The startling law enforcement actions taken against the world-renowned Gibson Guitar Corp. over the past two years should provide clear warning for every American company—without notice, your company suddenly can become the target of a federal search warrant executed by armed federal agents with authority to seize property, documents, computer equipment, and more, while also attempting to conduct un-counseled interviews of key company employees. In view of the significant risks that such actions could pose for a company and its employees, companies should develop a comprehensive guidance policy for contact with law enforcement officials as an element of their overall risk management and corporate compliance programs.
Gibson Guitar may seem an implausible focus of federal law enforcement interest, but, in November 2009 and again in August 2011, law enforcement agents with the U.S. Fish and Wildlife Service executed federal search warrants on Gibson Guitar factories and the premises of several of its suppliers in Nashville. On both occasions, the agents seized physical and documentary evidence, along with shipments of exotic wood that allegedly had been imported in violation of the Lacey Act, an endangered species law that was amended in 2008 to include plants as well as animals. Following the execution of the search warrants, the U.S. Attorney's Office for the Middle District of Tennessee filed two civil actions seeking forfeiture of the seized pallets of exotic wood. Recently, however, based in part upon its review of the seized documentary evidence, the government escalated its enforcement response and has sought to stay the civil forfeiture actions pending conclusion of a related criminal investigation of Lacey Act offenses involving the same shipments of wood.
Preparation Is Key
Although a robust corporate compliance program is a critical component of an overall risk management strategy, it cannot guarantee that the company will not someday become a target of law enforcement interest. As with any other risk scenario, the keys to successful management of an encounter with criminal investigators are advance planning and training. For this reason, a tailored guidance document should be developed for each component of the company's business operations to provide clear direction to senior managers regarding their potential interaction with law enforcement authorities, to ensure swift notification of senior corporate...