The Problem: You just arrived at your office expecting to begin work for the day. Instead, in walk a dozen or more FBI and HHS Office of Inspector General (OIG) agents who show you a search warrant for the premises. Alternatively, they could hand you a subpoena which references 18 U.S.C. § 3486 and is labeled Subpoena Duces Tecum but does not have the words “grand jury” on it. What do you do now? Based on our experience handling healthcare fraud investigations, both as private attorneys in the White Collar Crime and Government Investigations Practice Group and as former Assistant United States Attorneys, we lay out below the suggested steps to take when met with this situation.
A. What to Do When Faced With a Search Warrant for the Premises.
1. Call Your Outside Counsel.
You have no right whatsoever to resist a search warrant. A search warrant is issued on probable cause by a Magistrate Judge. This means that a Magistrate Judge has already reviewed an affidavit from an agent and possibly even taken testimony from an agent. In issuing a search warrant, the Magistrate Judge has indicated that he/she is convinced there is probable cause to believe that some criminal conduct may have occurred and that there may be evidence of that criminal conduct on the premises which the agents have requested to search. This means that you, your business, and/or your employees may already be the subject of an ongoing criminal investigation. It is equally possible, however, that the government may have reason to believe that there is evidence in your possession that may have no criminal significance with respect to your operations but which would constitute evidence of criminal conduct for a related party. For instance, if your business is a clinic connected to a hospital, the investigation may concern the hospital but not your individual clinic. In any event, it would be wise under all circumstances for you to speak to the government only through your counsel.
Therefore, the first thing you should do is notify your outside counsel as soon as agents appear with a search warrant. Not within the first hour, not after the search has begun, not after the search is completed. You should notify your outside counsel as soon as agents arrive with a search warrant. After you have called outside counsel, the search warrant is the first piece of paper you need to look at very carefully.
2. Review the Warrant.
Agents serving a search warrant must provide you with a copy of the entire warrant which will describe the premises that are to be searched and set the parameters for the search. You can determine by reading the warrant whether your entire office is to be searched or whether only one suite is to be searched. While it may seem strange to suggest it, be sure to check the description of the property to be searched as stated in the search warrant against your address. While not a common event, on occasion, the search warrant may have an incorrect address. In such an event, it is not a valid warrant for searching your building. Be certain that the agents have authority to search your premises before they begin the search.
As the search is proceeding, you also want to make sure that the search does not go beyond what is authorized in the search warrant. For example, if the search authorizes a search of 101 Brown Street, Suite A, but your business occupies Suites A, B and C, then agents are not authorized to enter or to search any of Suite B or C, even if these are adjoining suites. Do not under any circumstances consent to additional searches. If you consent to these searches, you will have waived your constitutional objections to the validity of the search warrant.
3. Identify Potentially Privileged Materials.
Generally speaking, a search warrant does not authorize the seizure of privileged materials, in particular attorney-client privileged materials. Privileged materials may, however, be taken away from your premises in the course of a search. It is common practice with both the FBI and the OIG for there to be, in effect, two teams who appear to participate in the search. One team is the actual search team who investigates the alleged criminal conduct and reviews all of the documents or other materials, including computers and electronic data. If the FBI or OIG anticipates that privileged materials may be obtained in the search, often a “dirty team” will be brought along with the search team. The “dirty team” will segregate all privileged materials from the rest of the search results and the rest of the search team. Privileged materials include attorney-client privileged materials, attorney work-product materials, psychological or psychiatric records (depending on the nature of the premises being searched) or materials which contain evidence of drug or alcohol treatment. Those privileged materials may initially be taken by the agents, but they will then be isolated and segregated from the remainder of the search results and returned to you or your attorney. The use of a “dirty team” allows the search team not to become tainted by having access to these privileged materials. If possible, identify early on for the agents what you believe to be privileged materials. This will facilitate the work of the “dirty team” and will, to the extent possible, limit the inadvertent seizure of privileged materials.
If there is not a “dirty team” present at the time of the search, a motion for the return of privileged documents may be necessary following the search. Obviously, this is a matter which will need to be handled by your attorney. It is your attorney’s responsibility to protect your attorney-client privilege, your patients’ privileges, and any other work-product or similar privileges which may attach to documents seized from your premises.
4. Maintain an Inventory.
As the search is taking place, you should maintain an inventory of all that is being seized. In fact, after the search is concluded, this is precisely what FBI and OIG agents will be required to do themselves The lead agent will be responsible for preparing a complete inventory of each and every item seized from your premises, the location from which those items were seized, and a general description of the items seized. Within five to seven days after the search is conducted (if not sooner), you will be provided with a copy of this inventory. If your offices are a large amount of space, this inventory could become quite voluminous. Regardless of the length of the inventory or the amount of time required to prepare the inventory, you are entitled to a complete and accurate inventory.
5. Do Not Consent to Voluntary Interviews Without Counsel.
A search warrant is not an authorization to interview anyone, but rest assured that the agents will likely ask plenty of questions while they are conducting the search. Once the search team appears at your office, you are free to release any of your employees and send them home. Indeed, once the search has commenced, theoretically, you are even free to go yourself. A search is not a custodial situation. When the agents are in your offices conducting a search, they have no legal right to require you to answer questions, but they are at liberty to ask all the questions they choose to ask and to make notes on your answers.
Since a search warrant does not generate a custodial setting and you are free to leave, agents have no obligation to advise you of your rights before asking you questions. Thus, any statements you or your employees make and any questions answered can be used in developing further leads for the investigation and may ultimately be used against you in the event that the investigation results in criminal charges.
Thus, once the search has begun, you should call all of your employees together and advise all of them that they have a right to decide whether to talk to the agents or not to talk to them, that they have a right to have the company’s attorney present if they do talk to agents, and that they have a right to tell you precisely what they were questioned about in the event that they are questioned outside your presence or outside the presence of your attorney. Take care also to instruct employees that they should in no way interfere with the agents regardless of whether they decide to be interviewed by the agents.
If you allow your employees to be interviewed, make every effort to attend those interviews or have your attorney attend as they happen. If this is not possible because of simultaneous interviews, remember to take the time to debrief your employees who are interviewed outside of your presence to determine what types of questions the government agents asked and what subjects they explored. This will give you valuable information about the scope, the purpose, or the nature of the government’s investigation.
6. Understand the Process.
Knowing what to expect can help minimize the business interruption caused by the execution of a search warrant. Generally, there will be a large team of agents, and they will want to secure the premises and, at least initially, probably will not want to let anyone else into the building. It is safe to say that if you are the target of a search, the process will probably take most of an entire day. To make the process go more smoothly, you may want to instruct all nonessential employees that they can go home.
One of the first things that the agents will do after they arrive on the scene is sketch out a map of your offices or your building. This map will be used to help them prepare the inventory which you will be provided after the search is completed. It is not uncommon for agents to go through the building with a pad of sticky notes labeling offices with numbers or letters, labeling file cabinets, desks, desk drawers, filing cabinet drawers, even bookcases and shelves on bookcases with numbers or letters in order to identify precisely where items seized in the search were when they were seized. When they arrive to conduct a search, agents often will bring with them a large number of boxes. Sometimes they will bring large envelopes. Sometimes they will bring plastic evidence bags. All of these will be used to box, package, and seal items which are seized during the search.
Most searches will also authorize the seizure of computers or computer hard drives and computer storage media such as CD-ROMs, backup tapes or disks, USB storage devices — essentially any type of electronic storage device you can imagine. The FBI has specialized computer evidence personnel, referred to as “CART” personnel (Computer Analysis and Response Team), who will attempt to image the hard drives on your computers onsite if this can be done in a reasonable amount of time. If it does not appear that the hard drives can be imaged in a reasonable amount of time onsite at your premises, then it will be necessary for the computers to be seized, taken back to the FBI offices and imaged by the CART personnel at the FBI offices. After these images are created, generally the computers will be returned to the owner.
7. Be Active After the Search.
In reality, there is not much you can do while a search is underway other than take a deep breath, talk things over in detail with your outside counsel, and wait patiently for the agents to complete their task. After the agents have completed the search, however, there are some important steps that you, through your outside counsel, should pursue in a short period of time. First, contact the prosecutor who is handling the case. Sometimes your attorney will learn that you are not, in fact, the subject of the investigation. Second, discuss the search with your employees, explaining that you intend to cooperate, as you have already cooperated, with the government and that any documents related to those which have been seized should be at all costs maintained. A third step is to consider the necessity of an internal investigation. If you have learned from the prosecutor or from the search itself the nature of the government’s investigation, then it may be possible to allow your outside counsel to conduct an internal investigation in order to determine whether there is, in fact, any reason to believe that you or your employees have been engaged in any conduct which may have generated the investigation by the government.
8. Develop a Media Response.
Quite often, the execution of a search warrant generates media attention. You, along with your attorney, need to discuss a media strategy. This strategy may be simply a posture of “no comment.” In most instances this is the best strategy. The media are inclined to draw conclusions about the nature of an investigation, sometimes based n very limited information about the nature of the investigation. Anything you say to the media may not necessarily be reported accurately. Accordingly, a posture of media silence may be in your best interest. Whatever path you choose, you and outside counsel need to decide whether you are going to have contact with the media or have no contact with the media.
B. What to Do When Faced With a HIPAA Subpoena Duces Tecum.
When Congress passed the Health Insurance Portability and Accountability Act (HIPAA), Congress authorized the Department of Justice to issue administrative subpoenas under 18 U.S.C. § 3486, which is the statute cited on the face of your Subpoena Duces Tecum. These subpoenas are authorized to be issued when a criminal investigation into alleged healthcare fraud has been initiated. Indeed, this type subpoena is referred to by DOJ personnel as “AIDs” or “HIPAA subpoenas,” and they are authorized only when the government agents are involved in “healthcare oversight” investigations. Generally speaking, “healthcare oversight” means the government is investigating allegations that false claims or false documents have been submitted in the context of providing and/or seeking payment for healthcare services. When FBI and HHS-OIG agents are wearing their “healthcare oversight” hats, so to speak, they are not required to obtain the usual HIPAA related waivers or consent to review patient medical records.
Grand jury subpoenas and HIPAA subpoenas are very different animals, even though both can be used in connection with on-going criminal investigations. One of those differences is the matter of grand jury secrecy. The Federal Rules of Criminal Procedure, in particular Rule 6(e), mandates that criminal prosecutors may not share the results of a grand jury subpoena with their civil counterparts in the United States Attorney’s Offices or in the Department of Justice Civil Division. This grand jury secrecy prohibition does not apply at all to a HIPAA subpoena. Consequently, the results of a HIPAA subpoena served upon you for your records could be used not only in connection with a criminal investigation but also in connection with the government’s evaluation of a whistleblower qui tam lawsuit.
1. Limit the Scope of the Subpoena.
When a subpoena is served, often your attorney will have an opportunity to negotiate with the government in order to determine exactly what it is the government wants in response to the subpoena. In discussing a subpoena with the prosecutor, your counsel can attempt to limit the amount of information which you are required to produce or the manner in which you are required to respond to the subpoena. Some subpoenas are drafted so broadly that they may call for a substantial amount of information when, in reality, the government wants a much smaller universe of information. Even if a large universe of documents is sought, outside counsel may be able to negotiate an ongoing “rolling production” schedule which permits you to begin producing some documents while you continue reviewing and preparing additional documents for later production.
2. Identify and Protect Privileged Materials.
A clear advantage of responding to a subpoena as opposed to a search warrant is that, through your outside counsel, you have an opportunity both to review and to protect privileged and confidential material which you cannot do in the context of a search warrant. Your attorney will be able to review each and every document which is responsive to the subpoena for attorney-client privilege or work-product privilege or any other non-disclosure privilege prior to making a production of documents to the government.
3. Respond Fully to the Subpoena.
What you should do in order to comply with a grand jury or HIPAA subpoena, first and foremost, is not treat a subpoena as a routine civil discovery request. Do not attempt to adopt the kind of hunker-down, non-cooperative posture that often is the course of action in the context of civil litigation. One of the clear risks associated with treating a subpoena as a civil discovery request is that the government may decide that the company is not cooperating. If the subpoena has not met with a favorable production of documents, then the government may proceed to the next step by seeking a search warrant.
Additionally, if the government is able to prove that a company or an individual employee or officer of the company has deliberately failed to produce documents that are responsive to a subpoena, then the individual or the company may actually be charged with obstruction of justice. No company wants to be accused of failing to cooperate, nor does a company want to be charged with obstruction of justice (and HIPAA includes a specific healthcare fraud obstruction statute, 18 U.S.C. § 1518).
4. Instruct Employees to Retain Responsive Information in Paper and Electronic Formats.
Finally, upon receipt of a subpoena, whether it be a grand jury subpoena or a HIPAA subpoena, it is essential to issue a directive to your employees who are likely to have responsive documents or electronic data. This directive should have the effect of suspending your normal document retention or document destruction policy and instructing your employees that they should retain all information in paper and electronic formats notwithstanding any provisions in your document retention policy. Outside counsel can assist you in drafting a document hold notice to your employees.
The Result: Healthcare fraud investigations remain a priority for the Department of Justice. In Fiscal Year 2005 (the most recent year for which statistics are available), United States Attorney’s Offices opened 935 new criminal healthcare fraud investigations involving 1,597 potential defendants. There were already 1,689 pending investigations involving another 2,670 potential defendants, and there were 382 filed cases pending which involved 652 defendants. Through the efforts of the DOJ, FBI, and HHS-OIG, approximately $1.47 billion in judgments and settlements were obtained in healthcare fraud cases and proceedings. All of these cases started with an allegation of some wrongdoing which then produced a search warrant or a HIPAA subpoena designed to test the allegation. If you understand what your rights are, what authority the agents executing the search have, the process involved, and how outside counsel can help you, you will be in a better position to protect those rights and minimize any damage to your company.