a site visit to your business
• A co-worker or friend starts asking you unusual questions about your job and how you do it (prosecutors Amy have a confidential informant that actually works for you.)
• You receive an audit that concludes that the government has overpaid you.

Tip: When a federal contracting officer has reason to believe that fraud has been committed, he or she is required to turn the matter over to federal law enforcement. Therefore, receiving unusual questions from the contracting officer could be signs of being under investigation.

Why is it Important to Know Ahead of Time If You Are Under Federal Investigation?  

As a federal government contractor, corporation or individual, you still have legal rights. For example, you have a right not to incriminate yourself. Although most people may have some understanding of the Constitution, the reality is that federal attorneys may be pursuing you for violation of  Small Business Administration (SBA) small business programs. You would then want to be extremely careful when answering questions that may seriously impact the underlying investigation.

If you know ahead of time that you are under investigation, you could look at having an internal corporate investigation and develop corrective actions. This could help mitigate any potential adverse outcomes. Unfortunately, the government does its homework before a federal government investigation is launched. Signs of being under federal investigation may be obvious and others may not be so obvious. Regardless of which type of sign, you should always remember that you do have constitutional rights to protect yourself.

What are Common Reasons Why Government Contractors are Under Federal Investigation? 

There are a variety of reasons why small business government contractors are under investigation. The most common reason is for violating the Federal False Claims Act or Buy American Act.  Second, companies are being pursued for violation of the VA’s Service Disabled Veteran Owned Small Business (SDVOSB Fraud).

Third, being under investigation for violating the SBA 8(a) BD Program, SBA affiliation rules, false representations, or certifications to the government. Committing HUBZone fraud is yet another common reason why small government contractors are under federal investigation. In either circumstance, business owners, or the company itself can be targeted for not complying with the limitations on subcontracting regulations or pass-through contracts to non-eligible companies. Find out more about small business SDVOSB.

These are all reasons why the federal investigative bodies pursue federal government contractors or their corporate executives for criminal activity. Although there is no set way how to know if a case is being built against you for government contract fraud, having someone that understands the underlying issues upfront can save hundreds of thousands of dollars or even put you in a better position to bargain or negotiate.

• The further the case gets ahead, the more difficult it might be to put yourself in a better-negotiating position.
• Having a legal representative who understands federal small business programs upfront can help you effectively push back against unwarranted criminal charges.

How to Avoid Costly Common and Costly Legal Mistakes 

As mentioned throughout the article, be sure that you have someone on your team that understands the federal procurement process. Without it, you will more than likely be paying for traditional criminal attorneys to get up to speed on federal procurement laws. Many successful companies hire outside legal counsel to advise on the underpinnings of government contracting investigations.

Understand the SBA programs are unique programs. When federal prosecutors bring criminal charges such as conspiracy to defraud the government under SBA small business programs, they also have to prove the underlying elements of their case. Most small businesses at best will have a criminal defense attorney on board. However, he or she may not have the requisite experience to combat the underlying charges discussed in the prosecutors’ complaint to the court.

How to tell if you are under investigation but not charged? Am I under federal investigation? What do you do next?

The obvious answer is to get hold of your attorney. However, knowing ahead of time that you are under federal investigation is a critical factor. Is someone at work now talking to you who doesn’t normally talk to you? Has your boss called you in the office and somehow asks you a number of unusual questions? These are all signs of potentially being investigated. Learn about the Consequences of Procurement Fraud Schemes & Avoiding Criminal Liability.

IF YOU'RE READY TO HIRE AN ATTORNEY BOOK A CALL HERE

Call Our Government Contract Investigation Attorneys If you See Signs of Being Under Investigation 

If you’ve found out that you are under a federal investigation involving a federal government contract, need an internal corporate investigation for SDVOSB fraud, HUBZone Fraud, or some other charge in government contracting, call our government contract defense and investigations lawyers to get a free initial consultation at 1-866-601-5518.