Investigation and Prosecution of Federal White Collar Cases

Below, federal white collar defense attorney David Benowitz answers questions about how the government investigates and prosecutes white collar cases.

What happens first in a white collar crime case, before the arrest?

David Benowitz: Typically what happens is a government agency represented by a law enforcement agent will do an investigation. It might involve subpoenaing bank records or executing search warrants at a person’s office and/or home. Typically what happens before there is an arrest is that there will be some negotiation with the prosecutor in the case. Prosecutors in white collar cases want to try to resolve the case before someone is even arrested. That does happen a fair amount of the time, but in a typical non-white collar case, the case starts with the arrest. That is not how it works in a white collar case.

How are white collar criminal investigations conducted?

David Benowitz: The way they’re conducted is unlike a non-white collar case, which starts with the arrest. White collar crime cases start with the investigation. That means that some law enforcement agency will get a tip or they will get information that leads them to think that there’s something going on with a certain company or a certain person, so they’ll start investigating. They will subpoena documents and they will look at e-mails. They will try to get a search warrant and they might get an approval for an electronic intercept or a wiretap. They’ll try to build their investigation that way and that would eventually culminate with either an arrest of someone or a notification by letter to a person that they are the target of an investigation. It is a different process than it would be for a non-white collar case.

What agencies are involved in investigating white collar criminal cases?

David Benowitz: There are numerous agencies involved in investigating white collar crime. The FBI is involved and potentially the IRS. The FDA is involved in investigating alleged violations of importation requirements for pharmaceuticals. The Department of Homeland Security and various Inspector Generals’ offices of various agencies also get involved in white collar cases, as well as the Small Business Administration. The Department of Labor investigates ERISA cases and I’ve seen a lot of prosecutions for ERISA violations. There is a whole host of agencies that do this type of work.

What does the prosecution need to prove in a white collar case?

David Benowitz: That varies from charge to charge. For example, if you’re charged with conspiracy in the white collar context, they have to prove an agreement to do something illegal along with an overt act. It depends on the context. For example, in the fraud context the government has to prove that you fraudulently obtain something of value, whether it be from a bank in a mortgage context or from the U.S. government in a government procurement fraud context. There are also different areas that involve white collar crime, but those are the basic things the government would have to prove.

Are white collar crimes typically heard in state or federal court?

Typically white collar crimes are prosecuted in federal court because usually the nature of the crime is that it crosses state lines. It is easier for federal agencies to prosecute them. Sometimes they involve alleged theft from government agencies, so they are more typically brought in federal court.

What type of evidence is presented in a white collar case?

David Benowitz: White collar cases tend to be very paper intensive. The government will be looking at bank records and contracts. For example, in the health care context the government will be looking at medical charts or different plans of care that the government might alleged to have been filled up fraudulently. They might be looking at timesheets if they are alleging that people are committing Medicaid fraud. You’ll have a situation where health care workers are claiming to have worked hours they didn’t work, so you’ll see a lot of paper in a white collar case. There is also the other aspect of it where the government may very well be looking to present wiretaps or use cooperating witnesses.