Signs of Being Under Federal Investigation
Find out if you’re under government investigation as a federal contractor. When investigators contact you, or agents serve you with a 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 that they can remotely have a case against you, then 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 that 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.
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.
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 federal 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 decided 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 a 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.
How Long Does a Government Investigation Take?
There are various statutes of limitations for federal crimes. In the context of government contracting crimes, the primary goal would be to charge the contractor with crimes under the Federal False Claims Act, among others. As an example, a case must be filed within either six years of the FCA violation or three years from when the government knew or should have known of the violation. See Cochise Consultancy, Inc. v. U.S. ex rel. Hunt, a case that was decided by the Supreme Court, See also 31 USC 3731(b)(1),(2).
How to Find Out if You’re Under Federal Investigation
Not So Obvious Signs of Being Under Federal Investigation
In addition to the above, people also ask – what are signs I’m being investigated? 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.
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. 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 that understands federal small business programs upfront can help you effectively push back against unwarranted criminal charges.
Signs You Are Under Criminal Investigation for Government Contracting Fraud
Government contractors may not always be investigated for civil procurement fraud activities or civil false claims actions. They can be investigated for criminal activity in addition to civil charges. There are a few signs of being under federal investigation for procurement fraud or some other criminal activity involving federal contracts.
- If the local law enforcement/police call or visit your home. This is merely an indicator. However, absent notifying you that someone close was involved in a car accident, the question is always in the air as to whether you are under criminal investigation. If the police ask to go to the station to make a statement, this could be an indicator to retain legal counsel.
- Law enforcement tries to contact co-workers, friends, or relatives. If you find out that the police are asking questions to co-workers, employees, or family members, this can be a sign that you are under federal investigation. This section is focused on primarily government contractors or employees working for the government or a contractor.
- Strange vehicles parked in your neighborhood. Both federal and local law enforcement can survey your home or work area. If you see strange vehicles lurking around your work build, home, or project site, this can be another sign of being under criminal investigation for government contract fraud.
- Social media friend requests. In the world of iterant and social media, government investigators are very creative. If you receive a strange request or friend request on social media, this could yet another red flag that you are being investigated.
- The Contracting Officer or her representative (COR/ KOR) is asking unusual questions about your day-to-day operations and how you perform the contract.
- Your subcontractor tells you that a government representative has reached out to them.
- Your employee starts asking very pointed questions about invoicing, materials or some other aspect of the contract.
What to do when you are being investigated? Under federal investigation but not charged?
Investigation before criminal charges are brought: A federal criminal investigation is conducted before formal charges are brought against a contractor. Some corporations mistakenly believe that a notice of investigation means that criminal charges are already brought. This is usually not the case. Small businesses doing business with the federal government or even larger contractors should immediately reach out to a federal government investigations attorney that understands the FAR and regulations governing federal small business fraud programs.
Who is involved in a federal criminal investigation in government contracting? Federal law enforcement agents are the key players when the investigation gets underway. In federal criminal investigations involving procurement fraud, the contracting officer may be involved, SBA representatives, and even your current employees. For the most part, criminal investigators conduct the heavy lifting. At the end of the day, it is the federal prosecutor who oversees the investigations and helps the investigators to get subpoenas and search warrants.
- Usually, search warrants come later in the investigation process.
- Government contractors who are small businesses should seek help early in the investigation process.
- The federal prosecutor makes the final decision on whether to bring formal charges after the investigation is complete.
Multiple agencies participating: Federal criminal investigations against federal government contractors are serious issues where companies can be subject to jail time and or substantial fines. When the OIG or SBA OIG initiates a federal criminal investigation, you should be aware as a small business that procurement fraud investigations can include several agencies at the same time. You can have the Department of Justice ( DOJ), SBA OIG, DCAA, and other relevant agencies participating in the investigation at the same time. Having an experienced procurement fraud defense attorney on your team can minimize the confusion and create a sound defense early in the process.
Signs that a Criminal Case is Weak
When the DOJ or OIG dismisses the charges against government contractors after an investigation, there is probably not enough evidence to move forward. These are signs that a criminal case is weak. Other signs include offering plea bargains, and witnesses not cooperating.
Investigative Strategies Used by Federal Investigators
Federal criminal investigators use a variety of strategies when you are under federal investigation. These strategies help the prosecutor to prepare procurement fraud cases for indictment or filing formal charges. Understanding the various tools can benefit you because you can adjust your behavior accordingly. A few of the common strategies used when you are under investigation include:
Wiretapping: As a government contractor be aware that federal investigators use wiretapping as a common strategy when you are under federal investigation.
- Application for wiretapping is a process that is similar to a search warrant.
- Investigators must seek approval from a judge
Wiretapping during a federal criminal investigation allows law enforcement to listen to and record your conversations. Contractors should be aware of this and conduct themselves accordingly. Getting the proper guidance from your government contractor defense attorney can be critical in this area.
How long can investigators wiretap your phones when under investigation? Wiretapping when under federal investigation can accumulate for years at a time. Remember that the prosecutor has powerful tools to develop his or her case against you as a government contractor. Having conversations with employees, family members, subcontractors, and manufacturers can be a basis for bringing criminal charges against contractors for conspiracy to commit fraud, wire fraud, and all of the common charges that the prosecutor may bring.
Large or small businesses doing business with the federal government should also be aware that when it comes to Buy American Act criminal investigations and conspiracy claims against two or more contractors, wiretapping is a favorable tool for prosecutors in criminal cases.
GPS tracking usage when you are under investigation: If you are a government contractor or otherwise involved in federal procurement, you should not be surprised to know that investigators may use GPS tracking, cell-phone tracking, to observe your movements and gather the information that can bolster conspiracy charges.
What Actions to Take If You Are Under a Federal Civil or Criminal Investigation as a Government Contractor
How should you talk to an investigator? Government contractors may take months if not years to find out that they are under. Federal criminal investigation. If you are a federal contractor and have learned that you are under a federal criminal investigation ( or civil investigation), you should first seek help from government contractor criminal defense attorney that has experience in federal government contracting.
The first order of business is to protect your constitutional rights. You do not want to make incriminating statements or provide documents that can incriminate you. This is why having a government contract investigation lawyer is essential. You want to develop a strong legal defense early in the case since federal investigators seem to have unlimited resources – taxpayer dollars. Speaking to an investigator is the same as speaking to the prosecutor. You cannot claim that your rights have been violated because the government official was not the government attorney.
If your company is under federal investigation for alleged criminal activity or civil violations involving a government contract, get legal representation by a federal criminal defense lawyer and government contract attorney immediately.
What Steps Must You Follow to Protect Your Rights?
One of the critical things to do immediately after learning that you or your company is being investigated is to find a government investigations attorney that also understands federal government contracting and the substantive legal issues involved in your case. Having a lawyer that specializes in federal cases involving government procurement fraud issues will make the difference in having a strong defense versus a weak case.
- Never speak to anyone about the investigation including family members and coworkers.
- Bringing criminal charges against contractor – identify weaknesses in your daily operations and fix them
Understand that even though you may feel that you have done nothing wrong or may be told that you are not formally under investigation, any federal agents that investigate crimes are not on your side. In fact, he or she may be asking what seems to be innocent questions in hopes of bringing charges against you. However, without an attorney present, you could mistakenly and inadvertently incriminate yourself in a criminal matter, which could seriously damage your case.
- Remember that anything you say or do can be used against you in court.
- No matter what they tell you, federal agents investigating a crime are not on your side, nor do they want to help you.
As mentioned earlier, signs of being under investigation can also occur when a coworker or another contractor approaches you with unique or unusual questions. Beware! They may be working with or cooperating with federal investigative agencies as a confidential informant to lure you in.
Government Investigations and Federal Grand Jury Involvement
Once the federal criminal investigation for violations of procurement laws, the Buy American Act, or other false claims violations is near to or completed, the prosecutor may then present the criminal case to a federal grand jury for indictment. The grand jury looks at the evidence presented by the prosecutor to see if there is probable cause (bound over for trial).
- The grand jury decides whether the government attorneys have presented enough evidence to show that the defendant could be found guilty of federal crimes.
- A grand jury indictment does not give a prosecutor a leg up at trial. He or she must still prove their case from the beginning.
If you are being investigated for fraud in government contracting, how can an attorney help you as a government contractor during the early stages of an investigation?
Having a government contractor defense attorney that is under investigation for federal criminal crimes involving federal procurement, can allow that person to approach federal authorities on your behalf and present either proof or mitigating evidence to attempt to resolve or mitigate the impact.
- Your defense attorney can work with the US attorney in a way to help dispose of the case or reduce charges before a case is filed.
- Waiting until charges are filed is too late and makes the defense lawyer’s job much more difficult
- Get legal counsel that understands government contracting involved early
What Should You be Aware of When Speaking to Federal Investigators?
If you are being investigated for fraud this point cannot be overemphasized for federal contractors. When you speak to federal investigators upfront, you are either a target or not for prosecution. In either situation, you have to be cognizant of the fact that information provided to the investigator can seriously impact any future efforts to bring criminal charges against you. You should always consider consulting with legal counsel before interviews. You should always cooperate with federal investigative authorities. However, you also have statutory and or constitutional rights that you must protect.
Be aware that any false statements made to federal investigators can have a domino effect on future charges. Statements made in good faith because you think that you have nothing to hide can change the government’s posture pretty quickly. Learn various tips about understanding the Federal Acquisition Regulation (FAR) If the investigator somehow finds the statement is false, then your bargaining position is reduced simply because the false statement by itself can cause a new criminal case against you.
What are Common Problems With SBA Small Business Program Fraud Cases and Government Investigation to Watch Out For?
Since small businesses are common targets for federal investigators. Yet, many executives and companies still find themselves in hot water. This makes it very difficult to secure a strong point of negotiation later in a criminal or civil case. For example, not all small businesses understand the rules governing pass-through contracting or limitations on subcontracting. There may be a teaming agreement or joint venture involved.
The SBA, VA, or some other entity has reason to believe that your company has pass-through contracts illegally to subcontractors. This puts you in a very precarious position. You must have a professional up from that can push back against federal prosecutors or even the SBA. It is not unheard of the federal agencies to misapply their own rules.
- Even the SBA has been reversed on its day-to-day decisions regarding its own programs
- Unless you can establish the government’s weak position upfront, then federal prosecutors will take the gamble and move forward with criminal prosecution.
- Contractors often retain defense counsel who is not deeply familiar with federal procurement rules and programs. As a result, federal prosecutors gain the advantage.
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 investigation is a critical factor. Is someone at work now talking to you that 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.
Do You Have to Speak to Law Enforcement Agents if They Approach You?
Federal law enforcement agencies are trained to make you feel tremendous pressure to speak to them. However, you want to plan on speaking to them but not without legal counsel present. This is a crucial aspect of a government investigation when your legal rights, constitutional rights, and others, could be in serious jeopardy. You do not have to provide incriminating statements. At best, you can ask to have your attorney present. Learn more about SBA Affiliation Rules – Important New Government Contract Small Business Guidance.
Government Investigation Tips
Find out if you’re under federal criminal investigation, be careful with who you talk. Speaking to third parties can be problematic in that those people can be called to testify or issued a subpoena. Whatever you do, always remember that the investigation office keeps tabs on what you do. You never want to move forward against the federal prosecutor without having a team on your side that understands the substantive areas for which the government is seeking criminal liability.
Hire Criminal Procurement Fraud Attorneys That Understand Government Contract Law
Oftentimes government contractors may face both civil and criminal fraud charges. Having two types of ongoing federal investigations can be tricky in that evidence collected in one type of case may be insufficient while being sufficient for the other type of case.
At Watson & Associates, LLC we offer criminal procurement fraud lawyers that work with a team of professionals that understand the procurement regulations while still defending against the harsh penalties in a criminal case. Our attorneys represent large federal contractors and small businesses charged with government contract fraud.
What makes our law firm different is that we utilize the expertise and background of our staff and collectively pool together what may be considered a sound legal defense. In addition, compared to some local criminal defense attorneys, we understand federal procurement regulations and the legislative intent of those statutes. This comes in handy when we serve as contractor defense attorneys involved in white-collar litigation and investigations.
Watson & Associates’ criminal procurement fraud investigations and defense lawyers bring a wealth of information when involved in False Claims Act/qui tam cases, criminal charges involving the Anti-Kickback Act, Major Fraud Act, Buy American Act and more. If we cannot resolve criminal investigations promptly and favorably, our defense team stands ready to aggressively represent our federal contractor clients at trial.
We have received numerous calls from government contractors where the government’s investigation has been in place for months and the contractor, or its employees have already submitted statements or documents to the OIG or DOJ without hiring counsel. These situations build the foundation for a dangerous outcome. Companies sometimes think that since it has done nothing wrong, then there is no need to retain legal counsel. Only to find out that the government later targets them for fraud against the government. You should focus on protecting your rights early in the investigation process rather than later.
Call Our Government Contract Investigation Attorneys If you See Signs of Being Under Federal 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.
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