Government and Internal Investigations
Too few lawyers are experienced in handling matters implicating highstakes criminal and civil liability. Most white-collar criminal investigations not only carry criminal sanctions that present the possibility of substantial fines, debarment, and in the case of individuals, deprivation of liberty, but "follow-on" civil lawsuits - initiated either by the Government or private plaintiffs - routinely result in unfortunate "bet the company" decisions. When adverse publicity is added to the mix, the situation can appear, at times, unbearable.
Our Government and Internal Investigations lawyers are uniquely experienced and qualified in these matters. Our first and foremost goal is to formulate the best strategy to defend the criminal investigation. We routinely explore many options in this regard, recognizing that the best criminal defense can be frequently accomplished through behind-the-scenes efforts instead of the courtroom. Our strategy also includes a detailed analysis of all ramifications of the criminal investigation, including potential criminal and civil penalties, the possibility for increased criminal and civil investigations in the future, as well as the investigation's present and future impact upon the client's financial well being and public image.
We believe that most government and internal investigations can be resolved by recognizing the need to be less conventional. We strive to guide our clients -- individual and corporate -- to make the best business judgments by anticipating future changes rather than researching past precedent.
Our Clients
Our Government and Internal Investigation lawyers have represented institutional, corporate, and individual litigants before grand juries throughout the United States, in agency and administrative proceedings, and in private litigation closely related to the original investigation. We have also led, conducted, and participated in numerous internal investigations, both representing entities as well as individuals. Our matters are frequently the subject of intense public scrutiny.
Our Experience
Our lawyers have participated in the investigation and trials of numerous criminal and federal and state regulatory offenses, including alleged violations of the antitrust laws, health care fraud, corporate bribery, securities fraud, environmental crimes, federal agency fraud, the Foreign Corrupt Practices Act, tax evasion, bank fraud, economic espionage, U.S.
Selected Results*
Lead counsel representing a senior vice president of a federally-insured bank against an extensive federal indictment that alleged eight crimes against our client, including bank fraud (one count), misapplication of bank funds (five counts), and federal false statements (two counts). The Federal Bureau of Investigation (FBI) and the Federal Deposit Insurance Corporation (FDIC) jointly investigated the case, and it was prosecuted by two Assistant U.S. Attorneys from the U.S. Attorney's Office for the District of Minnesota. After the U.S. Government rested their case, our attorneys moved the U.S. District Court to dismiss all charges against our client. The U.S. District Court Judge granted this motion in part and dismissed the two federal false-statement charges. However, the Judge stated that the U.S. Government's evidence with respect to the bank fraud and misapplication of bank funds charges was "strong." The Judge submitted the remaining six charges to the jury one day later. On April 6, 2012, after four days of deliberation, the jury returned "not guilty" verdicts for each of the remaining charges, resulting in a complete victory for our client.
Lead counsel representing the Minnesota State Board of Public Defense in connection with the State of Minnesota's government shutdown. Coordinated and funded by the Board of Public Defense, Minnesota public defenders represent indigent accused people in each of Minnesota's 87 counties. The State Board of Public Defense sought emergency relief to require the State of Minnesota to fund the public defenders and the courts in the event of a state-government shutdown. Several Minnesota senators, represented by a former state senator, claimed that our requested relief would violate the Minnesota State Constitution. Covering the hearing, the Minneapolis/St.Paul StarTribune stated that "Madel made the most impassioned arguments, citing three U.S. Supreme Court rulings that mandate continuation of funding for the judiciary: Gideon v. Wainright, requiring effective counsel at public expense for those accused of felonies, Argersinger v. Hamlin, ensuring legal representation of indigents for misdemeanors and In re Gault, extending the same right for juveniles." On June 28, the District Court granted our emergency petition in full, thus requiring the State of Minnesota to fully fund the public defenders and the courts after the government shutdown (which then occurred on July 1, 2011).
Lead counsel representing an independent three-member Special Committee of the Fiesta Bowl Board of Directors that was headed by a former Chief Justice of the Arizona Supreme Court. The Special Committee was formed to investigate allegations that the Fiesta Bowl had reimbursed employees for campaign contributions, that a prior investigation had covered-up criminal conduct, and that the Fiesta Bowl had made numerous other improper expenditures. Our five-month investigation included 87 interviews of 52 individuals and the review of 55 gigabytes of electronic data and more than 10,000 additional hard copy documents. Our investigation culminated in a 276-page Final Report with 1,562 footnotes and thousands of additional pages of supporting schedules and spreadsheets. The report is publicly available here. The Final Report was covered by dozens of media outlets and has received widespread praise, including:
- The Arizona Republic's Editorial Board stated: "The Fiesta Bowl executive committee should never lose sight of what appears to have saved their event's bacon, at least for now: the unflaggingly candid 276-page report released by the Fiesta Bowl itself, which exposed all those ugly warts." Other reporting from The Arizona Republic referred to the report as "comprehensive."
- A leading legal commentator stated: "Any lawyer or other person asked to lead a special investigation centered on wrongdoing of the type that now surrounds the Fiesta Bowl should read RKMC's report first."
- Arizona Attorney General Tom Horne called the report "comprehensive."
- The Bowl Championship Series (BCS) Task Force -- a Task Force that was created to review the Fiesta Bowl's conduct and our Report -- called our investigation "exceedingly thorough" and noted that had the Special Committee not produced such a "thorough and open report" the Task Force "almost certainly would have recommended termination of the BCS Groups' involvement with the Fiesta Bowl."
- NCAA President Mark Emmert stated that "The [Fiesta Bowl] special report was obviously extremely detailed and outlined behaviors none of us would be supportive of and I think the board was forthright in putting all that information before the various bodies."
- Sports Illustrated's Austin Murphy noted that the Special Committee's investigation (in contrast to an earlier investigation) was "decidedly not a whitewash."
Represented two-time Medal of Valor recipient and 20-year veteran of the Minneapolis Police Department in criminal trial alleging felony false imprisonment, arrest without authority, interference with an emergency call, and disorderly conduct. After the court dismissed the felony false imprisonment and arrest without authority charges for lack of probable cause, obtained jury-trial acquittals of the remaining charges in September 2010.
- Represented Best Buy Co., Inc. in internal investigation, criminal referral to federal government, and related civil litigation against supplier. After discovering employee's acceptance of bribes from supplier relating to alleged $40+ million scheme to defraud, led team that referred matter to U.S. Attorney's Office, Federal Bureau of Investigation, Internal Revenue Service, and U.S. Postal Inspector's Office. In February 2009, the employee pled guilty to conspiracy to commit mail fraud and money laundering. In July 2009, the United States indicted the primary owner of supplier. In June 2010, a federal jury convicted the primary owner for 24 of 26 alleged federal crimes, including conspiracy to commit mail fraud, money laundering, income-tax evasion, and conspiracy to defraud the United States. In December 2010, the primary owner received a 15-year sentence, the employee received a 7 1/2-year sentence, and Judge Davis ordered all defendants to pay over $32 million in restitution.
Represented Digital River, Inc. and Digital River Marketing Solutions, Inc. in internal investigation and subsequent civil investigation relating to alleged conspiracy to commit computer fraud and computer hacking. Within 48 hours of filing suit in May 2010, obtained ex parte federal order to seal the litigation and a separate temporary restraining order prohibiting defendant from, among other things, attempting to sell the alleged stolen data and from destroying all relevant documents. Permanent injunction entered against defendant.
- Represented defendant CompuCredit Corp. in Akanthos Capital Management LLC, et. al v. CompuCredit Corp. et al., where U.S. District Court for Minnesota denied plaintiffs/indenture-owners' motion for temporary restraining order to block CompuCredit from issuing approximately $25 million dividend and from engaging in spin-off transaction. Argued motion to transfer venue of first lawsuit to the U.S. District Court for the Northern District of Georgia. Currently representing CompuCredit Corp. in price-fixing lawsuit against original Akanthos plaintiffs. Both cases are currently pending in the Eleventh Circuit Court of Appeals.
Financial corporation. Represented corporation regarding investigation by Federal Trade Commission and over 40 states. Reached settlement with states.
Construction corporation. Represented construction corporation in internal investigation relating to alleged fraud of supplier. Obtained settlements against certain former employees. No investigation resulted of corporation.
Katun Corp. v. Clarke, 484 F.3d 972 (8th Cir. 2007). Led internal investigation of corporation relating to alleged violations of Foreign Corrupt Practices Act, mail-fraud statutes, wire-fraud statutes, illegal campaign contributions, computer fraud, tax crimes, escheat statutes, and other crimes. Lead counsel defending Katun Corporation in concurrent federal grand-jury investigation. After settling with the United States and paying approximately $11 million, served as lead counsel in settlement reached with former shareholders for $11.65 million. After U.S. District Court held the settlement violated public policy, the Eighth Circuit Court of Appeals reversed and reinstated the settlement.
Mauzy v. Edward Kraemer & Sons, Inc., Civ. No. 02-879 AJB, 2004 U.S. Dist. LEXIS 5098 (Mar. 4, 2004). Represented top criminal-defense attorney in indemnification dispute relating to defense attorney's defense of client. Obtained plaintiff's summary judgment on liability and damages.
Minnesota Vikings. Lead counsel representing the Minnesota Vikings in connection with the Arctic Blast investigation in 2003, including allegations of sexual misconduct and improper expenditures.
State of Minnesota v. Kirby Puckett: Defended Major League Baseball Hall of Famer Kirby Puckett against felony false imprisonment and other criminal charges. Defendant was acquitted of all charges after jury trial.
Isaiah ("J.R.") Rider, Jr. Defended former Minnesota Timberwolves player J.R. Rider in civil lawsuits relating to incident at Mall of America.White Collar Crime Articles
Selected Articles
The Truth Behind Pretexting: In-house Investigations and Professional Responsibility Concerns
To this day, The Wall Street Journal, New York Times, and internet blogs continue to run new articles and queries focusing on the growing scandal involving H-P's investigation and its pretexting techniques. While many of these reports inquire about criminal liability for those involved, this article discusses the professional responsibility consequences for lawyers involved with pretexting. The simple truth is that lawyers are held to a higher bar than just avoiding criminal conduct. Read more.
So You Think You Don't Need To Worry About Export Regulations? Think Again.
While companies with extensive experience exporting may not be surprised at the reach of U.S. export regulations, those newer to the game face risks that they may not have imagined. Read more.
Document Management and Retention Post Arthur Andersen L.L.P.
Recent cases like Arthur Andersen LLP v. U.S., 125 S.Ct. 2129 (2005) have left many companies wondering what to do about document management and retention. Although the Supreme Court reversed the Arthur Andersen conviction, the Court was clear that a company can be held criminally liable when it implemented a document destruction policy with an intent for wrongdoing. Read more.
When Does Uncle Sam Want You? A Report from Minnesota's U.S. Attorney
Terrorism. The DOJ is concerned with terrorism financing, and any conduct that might aid terrorism financing, such as offshore banking, immigration fraud, and identity theft.
Corporate Fraud. After Enron, the DOJ is paying particularly close attention to the integrity of financial institutions and to misconduct by professionals such as accountants and attorneys.
Accountability of Corporate Defendants. The DOJ has made it no secret that it will pursue corporate defendants, particularly in relation to individual defendants, as it emphasizes seeking a company waiver of the attorney-client privilege and maximizing self-policing by big business.
Investment and Securities Fraud. Insider trading, market manipulation, financial statistics fraud, and general investment fraud are among the DOJ concerns in this area.
Healthcare Fraud. Home healthcare, pharmaceutical diversion, and Internet pharmacy have emerged as the problem areas in healthcare, attracting government investigation.
Cybercrime and Identity Theft. While forty-seven percent of all such complaints go to the Federal Trade Commission, cybercrime and identity theft are actually a top priority for the Federal Bureau of Investigation and the Secret Service.
Public Corruption. Even government is not excused from selfpolicing.
Corporate Embezzlement.
Bank and Financial Institution Fraud.
Indian Gaming. This segment is a $19.4 billion annual industry. Of the top gaming facilities in the United States, three are in the State of Minnesota.
Litigation Practices > Government and Internal Investigations