Compliance Investigations

by McCabe.Law Group, LLC

The business world has changed, particularly for highly regulated enterprises. As a leader in your company, you must conduct internal investigations and respond to inquiries from government regulators, shareholders, and litigants who feel they are being mistreated. The responsibilities and compliance risks placed on you today are great, and the costs of non-compliance can be staggering. Furthermore, as you are undoubtedly aware, there is a significant danger to you. In the worst-case scenario, you might lose your job and revenue, and your reputation or company’s future could be harmed.

Due to these factors, it is imperative to take all inquiries from federal and state investigators, and concerns voiced very seriously. Businesses in heavily regulated industries, like healthcare, face this challenge; it also applies to utilities, publicly listed firms, government contractors, and companies or organizations that get funding from the taxpayer.

If you are being investigated, you need help. If someone is accusing you or your company of breaking the law, engaging in illegal retaliation or intimidation, causing safety or security breaches, or making other serious allegations, one of your priorities should be to seek legal help from an attorney experienced in assisting regulated companies in responding to a federal or state investigation.

You can successfully conduct an internal investigation of your business operations, put corrective measures into place, and find all the documentation you require to bring back to an investigator as soon as possible, together with the compliance investigations lawyer from McCabe.Law Group, LLC.

For more information, contact McCabe.Law Group, LLC

Establishing Corporate Compliance Programs

Corporate Compliance Programs are Essential

Many federal and state laws, such as the Federal False Claims Act, the Wire and Mail Fraud Act, the Foreign Corrupt Practices Act, and regulations about employment, securities, and the environment, subject today’s corporations to criminal and civil enforcement. Many firms have created corporate compliance procedures to safeguard their operations and prevent the substantial costs of sanctionable behavior. Some businesses, however, do not believe that their standards and practices will be adequate to discourage civil and criminal misconduct on their own.

Since even the most ethical company cannot monitor every employee’s behavior, formal compliance procedures have proven to be the most successful means of safeguarding the company and identifying and stopping legal infractions. With the implementation of new corporate sentencing standards and case law that repeatedly reward internal responsibility and inflict harsh penalties on businesses that fail to implement compliance processes and enforcement procedures, these programs have become even more crucial.

Companies may create internal processes to guarantee that all workers behave lawfully before the first sign of a problem, which is the most vigorous defense against government monitoring and potential sanctions. Effective compliance programs are like “insurance” that may guard against intentional and unintentional misconduct within a company. These compliance programs guarantee that any policy infraction is quickly identified and fixed. Any defense against a criminal charge by government prosecutors must have a compliance program. It serves as the first line of defense in the event of a “whistle-blowing” former employee or civil enforcement procedures. Furthermore, defendant firms that implement successful compliance systems may be able to lower their fines under the present sentencing standards significantly.

Programs for corporate compliance provide advantages beyond only lessening criminal penalties. Compliance procedures help businesses save money by preventing employee theft and the misappropriation of company finances. These initiatives can stop a business from failing and prevent potential legal repercussions. Additionally, they have a highly positive reputation among clients, workers, regulators, and investors.

The Sentencing Guidelines: Guarding Against Sanctions Through Corporate Accountability

An effective program to prevent and detect law violations refers to a set of guidelines that have been judiciously chosen, put into practice, and upheld to ensure that, in general, illegal activity will be prevented or detected. The organization’s exercise of due diligence in attempting to prevent and identify illegal activity by its workers and other agents is the distinguishing feature of a successful program to prevent and detect breaches of law.

The Guidelines for the Sentencing of Organizations published by the United States Sentencing Commission have grown more restrictive over time. The Guidelines’ obligatory sentences, severe penalties, incarceration, restitution, and forced public disclosures during imprisonment are all intended to prevent white-collar crime. While avoiding prosecution or obtaining the minimum penalty can be challenging if not pursued adequately by experienced counsel, the Sentencing Guidelines specifically state that the severe impact of these sanctions can be reduced if the offense occurred despite an effective program to prevent and detect law violations. Additional benefits accrue if the corporation reports the crime, cooperates with authorities, and accepts responsibility.

Businesses must do more than provide ethics policies to their employees to develop effective programs to prevent and detect legal violations. The hallmark of an effective compliance program is the company’s exercise of due diligence to prevent and detect inappropriate conduct by its employees and agents. The development and proper administration of a company Code of Conduct are required. High-level personnel must oversee established standards and procedures to reduce the likelihood of criminal conduct. Appropriate workforce education regarding the Code of Conduct and open communication between management and employees regarding adherence to the Code of Conduct is crucial. Only compliance programs that incorporate these elements can genuinely be considered adequate.

Corporate Responsibility

Except in those rare instances where the organization is strictly a victim, like in embezzlement, it can be assumed that the business may be held criminally liable if the prosecutor exercises their discretion to indict. If a company’s agent commits a crime while working for the company’s benefit, the company may be criminally liable. Corporate liability can be based on the unlawful conduct of even the lowest-level employees, who may act contrary to their managers’ express directions and even written company policy.

When crimes are committed while an officer or employee performs their job, they may also be held personally accountable. Liability can occur in one of three ways:

An employee has direct involvement in the offense committed
An agent provides support or encouragement for the criminal act
An agent needs to effectively manage or oversee their subordinates to stop the crime from happening

McCabe.Law Group, LLC, can add a unique perspective to representing these delicate matters. We have represented organizations, their officers, and employees in all phases of civil actions, as well as criminal investigations and prosecutions.

Conducting Internal Investigations

Internal investigations and audits are the first step towards ensuring compliance with the law; these services are helpful before implementing a compliance program because these audits highlight issues that need to be highlighted in the program. Failing to develop an adequate compliance program is a significant negative factor. However, failing to enforce a reasonable compliance program can result in dire consequences and may be used to demonstrate willfulness, or worse, after a compliance program has been designed and implemented to meet business needs. These services are the best defense that businesses can mount against government oversight and potential sanctions.

In addition to being less time-consuming and disruptive from an employee and customer relations perspective than government investigations, voluntary disclosure of the findings of an internal investigation to the government can significantly reduce the potential for negative publicity associated with government action or investigation. Overall, the cost of these preventive measures is considerably less than that of litigation. The benefits of internal investigations are compelling. When combined with remedial action when necessary, voluntary audits can be beneficial in dealing with federal agencies contemplating their investigations.

1. Advantages of Voluntary Disclosure

McCabe.Law Group, LLC, has worked with unique boards of directors, committees, and company leaders to help them recognize the benefits and dangers of conducting sensitive internal investigations.

2. Side Effects of Voluntary Disclosure

Will the government guarantee that the disclosure of an internal investigation will result in a decision not to prosecute or significantly reduce the sentence? What noncriminal consequences can arise from disclosing the results of an internal inquiry to government officials? Will the corporation be barred from receiving government contracts or suspended from receiving them? Can litigants obtain the information disclosed in civil proceedings against the cooperating corporation? Will acceptance of responsibility for the events, in addition to voluntary disclosure, encourage civil litigation by parties who feel the corporation’s conduct harmed them?

These are some questions you may face after voluntary disclosure. Talk to a licensed and experienced attorney today to help you answer those questions.

3. Attorney-Client Privilege

We almost always advise clients that counsel conduct initial interviews of employees suspected of wrongdoing due to the risks involved. Specific questions include: What conversations between employees and counsel during the internal investigation are protected by the attorney-client privilege? Is the privilege waived if communications are disclosed when reporting to the government?

Before an investigation proceeds, you must consider these and other matters carefully. McCabe.Law Group, LLC, has experience working with many corporations to resolve challenging situations promptly and appropriately, and we are aware of the potential for internal and external stresses.

Representative Matters

1. Labor and Employment

Our Employment Law and Management Labor Relations Practice legal team has audited corporations’ employment policies, practices, and procedures. Our Employment Practices Audit determines the degree to which an employer complies with applicable laws, points out areas where the employer may be held liable, and makes recommendations for mitigating the risk of employee disputes and grievances, union-organizing activity, arbitrations, and employment litigation.

2. Misuse and Theft of Company Funds

Our legal team represents businesses that have been the victims of theft of trade secrets, misappropriation of company funds, and threats of physical harm to employees. You would need a legal team with extensive knowledge of criminal, employment, and intellectual property law.

3. Banking

Our legal team had participated in committees before that examined a “problem loan,” presenting the results to the board of directors of banking clients while acting as special counsel to a committee of independent directors of a holding company for a savings and loan association. Our attorney has investigated the actions of such a board of directors, resulting in the issue of cease-and-desist orders, and has acted as impartial outside counsel to several banking institutions.

4. Healthcare

McCabe.Law Group, LLC, has examined contracts between healthcare providers to find possible legal infractions at both the federal and state levels, especially about the Medical Assistance Act’s anti-fraud and abuse provisions.

5. Contract Issues

Our legal professionals have assessed contracts to ascertain compliance with the federal “safe harbor” regulations. They also keep a close eye on the views and actions of the Office of the Inspector General (OIG) and are equipped to evaluate possible compliance issues from the OIG’s point of view. Should compliance issues emerge, we can help healthcare providers reorganize or change current relationships to reduce or eliminate the possibility that a specific relationship will be found to be illegal under federal or state law.

Frequently Asked Questions

What is Compliance Investigation?

Compliance Investigation closely examines and methodically investigates any fraud, waste, misuse, or other infractions of relevant laws and regulations.

Why Would One Be Subject to a Compliance Investigation?

Suppose your firm or industry has issues or suspicions of non-compliance with state laws or regulations. In that case, whether they pertain to safety, environmental standards, labor practices, or other areas, you may be the target of a compliance investigation.

What Should I Do If I am Undergoing a Compliance Investigation?

Suppose you find yourself the subject of a compliance investigation. In that case, it is critical that you assist the investigating agency in every way possible and, if necessary, get legal advice to make sure you are aware of your rights and obligations.

How Can One Prevent Compliance Issues in Pennsylvania?

It is critical to keep up with pertinent rules, keep correct records, train employees, and create clear compliance procedures inside your company to reduce compliance risks.