Federal Corporate Investigations: Company and Individual Defense

The company that employed you for fifteen years will sacrifice you to save itself. This is not cynicism. This is how the system is designed. The Department of Justice explicitly requires companies to identify "culpable individuals" to receive cooperation credit. Your employer has to name names to get a declination. And the lawyer conducting your interview - the one asking you questions right now - works for the company, not you.

Welcome to Spodek Law Group. Our goal is to explain what defense attorneys know, but most employees never learn until it's too late: in a federal corporate investigation, your interests and your employer's interests diverge the moment the government starts asking questions. The Upjohn warning they give you before your interview is essentially a "corporate Miranda" - everything you say can and will be used against you, while the attorney-client privilege protects only the corporation.

This is the fundamental truth nobody wants to say publicly. Companies that cooperate with federal investigators get declinations - formal statements that the DOJ won't prosecute. The individuals that those companies identify get indictments. The company pays a fine. You face prison time. That's the trade the system is designed to facilitate.

The Upjohn Warning: Your "Corporate Miranda"

Here's something most employees completely miss. When your company's lawyer sits you down for an interview during an internal investigation, they give you something called an Up john warning. Most people barely hear it. They nod along while their mind races about whether they did anything wrong, about what they're going to say, about whether this will affect their job. They think it's just a legal formality, some boilerplate language the lawyer has to recite before getting to the real questions.

But that warning is actually the most important thing anyone will tell you during this entire process. It's the company telling you - in language required by law - that you're about to make a potentially catastrophic mistake if you don't understand what you're agreeing to.

The warning basicallyy says three things:

• First, the lawyer represents the company, not you.
• Second, the attorney-client privilege for this conversation belongs to the company, not you.
• Third, the company can waive that privilege anytime it wants and share everything you said with federal prosecutors.

Sound familiar? That's because it's the corporate equivalent of a Miranda warning. Except the constitutional protections you think you have dont apply.

In Upjohn Co. v. United States back in 1981, the Supreme Court confirmed that a company's lawyer can interview employees and keep those conversations privileged. What most people don't realize is that the privilege belongs exclusively to the corporation. Your employer can waive it without your permission. They can hand your words directly to the DOJ. And increasingly, that's exactly what they do - because the government rewards them for it.

Think about what this means. Your cooperating with the investigation becuase you think your doing the right thing. Your answering questions honestly becuase you have nothing to hide. And every word your saying is being documented by someone whose job is to protect the company, not you. If the company decides later that sacrificing you is the path to a declination, that interview transcript becomes Exhibit A at your criminal trial.

The DOJ's "Individual Accountability" Mandate

Heres the kicker. The Department of Justice dosent just encourage companies to identify individuals - it requires it for cooperation credit. Deputy Attorney General Todd Blanche stated that "individual accountability" is the DOJ's "first priority" and the "strongest deterrent against future corporate misconduct." The Monaco memorandum directed prosecutors to "strive to complete investigations into individuals prior to or simultaneously with the entry of a resolution against the corporation."

Read that again. The government wants companies to help build cases against there own employees as a condition of receiving leniency.

Under the current Corporate Enforcement Policy, a company that voluntarily self-discloses misconduct, fully cooperates, and timely remediates can receive a declination - meaning no criminal charges at all. But "full cooperation" means identifying every person who might be responsible. The company has to do the prosecutor's work for them. And they do it using interviews with you.

The numbers paint a stark picture. According to Gibson Dunn's year-end report, 35% of executives were charged in corporate investigations during 2024 - an all-time high. The DOJ resolved corporate cases totaling approximately $2.3 billion, triple the previous year. This isn't a coincidence. The system is working exactly as designed. Companies are buying their way out of prosecution by delivering their employees to the government.

Todd Spodek has seen this pattern play out dozens of times. Clients come to Spodek Law Group after sitting through an internal investigation interview, completly unaware that everything they said will potentially be used against them. They trusted the company lawyer. They thought cooperation would protect them. They were wrong.

Why Joint Defense Agreements Collapse

Lets talk about joint defense agreements. When a corporation and its employees are all under investigation, theres a legal mechanism that supposedly protects everyone: the joint defense agreement, or JDA. The idea is that everyone shares information under a common interest, protected by attorney-client privilege, so the defense team can coordinate strategy. Defense attorneys from diffrent parties can talk openly about the case, share documents, and plan together without worrying that there communications will be used against any member of the group.

Sounds good in theory. The theory actualy makes sense - if your fighting the same enemy, you should be able to coordinate your defense. In practice, though, these agreements collapse the moment the company decides to cooperate with the government. And that moment comes faster then most employees expect.

The Yates Memo created a fundemental tension here. In order for a company to recieve any cooperation credit, it has to disclose wrongdoing by individual employees. But if the companys in a JDA with those employees, disclosing information might violate the agreement. So what happens? Companies either structure JDAs with escape clauses that let them share information later, or they simply exit the agreement when cooperation becomes the better path.

Heres were it gets worse. You might not even know the JDA has collapsed. Your employer might have already started sharing information with prosecutors while your still operating under the assumption that your protected. By the time you realize whats happening, your statements are in the governments hands.

In United States v. Weissman, both the defendant and his corporation were being investigated. Prior to trial, they met with corporate counsel to discuss strategy. Weissman made damaging admissions during that meeting. The corporations counsel took notes. Later, those notes were provided to the government. The very meeting that was supposed to be protected became the evidence used against him.

This is the trap. You think everyones interests are aligned. You think the company lawyer is helping you. You think the JDA means your communications are safe. And then the company makes a rational business decision: its cheaper to pay a fine and identify you then to fight alongside you.

The Investigation Timeline You Didnt Know About

Most people think the investigation starts when someone tells them about it. That's almost never true. The investigation has been running for months, sometimes years, before you receive any notification. Federal agents have been reviewing your emails. Prosecutors have been mapping out the timeline of events. Forensic accountants have been tracing money. All of this happens in the dark, while you're continuing to work as if nothing is wrong.

Federal investigations often run for 12 to 24 months before the target even knows they're under scrutiny. The SEC median time to file an enforcement action is 21.6 months, according to their own reports. That's almost two years of the government gathering evidence, reviewing documents, interviewing witnesses, and building their case - while you're going about your daily life completely unaware that a massive legal proceeding is taking shape around you.

By the time your company announces an "internal compliance review" or retains outside counsel for an "internal matter," the investigation has probly been running for months. The subpoenas have already been issued. The documents have already been collected. The witness interviews are designed to fill in gaps in a case that largely exists.

And heres the uncomfortable truth: by the time someone asks for your interview, they already know most of what happened. The questions they're asking aren't really to gather information - they're to lock you into a story. If your story matches their evidence, you become a witness. If it contradicts their evidence, you become a defendant.

At Spodek Law Group, clients come to us at every stage of this process. Some realize early that they need separate counsel. Others come to us after they've already given statements they shouldn't have. The outcome is dramatically different depending on when they reach out. The earlier the better. Always.

The Fifth Amendment Trap

Heres the inversion that destroys careers. The Fifth Amendment protects you from self-incrimination in criminal proceedings. Its one of the most important constitutional rights Americans have. But it dosent protect you from consequences in civil or employment contexts. The protection that seems so absolute in theory turns out to have massive holes in practice.

So what happens when your employer - acting essentially as an arm of the government investigation - asks you to sit for an interview? If you invoke the Fifth Amendment and refuse to answer questions, your employer can view that as non-cooperation. You might be fired. In some industries, you might face additional regulatory consequences - FINRA can take adverse inference against securities professionals who invoke the Fifth, effectivly ending there careers. Your employer can terminate you for non-cooperation with an internal investigation, even if that non-cooperation is based on constitutionaly protected rights. Your career in the industry might be over.

But if you cooperate and answer questions, everything you say can be handed to federal prosecutors. Your civil cooperation becomes criminal evidence. Your trying to keep your job while unknowingly building a case against yourself.

This is the trap. Criminal law says stay silent. Employment reality says cooperate. Both paths lead to destruction if you dont have your own attorney guiding the process.

The employees who survive this situation are the ones who understand that they need independant legal counsel from the beginning. Not the companys lawyer. Not a lawyer paid for by the company. There own lawyer, whose only loyalty is to them.

It's not just about having someone in the room during the interview. It's about having someone who can negotiate the terms of your cooperation, advise you on what to say and what not to say, and protect your interests when they inevitably diverge from the company's interests.

The Numbers That Should Terrify You

Federal conviction rates are approximately 90%. Thats not a typo. The IRS Criminal Investigation division reports a 90% conviction rate for their cases. Once the government charges you with a federal crime, there's a 90% chance you're going to be convicted. This isnt like state court, where cases get dismissed or defendants walk. This is a system built for convictions.

Why is the rate so high? Becuase federal prosecutors dont bring charges they might lose. They investigate for years. They gather overwhelming evidence. They secure cooperating witnesses - often employees from the same company who agreed to testify against there collegues in exchange for leniency. They review thousands of documents, trace every transaction, and interview dozens of witnesses. By the time they indict you, they believe they have a virtually airtight case. The trial is almost a formality.

The math is brutal. If your company is under investigation and youve been identified as a potential responsible party, the governments conviction machinery is already warming up. The company can recieve a declination and avoid prosecution entirely. You face a system designed for convictions.

Consider the Binance case. The company pled guilty to Bank Secrecy Act violations and agreed to pay a $4.3 billion penalty. The founder and former CEO, Changpeng Zhao, was sentenced to four months in prison. The company payed the largest fine. The individual went to prison.

Or look at Sam Bankman-Fried. He received 25 years. The executives who cooperated - who identified him as the responsible party - recieved minimal sentences or no prison time at all. This is how the system works. Someone pays the price. And if the company cooperates sufficiently, its not going to be the company.

Todd Spodek has watched these dynamics play out across hundreds of cases. The pattern is consistant. Companies survive. Individuals dont. Unless the individual understands the game there playing and takes action to protect themselves independantly.

The Early Warning Signs

How do you know when your in trouble? The warning signs are often subtle, but practitioners learn to reconize them. Most employees miss these signals completely, because they don't understand what they're looking at. By the time they realize something serious is happening, the investigation has progressed to a point where there options are severly limited.

Watch for these indicators:

• Your company announces a "routine compliance review" - especially if it involves outside counsel from a major law firm. This is rarely routine.
• HR schedules an interview and mentions that legal will be present.
• Colleagues are placed on administrative leave without a clear explanation.
• You recieve a document preservation notice telling you to keep all emails and files.
• The company hires a law firm known specificaly for internal investigations and white collar defense.
• Senior executives suddenly become unavailible for meetings.
• IT starts asking questions about document access and email archives.

Any of these should trigger immidiate action. Not next week. Not after the weekend. Today.

The mistake most people make is waiting to see what happens. They assume if theyre innocent, they have nothing to worry about. They dont understand that innocence isnt the question - exposure is. Even if you did nothing wrong, your words during an investigation can create problems you never anticipated.

Here's what practitioners know: by the time you receive a target letter or learn that a grand jury is investigating, your options have dramatically narrowed. The time to act is before the investigation focuses on you specificaly. The time to get your own counsel is when the internal investigation begins, not when it concludes.

Your Only Path Forward

The path forward is actually straightforward, even if it's not what you want to hear. After reading everything above, you might feel overwhelmed by the complexity of these situations. You might feel like the deck is completly stacked against you. And in many ways, it is. But that dosent mean your without options. It means you need to act quickly and decisively.

Get your own attorney immediately. Not a lawyer recommended by the company. Not a lawyer paid for by the company. Not someone from the same firm handling the internal investigation. Your own counsel, retained by you, paid by you, whose only obligation is to protect your interests and your interests alone.

Before any interview with company counsel, your attorney should understand exactly what your exposure is and advise you on whether to cooperate, what to say, and how to protect yourself. If your employer pressures you to participate without your own counsel present, that pressure itself is a warning sign.

If you recieve an Upjohn warning, take it seriously. The company is telling you - legally required to tell you - that there not on your side. Listen to what theyre saying.

If you belive your company is under investigation or about to be investigated, dont wait. The window to protect yourself closes faster than you think. By the time you're identified as a responsible individual, the company's already made decisions about how to position itself - and those decisions might include sacrificing you.

Call Spodek Law Group at 212-300-5196 before you talk to anyone else about the investigation. Before you sit for an interview. Before you produce documents. Before you answer questions from company counsel. Before you make decisions that cant be undone.

The consultation is free. Weve helped hundreds of people navigate exactly this situation. We know how prosecutors think, how companies position themselves, and how to protect individuals caught in the middle. The mistake of waiting - thats not free. That's potentially catastrophic.

Spodek Law Group has handled federal corporate investigations for years. We understand how companies think, how prosecutors build cases, and how individuals get caught in between. We can help you navigate this process - but only if you reach out before the damage is done.

Dont assume your interests and your employers interests are aligned. They arent. Thats not cynicism. Thats how the system is designed. The question is whether you understand it in time to protect yourself.