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At times federal agencies—IRS and FBI—get information that leads to the execution of a search warrant at an individual’s place of business and possibly their residence. This is generally a shocking activity for employees, clients, and family members.
There are a number of expenses related to such warrants that are tangible and intangible in nature. The cost of allegations of impropriety, illegal activity, and fraud for a business ranges from loss of business due to adverse publicity, to the loss of the owner’s freedom through criminal prosecution. Also associated are tangible costs for the subject of an investigation and the business. These tangible expenses include: hiring professionals—such as attorneys and forensic accountants—to defend against the allegations; the impact on the company and the subject’s personal liquidity; the decrease in borrowing capabilities; and the impact on pending contract negotiations. While the tangible loss is significant, several intangible costs exist as well. These costs include: the distraction of owners, the concerns of employees and third-party vendors, and loss of opportunities while funds are entangled in the investigation rather than day-to-day operations. The culmination of both tangible and intangible costs may cause operational issues throughout the company.
When a client’s legal team contacts Sage regarding this type of risk assessment investigation, we work to develop the scope of the investigation with the client and their counsel. We further counsel the client about the process they face and what activities may result from the investigation, i.e. agents contacting employees, third party vendors, and banking entities. We interview the client in depth about the allegations and attempt to determine the source of the allegations. We also interview key employees that may have knowledge regarding the allegations and about the operations of the company to determine if there are potential income tax or money laundering violations. These interviews help develop witnesses to prove or disprove the allegations. In most instances, we counsel the client not to be distracted by the investigations, but to keep focused on their business and allow Sage to arrive at its findings.
Since the government has generally taken all meaningful records in their search, we must concentrate on the money related transactions and other items of value within the company. We also look at the potential for segments of the company that are operating autonomously as a cause or source of the problem due to actions, inactions, or personnel.
We work closely with the attorneys involved in the case and keep them informed. If we determine that an employee is the prospective Whistle Blower then we report to the attorneys and assist our client in determining a course of action to take. If it is determined that the person should be placed on administrative leave and escorted from the premises, we assist Human Resource in that process.
Sage provides a calming influence to the investigation and assists the attorneys by interfacing with the client as necessary in order to shed light on the truth. Sage remains objective in its gathering of evidence and testimony and reports the good, the bad, and the ugly to the attorneys.
Based on our skills, knowledge, education, experience, and training, Sage is able to walk the client through difficult times and prevent business failures and divorces that occasionally result from investigations by various federal agencies.
If your client requires a steady, knowledgeable firm to shepherd them through the difficult terrain of defending white collar crimes including income tax, money laundering, bank fraud, security fraud, wire fraud, and mail fraud, please contact Sage Investigations, LLC and Chief Investigator, Edmond Martin at 512-659-3179. Let our 26+ years as an IRS Special Agent, former IRS agents, and CPA’s guide you and your client.
