Initial Checklist when Responding to the Government's Investigation

Pages9-31
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CHAPTER 2
INITIAL CHECKLIST WHEN RESPONDING
TO THE GOVERNMENT’S INVESTIGATION
The Antitrust Division (Division) of the U.S. Department of Justice
is sophisticated and aggressive in conducting criminal investigations.
The Division uses myriad tools including the grand jury, covert
monitoring, unannounced interviews, and search warrants.
Counsel may learn of an investigation in a number of different ways.
For instance, counsel may first learn of an investigation as a result of a
search warrant or may hear rumors that a particular industry is under
investigation. Other investigations commence with the issuance of grand
jury document subpoenas. No matter how the investigation is disclosed,
there are a number of issues that should be addressed as soon as co unsel
learns its client may be under investigation.
This chapter provides a checklist of topics for defense counsel to
consider for the initial meeting with the company’s representatives. That
first meeting is exceedingly important. Although senior management
and in-house counsel may have a great deal of experience in handling
litigation, the prospect of a criminal investigation, and all that it entails,
may be a new and sobering experience. Counsel should provide
information to alleviate the worst fears, but, at the same time, note the
possibility of a criminal prosecution and consequences to the company.
A. General Considerations How Deep Is This Going to Get?
It is important for management to understand the full scope of the
problem. There are many interrelated issues, and appropriate decisions
cannot be made if not viewed in their proper context.
1. Statutory Basis for Criminal Prosecution
Theoretically, every violation of Section 1 of the Sherman Act1 can
be prosecuted criminally. Practically, however, the government uses th e
criminal process to pursue only suspected “hard core” antitrust
violations. These include agreements among competitors related to price
1. 15 U.S.C. § 1.
Antitrust Grand Jury Investigations Handbook
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fixing, bid rigging, customer allocations, or production limitations.2 In
recent years, the Division has also begun prosecuting agreements among
competing employers to fix wages or not to solicit, or “poach,” each
other’s employees as criminal violations.3 In most cases, the government
will be investigating activity that would constitute a per se violation of
the Sherman Act.
In 2022, the Division obtained a guilty plea from an individual who
proposed a market allocation agreement with a competitor.4 Becau se the
competitor declined the offer, however, there was no agreement to
prosecute under Section 1. Instead, the Division charged the individual
with attempting to monopolize the relevant market under Section 2 of the
Sherman Act.5 The Division had previously brought criminal charges
against corporations and individuals under Section 2, but had not done so
for many years.6
This does not mean, however, that the Division’s investigations and
prosecutions are limited to violations of the Sherman Act. The Division
regularly alleges violations of the mail fraud7 or wire fraud8 statutes, and
occasionally has charged a violation of the Racketeer Influenced and
Corrupt Organizations Act,9 tax laws, 10 or other statutes.
2. See U.S. Dep’t of Justice, Antitrust Division Manual III-12 (5th ed. 2017)
[hereinafter DIVISION MANUAL]. At the time of publication, the Division
Manual was undergoing revision.
3. See, e.g., Indictment, United States v. Neerah Jindal and John Rodgers,
No. 4:20-CR-358 (E.D. Tex. Apr. 15, 2021); Indictment, United States v.
Surgical Care Affiliates, LLC, et al. (N.D. Tex. Jan. 5, 2021). See
generally U.S. Dep’t of Justice and Federal Trade Comm’n , Antitrust
Guidance for Human Resource Professionals (Oct. 2016), ava ilable at
https://www.justice.gov/atr/file/903511/download.
4. Plea Agreement, United States v. Nathan Nephi Zito, No. 22-113-BLG-
SPW (D. Mont., Sept. 19, 2022).
5. Information, United States v. Nathan Nephi Zito, No. 22-113-BLG-SPW
(D. Mont., Sept. 19, 2022).
6. E.g., United States v. Braniff Airways, Inc., 453 F.Supp. 724 (W.D. Tex.
1978); United States v. Dunham Concrete Prods., Inc., 475 F.2d 1241
(5th Cir. 1973).
7. 18 U.S.C. § 1341.
8. Id. § 1343.
9. Id. §§ 19611968.
10. 18 U.S.C. § 371.

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