Government Contractors: What to Do When Under Investigation

Government contractors are businesses in the private sector who offer their services to select departments, often at a federal level. Receiving a government contract can be a serious boon for a company's prospects, but they need to make sure to follow the laws regarding contracts. These are some of the things to look out for if you're undergoing investigation as a government contractor.

What Warrants an Investigation?

The history of corruption with government contractors means that law enforcement officers need to keep tabs on those working with the government. Just having a contract isn't grounds for investigation, but suspicious activity can be sussed out with minimal difficulty by experienced law enforcement officials. A government contract contains information that all parties need to recognize as true in order for it to be valid. If there's information that you present as truthful when it's fraudulent, such as forged licensure, you could be facing charges of fraud.

Common Reasons for Government Contractor Investigations

Type of Violation	Examples	Potential Charges
Fraudulent Information	Forged licensure, false credentials, misleading claims	Fraud charges
Bribery	Bribing government officials to secure contracts	Federal bribery and corruption charges
Sanctions Violations	Working with restricted nations, violating U.S. sanctions	Federal sanctions violations
False Documents	Presenting forged or altered documents to government	Document fraud, federal fraud charges
Misleading Claims	Misrepresenting capabilities, experience, or qualifications	Contract fraud

How Do Government Contractors Find Themselves Under Investigation?

Government contractors often find themselves under investigation not for what they do while under contract but what they do to gain the contracts. Because of the ruthless competition to gain government contracts, businesses may try shady tactics to weed out their competition or to curry favor with the government officials awarding the contracts. In addition to presenting false documents and making misleading claims, a potential government contractor might try to bribe a government figure to secure a contract. Acceptance of the bribe could result in prosecution for the government figure as well.

Tactics That Trigger Investigations

• Presenting false documents to government agencies
• Making misleading claims about qualifications or capabilities
• Bribing government officials to secure contracts
• Using shady tactics to eliminate competition
• Misrepresenting business credentials or licensure

Working with Restricted Nations

Being a government contractor means being entrusted with certain privileges. You may consider providing your services to other nations, but you need to ensure that you're not working with any nation that is explicitly restricted from doing business with the United States. This can include nations that are undergoing sanctions from the United States. If you're unsure about whether it's legal to do business with a country, consult with any trustworthy government officials.

Understanding Sanctions Violations

What You Need to Know	Why It Matters
Restricted Nations	Cannot do business with nations explicitly restricted by U.S.
Sanctions Programs	Some nations are under U.S. sanctions - working with them is illegal
Verify Before Acting	Check with OFAC or government officials before doing international business
Severe Consequences	Violations can lead to contract suspension and criminal prosecution

Consequences for Violating a Government Contract

Being found in violation of federal, state or local laws as a government contractor could lead to the indefinite suspension of your business with the government. This could mean a loss of work for those who were hired as part of the project who had no part in the corruption, such as construction workers. You can also face prosecution for misleading the government or any other illegal acts.

Potential Consequences

Consequence	Impact
Indefinite Suspension	Your business can no longer work with the government
Criminal Prosecution	Face federal charges for fraud, bribery, or other violations
Loss of Work	Employees and subcontractors lose work and income
Financial Penalties	Fines, restitution, and legal fees
Reputation Damage	Business reputation destroyed, difficulty securing future contracts
Debarment	Permanent prohibition from government contracting

How to Know If You're Being Investigated

Even if you haven't been charged with a crime as a government contractor, you may be under investigation. Being confronted by law enforcement regarding your business dealings is a sure sign of an investigation. Be careful about answering any question, as you might end up unwittingly incriminating yourself. Your right to remain silent is very important during an investigation.

Warning Signs You're Under Investigation

Warning Sign	What to Do
Confronted by Law Enforcement	Exercise your right to remain silent; contact attorney immediately
Questions About Business Dealings	Don't answer without attorney present
Subpoenas for Documents	Contact legal representation before responding
Interviews with Employees	Alert your legal team immediately
Audit of Records	May indicate investigation; consult attorney

CRITICAL: Be careful about answering any question, as you might end up unwittingly incriminating yourself.

Finding a Lawyer

You need to get in touch with legal representation as soon as possible. If you have a legal team, discuss your options with them as soon as possible. They will advise you with how best to proceed through the rest of the investigation. You want to be as prepared as possible for any prosecution. You need legal counsel that's experienced with fighting cases on behalf of government contractors. A desirable lawyer will review your case thoroughly and locate any flaws in the case against you. The best way to thank them for their service is to get all the necessary documentation in order promptly.

What to Look for in a Government Contractor Defense Attorney

Quality	Why It Matters
Experience with Government Contractors	Attorney understands specific laws and regulations affecting contractors
Thorough Case Review	Will review your case and locate flaws in government's case
Federal Criminal Defense Experience	Knows how to handle fraud, bribery, and sanctions violations
Immediate Availability	Can respond quickly to protect your rights during investigation
Strategic Defense Planning	Advises how best to proceed through investigation and potential prosecution

How to Prepare for Working with Your Attorney

• Get all necessary documentation in order promptly
• Gather all contracts, correspondence, and business records
• Create timeline of events related to investigation
• List all government officials you've worked with
• Document any international business dealings
• Be completely honest with your legal team

Your Rights During an Investigation

Even if you haven't been charged with a crime as a government contractor, you may be under investigation. Your right to remain silent is very important during an investigation. Being confronted by law enforcement regarding your business dealings is a sure sign of an investigation. Be careful about answering any question, as you might end up unwittingly incriminating yourself.

Critical Rights to Remember

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• Right to Remain Silent: You don't have to answer questions from law enforcement
• Right to Legal Counsel: You can and should contact an attorney immediately
• Right Against Self-Incrimination: Anything you say can be used against you
• Right to Refuse Searches: Without warrant, you can refuse consent to search

Steps to Take If You're Under Investigation

Step	Action	Priority
1	DO NOT SPEAK to law enforcement without attorney	CRITICAL
2	Exercise right to remain silent	CRITICAL
3	Contact experienced attorney immediately	CRITICAL
4	Gather all documentation related to contracts	High
5	Review all business dealings with foreign nations	High
6	Don't discuss case with anyone except attorney	High
7	Follow attorney's advice on how to proceed	Ongoing

Understanding Government Contract Fraud

A government contract contains information that all parties need to recognize as true in order for it to be valid. If there's information that you present as truthful when it's fraudulent, such as forged licensure, you could be facing charges of fraud. The history of corruption with government contractors means that law enforcement officers need to keep tabs on those working with the government.

Why Investigation Happens Before Contract Work

Government contractors often find themselves under investigation not for what they do while under contract but what they do to gain the contracts. Because of the ruthless competition to gain government contracts, businesses may try shady tactics to weed out their competition or to curry favor with the government officials awarding the contracts. This is why bribery and fraudulent documents are common triggers for investigations.

The Impact on Your Business and Employees

Being found in violation of federal, state or local laws as a government contractor could lead to the indefinite suspension of your business with the government. This could mean a loss of work for those who were hired as part of the project who had no part in the corruption, such as construction workers. The ramifications extend beyond just the business owner to affect employees, subcontractors, and their families.

Staying Compliant as a Government Contractor

Becoming a government contractor can help launch your company to new peaks, but being caught up in a criminal investigation can lead to all sorts of problems that are difficult to untangle yourself from. If you believe or learn that you're under investigation, make sure that you consult with your lawyer. You want to stay abreast of the law and be in full compliance of it.

Best Practices for Compliance

• Ensure all information in contracts is truthful and accurate
• Never present forged or fraudulent documents
• Don't engage in bribery to secure contracts
• Verify all international business dealings comply with U.S. sanctions
• Maintain transparent and honest business practices
• Keep thorough documentation of all business transactions
• Consult with legal counsel before making questionable decisions

Key Takeaways for Government Contractors

• Just having a contract isn't grounds for investigation, but suspicious activity triggers scrutiny
• Fraudulent information like forged licensure leads to fraud charges
• Investigations often focus on how contracts were obtained, not just contract performance
• Bribing government officials can result in prosecution for both parties
• Working with nations under U.S. sanctions is illegal
• Violations can lead to indefinite suspension from government contracting
• Being confronted by law enforcement is a sure sign of investigation
• Exercise your right to remain silent - don't incriminate yourself
• Contact experienced legal representation immediately
• You need an attorney experienced with government contractor cases

Protect Your Business: Act Immediately

If you believe or learn that you're under investigation, make sure that you consult with your lawyer. You need to get in touch with legal representation as soon as possible. If you have a legal team, discuss your options with them as soon as possible. They will advise you with how best to proceed through the rest of the investigation. Being caught up in a criminal investigation can lead to all sorts of problems that are difficult to untangle yourself from, so immediate action is essential.