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Posted by on Jun 13, 2017 in Featured, Grand Jury Subpoena

I own and manage a non-profit organization.  Can non-profits be subpoenaed?

Yes. Non-profit organizations have no special, protected status under the law. Non-profit organizations are no different than for-profit organizations or any other type of entity for that matter (partnerships, trusts, labor organizations and so on) in terms of being subject to process. Non-profits organizations and their officials are therefore subject to grand jury subpoenas, inspector general subpoenas, third-party subpoenas and summonses. They may be sued civilly and may be charged with a criminal offense  Their records are subject to subpoena and, upon approval by a court or magistrate judge, law enforcement officials may enter the premises of a non-profit organization to search for and seize records as specified in a search warrant.

A federal grand jury subpoena duces tecum (for records) is not civil or administrative in nature. It indicates that a criminal investigation is underway. The investigation may have been underway for some time or may have just started. Federal grand juries act under the direction or guidance of a Department of Justice attorney, often an Assistant U.S. Attorney.

Sometimes, a grand jury or inspector general subpoena is served contemporaneously with the execution of a search warrant.  This is done for the purpose of ensuring that any records overlooked during the search or being stored off site are nevertheless produced. A search warrant may only be issued upon a determination by a neutral judge or magistrate of “probable cause” to believe that physical items, photographs or documents (in digital or hardcopy form) relevant to a crime exist at the location to be searched. We recommend that you immediately notify counsel if the organization finds itself in this situation. There are very few reasons to consent to an interview or to speak freely to the agents during a search.I It may be   contrary to your interests. Any attempt to interfere with law enforcement officials during a search is likely to result in arrest and prosecution for obstruction of justice or a similar offense.

Retaining experienced counsel at this point is imperative.A Federal agents may take advantage the need to serve the subpoena upon an official of an organization by using the visit as an “excuse” to interview a person. Many people are happy to agree to speak and provide important details about the corporate operations and details that management may prefer not be disclosed. In addition to compulsory process, such as a grand jury subpoena, a non-profit may also receive a voluntary request from the government to produce records. (Inasmuch as, in that circumstance, compliance is not commanded, you may refuse to produce any of the records demanded, although the government is likely then to obtain compulsory process to compel compliance.)

Obviously, a critical component of the decision whether to comply with a voluntary request or, instead, to insist upon formal process is whether the organization is a subject of the investigation or merely a “witness.” If the latter, the organization’s decision to cooperate is clearly less difficult, as “witness” status indicates that the government views the organization as having information relevant to its investigation, but does not have any current intention to charge it with a criminal offense (although this does not amount to a guarantee that no charge will be brought, particularly if the organization’s role in the offense is determined to be greater than initially believed).

A non-profit organization should operate within clear and concise protocols and strict administrative controls, protocols that are adequate to document and fully support its operations. Among those protocols will be a well-crafted document retention policy.