Staying ahead of allegations of misconduct—including violations of the Foreign Corrupt Practices Act FCPA , the False Claims Act, and other provisions covering fraud and abuse—can ward off a host of issues including workplace disruptions, negative press, and even large fines or prison time.
With stakes this high, companies and individuals must be proactive in both preventing misconduct and promptly responding to credible allegations of wrongdoing when they arise. Our attorneys help clients swiftly handle white collar criminal issues, internal investigations, crisis management responses, and litigation related to the False Claims Act and other regulations.
We Don't Need No Stinking Warrant: The Disturbing, Unchecked Rise of the Administrative Subpoena
At every turn, we work to minimize liability and maximize discretion, ideally through negotiated settlements and, when necessary, at trial. Drawing upon years of experience in white collar defense, securities litigation, corporate compliance, and fraud prevention, our team provides peace of mind through the deft handling of internal investigations and responding to inquiries from federal and state enforcement.
Should matters escalate, we guide clients through settlement or trial, including in multimillion-dollar civil fraud actions and white collar criminal prosecutions. Our attorneys represent companies—large and small, public and private—as well as their officers, directors, and other individuals across industries, including pharmaceutical, technology, chemical, healthcare, automotive, retail, financial services, insurance, higher education, and accounting. Karen Bitar quoted in Business Insurance. Karen Bitar quoted in the Wall Street Journal.
See 42 U. As Congress failed to meet its statutory deadline, the Secretary of Health and Human Services HHS promulgated a regulation, which is scheduled to take effect on April 14, Under this regulation, no disclosure of patient health information may be made by health care providers or other covered entities or their associates unless the patient authorizes it, the disclosure is required by law, or the disclosure is specifically permitted by the rule. A disclosure is considered "required by law" when the disclosure "complies with and is limited to the relevant requirements of such law.
The regulation recognizes that there may be occasions when law enforcement organizations perform health oversight activities, thereby increasing the need for access to protected health information. Entities subject to the requirements of the final rule include: 1 health care providers, 2 health plans, 3 health clearinghouses 82 and 4 business associates of these entities who assist with their performance, including lawyers and consultants.
In addition, the ECPA authorizes an agency to seek a court order prohibiting an electronic service provider from notifying a user of the existence or compliance with an administrative subpoena. The Fair Credit Reporting Act generally limits permissible disclosures of consumer reports by consumer reporting agencies. While consumer reporting agencies are authorized to disclose consumer reports in response to grand jury subpoena requests or court order, consumer reporting agencies may not disclose such reports in response to administrative subpoena requests.
Consumer reporting agencies and their agents are prohibited from disclosing to third parties any information that would alert them to the fact that the FBI had requested such information. The Cable Act requires prior subscriber consent for any disclosure of personally identifiable information from a cable provider except in the instance of a court order for production of the information.
Disclosure of tax return information accessed through administrative subpoenas is limited by 26 U. Disclosing non-taxpayer information in a manner prohibited by 26 U. Entities responding to subpoena requests, however, are exempt from the general prohibition. In addition, 20 U. Federal courts have held that FERPA does not provide a private right of action against an entity seeking educational records, however, as the statute only authorizes the Secretary of Education or an adminstrative head of an education agency to take appropriate actions to enforce the provisions of FERPA.
In addition, at least one federal court has held that FERPA prohibits the disclosure but not the act of accessing such records.
Permissible disclosure in other circumstances, including, presumably, in response to an administrative subpoena request, is limited to include only the names and addresses of subscribers. Intra-agency Regulations, Guidelines, and Directives. See Appendices A, B, and C for references to intra-agency regulations, guidelines and directives related to administrative subpoena issuance.
Brief descriptions of such regulations and guidelines are included in the appendices where provided by the agency holding the subpoena authority. In addition to being governed by statutory issuance standards, agencies issuing administrative subpoenas are also governed by internal agency regulations and guidelines.
PDF Administrative Subpoenas in Criminal Investigations: A Sketch
Most agencies holding statutory administrative subpoena authorities have a structured system of issuance in place, requiring pre-approval from various agency officials as to the legality of issuance based on scope, necessity, and other considerations. The Inspector General Act has since been amended multiple times to create an Office of Inspector General within most federal agencies and other entities.
Inspectors General are intended to function independent of the agency head. They are appointed by the President, subject to the advice and consent of the Senate, and removeable only by the President. In order to fulfill their investigative responsibilities, Inspectors General are authorized to exercise certain administrative subpoena authority. Federal courts have generally stated that Inspectors General hold broad investigative authority 90 to carry out their responsibilities of promoting efficiency and preventing fraud, waste, abuse, and mismanagement in federal government programs.
Inspectors General are authorized to exercise administrative subpoena authority to obtain information required for administrative, civil and criminal investigation. An Inspector General is required by statute to report to the Attorney General any discovery of grounds to believe that a violation of federal law has occurred. Inspector General administrative subpoena authority has been upheld by federal courts even in situations where the Inspector General is cooperating with divisions of the Justice Department exercising criminal prosecutorial authority where there are reasonable grounds to believe a violation of federal criminal law has occurred.
The Inspector General Act solely authorizes subpoena duces tecum , or documentary requests.
See 28 U. Federal courts have enforced Inspector General administrative subpoenas where 1 the subpoena is within the statutory authority of the agency; 2 the information sought is reasonably relevant to the inquiry; 96 and 3 the demand is not unreasonably broad or burdensome. The Inspector General Act contains no internal privacy protections directed specifically at the subpoena authority provided in the Act.
Inspector General subpoena authority is also subject to the same general statutory privacy-protective requirements applicable to other agency subpoena authorities. These privacy-protective statutes are listed and described supra in section II. Agency guidelines implementing these privacy-protective statutes are generally applicable to the Inspector General subpoena authority as well as other subpoena authorities exercised by an agency. Federal courts have held that the enforceability of an Inspector General administrative subpoena authority is subject to many of the limitations imposed on other administrative subpoena authorities, including the requirements that such a subpoena: 1 be issued for a lawful purpose within the statutory authority of the Inspector General Act, 2 be reasonably relevant to that purpose, and 3 not be unduly burdensome.
In addition to these generally applicable requirements, the Offices of Inspector General in specific agencies have established and published specific intra-agency policies governing requests for and issuance of Inspector General administrative subpoenas. Administrative subpoenas have proved an effective resource in the investigation and prosecution of federal health care offenses.
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The administrative subpoena authority for the Attorney General as enacted in 18 U. Health care fraud administrative subpoenas facilitate a more efficient and expeditious coordinated approach to the investigation of federal criminal health care fraud offenses. First, unlike grand jury subpoenas, the evidence produced in a criminal investigation in response to such a subpoena can be shared with attorneys in the Civil Division of the Department of Justice. This enables the government to pursue parallel criminal and civil relief simultaneously and to resolve these matters in a coordinated and timely fashion.
The early global resolution of all pending civil and criminal exposure is considered of great importance by many targets of health care fraud investigations who find a benefit in a relatively swift resolution which permits them to put the episode behind them and begin with a fresh start.
Also, the sharing of information allowed with the use of administrative subpoenas eliminates the need of the government to otherwise serve two sets of subpoenas, one criminal and one civil, in each health care fraud investigation, and similarly avoids cost and expense which would otherwise be imposed if two sets of the same documents had to be produced.
Finally, the civil investigation does not have to be suspended pending resolution of the criminal case when information can be shared as the investigation proceeds. Source and Scope of Subpoena Authority under 18 U. In evaluating the scope of an administrative subpoena issued under 18 U.
Applicable Subpoena Enforcement Mechanisms.
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In cases of refusal to comply with a subpoena, the Attorney General is authorized to seek the aid of a United States district court where the investigation is occurring or where the subpoenaed person resides. See Section II. In addition to extrinsic statutory limitations, 18 U. At any time before the return date specified for subpoenaed information, for instance, the person or entity subpoenaed may petition for an order modifying or quashing the summons or modifying any court nondisclosure order acquired by the government.
See 18 U. Federal courts have determined that the authority granted under 18 U. While section contains no requirement that patients be notified of impending subpoena of their health records, the subsequent use and disclosure of information gathered through compliance with such a subpoena is limited under the statute. While the statute does not generally prohibit a governmental entity from notifying a person or entity of the disclosure of records under section , a district court in which the subpoena is or will be served may issue an ex parte order prohibiting a person or entity from disclosing to any other person or entity except in the course of obtaining legal advice from an attorney the existence of a subpoena served under this section for ninety days.
This ex parte order of nondisclosure may be extended for additional periods of up to ninety days only upon a showing that the conditions recounted above still exist. In evaluating subpoenas issued under 18 U. Standards Governing the Issuance of Administrative Subpoenas. During calendar year , United States Attorneys offices issued a total of 2, administrative subpoenas in investigations related to health care offenses pursuant to 18 U. The Assistant Attorney General for the Criminal Division is also authorized to issue subpoenas under this authority but issued no such subpoenas during calendar year In addition, the use of an administrative subpoena provides a mechanism for information sharing between the FBI, HHS, and other law enforcement agencies as well as the Civil Division of the Department of Justice.
Therefore, documents and records obtained under the administrative subpoena can be utilized both in a civil investigation and a criminal investigation stemming from the same fraudulent scheme. Should the statutory authority provided in 18 U.
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A grand jury subpoena remains an option in such investigations, however, and is sometimes utilized when confidentiality is important to the development of the case. Section authority has been used in notable health care fraud investigations conducted by the FBI to obtain records and documents in major U. The incriminating information obtained via an administrative subpoena in these investigations could have been obtained by grand jury subpoena.
However, because an administrative subpoena can be obtained more quickly and its use avoids the Fed. For example, information obtained by administrative subpoena in such investigations may be used not only for criminal prosecution purposes, but also for negotiating a civil settlement. As Congress recognized in authorizing subpoena authority for investigations relating to health care fraud and abuse in 18 U.