Civil Investigative Demand
Served with a Federal Civil Investigative Demand? Here’s What You Need to Know
A Civil Investigative Demand (CID) is an administrative subpoena that allows federal government agencies to request extraordinary amounts of information from private entities without going through any formal court procedures. If you have been served with a CID, you must respond promptly and appropriately in order to avoid unnecessary (and potentially severe) consequences.
From the U.S. Department of Justice (DOJ) and the U.S. Attorney’s Office to the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB), various federal agencies use tools known as Civil Investigative Demands (CIDs) to gather information during law enforcement investigations. Although these agencies issue CIDs in connection with civil investigations, a finding of civil liability can lead to substantial financial penalties, and the discovery of evidence of intent can quickly turn the investigation criminal in nature.
For individuals and business organizations that have received CIDs, avoiding these types of consequences requires a swift, measured, and strategic response. Avoiding compliance with the CID is unlikely (although it may be possible to limit the scope of the CID), and submitting an untimely or deficient response can increase your risk of federal prosecution. In order to protect yourself and your business or practice, you need to make informed decisions, and you need to make sure you have a crystal-clear understanding of your rights and obligations under federal law.
What Exactly is a Civil Investigative Demand (CID)?
A Civil Investigative Demand is a type of administrative subpoena that the DOJ and other federal agencies have begun to utilize with enhanced frequency in recent years. Although the power to issue CIDs was historically limited to the U.S. Attorney General, the Fraud Enforcement and Recovery Act of 2009 expanded this power beyond the U.S. Attorney General’s Office; and, today, multiple agencies can issue CIDs in connection with a wide variety of federal investigations.
As administrative subpoenas, CIDs are not subject to court approval. The DOJ, FTC, CFPB, and other agencies can issue CIDs at their discretion, and they can do so before initiating formal litigation proceedings. Furthermore, the grounds for challenging CIDs are very limited; and, as a result, individuals and business organizations often find themselves facing extraordinary compliance obligations while having little to no information about what the federal government is investigating.
Typically, CIDs request the production of documents – lots of documents. In fact, for CIDs targeting health care providers and other businesses, it is not unusual for hundreds of thousands of paper and electronic records to be at issue. With response deadlines measured in days and weeks, not months, CID recipients must begin working to identify, collect, and prepare their responsive documents immediately.
Why Have I Been Served with a CID?
For most practitioners and business owners, their first question upon receiving a Civil Investigative Demand is, “Why?” Federal civil investigations almost always come as a surprise; and, at the CID stage, the federal government holds all of the cards.
When preparing a response to a CID, it is important to try to determine your (or your business’s or practice’s role) in the investigation. Are you a witness, a suspect, or a target? At this stage, each of these options has an equal probability; and, while you must comply regardless of your posture in the investigation, knowing whether you are presently at risk for prosecution is nonetheless critical to making informed and strategic decisions.
With regard to the substance of the investigation, the list of possibilities is much longer. While the nature of your business or practice may signal the purpose of the investigation (i.e. if you are a health care provider, there is a strong chance that the investigation is targeting allegations of Medicare, Medicaid, Tricare, DOL, or VA fraud), you cannot afford to make any assumptions about the government’s motives. Examples of the types of allegations commonly investigated through the issuance of CIDs include:
- Antitrust violations
- Consumer fraud in the financial products and services sector
- Health care fraud (Medicaid, Tricare, DOL, and VA fraud)
What are the Risks of Complying (and Not Complying) with a CID?
Although compliance with a CID is mandatory (subject to any modifications your defense attorneys are able to negotiate with the issuing agency or secure through a motion filed in federal district court), it can also be risky. From unnecessarily disclosing information to failing to preserve the attorney-client privilege, there are several ways that CID recipients can expose themselves to avoidable risk during the response process.
Ultimately, the biggest risk with compliance is that the CID recipient will disclose information that the government is subsequently able to use against it in a civil or criminal enforcement proceeding. However, within this broader concern, there are several discrete risks of which CID recipients need to be aware as well. For example, compliant disclosure in response to a general records request could result in tipping off the government to issues that were not previously on its radar. Likewise, if you are currently being treated as a witness, there are various considerations you may need to address in order to avoid placing yourself at the center of the government’s investigation.
What if you don’t comply with the CID? Or, what if you only selectively disclose information in your response? Even though a CID is an administrative subpoena (rather than a court-issued subpoena), failure to comply still constitutes civil contempt. If federal agents discover that you have withheld information (either intentionally or unintentionally) through other sources, then you could face a contempt charge even if you are simply a witness and are not otherwise at risk for facing charges as a result of the investigation.
What Do I Need to Do in Order to Appropriately Respond to the CID?
With these risks in mind, efforts to appropriately respond to a Civil Investigative Demand must be swift and deliberate, and they must be undertaken with the advice and guidance of highly-experienced federal defense attorneys. At Oberheiden, P.C., we represent clients across the country who are facing federal investigations as witnesses, suspects, and targets. As your defense counsel, we will assist you with all aspects and phases of your CID response. This includes:
- Noting All Deadlines. A single CID can have multiple deadlines. We will take note of all deadlines and structure a response plan to ensure that you timely meet your federal obligations.
- Instituting a Legal Hold. Instituting a “legal hold” is critical to ensuring that all responsive documents are preserved. Failing to preserve responsive documents can lead to a finding of contempt, and it may be viewed as an intentional attempt to conceal information from the government.
- Preparing to “Meet and Confer.” If your CID includes a deadline to “meet and confer” with agents from the issuing agency, we will schedule the appointment and prepare to meet with the agents with you or on your behalf.
- Compiling Responsive Documents. As soon as possible, we will meet with you and your key personnel to begin the process of identifying and compiling all responsive documents. Depending on the volume of records requested, this can be an extremely time-consuming process, so it is important to get started as soon as possible.
- Assessing Potential Challenges and Strategies. Concurrently with compiling appropriate records, we will also assess and pursue all relevant grounds for challenging the CID. While the grounds are limited, in some cases it will be possible to significantly reduce the scope of a CID.
- Negotiating the Scope of the CID or Filing a Motion to Quash. Oftentimes, negotiating with the issuing agency can be the most-effective way to limit a CID recipient’s compliance obligations (and seek an extension, if necessary). If this is not an option and the CID exceeds the issuing agency’s authority, then we can formally challenge the CID in court
- Preserving the Attorney-Client Privilege. Prior to disclosing any records to the federal government, it is absolutely essential to ensure that all privileged communications have been redacted. We can handle this for you while also determining if you have any other legal grounds to withhold responsive information.
- Preparing and Submitting Your Response. Once all of the other necessary steps have been completed, we will prepare your response and submit it to the issuing agency on your behalf. From there, we will represent you in any and all follow-up and additional proceedings related to the government’s investigation.
About Oberheiden, P.C.
Oberheiden, P.C. is a federal defense law firm that represents individuals, businesses, and professional practices nationwide in civil and criminal investigations. Led by founding attorney Dr. Nick Oberheiden, our defense team includes several former federal prosecutors who previously led investigations on behalf of the DOJ and other agencies. Meet our defense team.
Discuss Your CID Response with a Federal Defense Attorney at Oberheiden, P.C.
If you need experienced federal defense counsel for responding to a Civil Investigative Demand, we encourage you to contact us promptly for a free and confidential consultation. Our senior attorneys are available 24/7, so call 214-692-2171 or tell us how to reach you online now.