Questions You Should Ask When You Hire A Criminal Tax Attorney?

As a federal criminal investigator, part of the job was conduct an initial interview of the subject of a criminal investigation.  Most of the time, this was a cold call, whereby another special agent and I would find the right time and place to give the subject the news that we are looking into whether or not to recommend prosecution.  Because IRS has sole jurisdiction in criminal tax violations, the investigation most likely involved tax crimes.  I would explain why there is an investigation and the process so they would know what to expect.  This wasn’t an audit but a serious matter that they needed to address.  Invariably, they would ask “Do I need an attorney?”  My answer would be “yes.”  And their second question would be “I don’t even know who to ask.  Who do you recommend?”  I, of course, knew many good attorneys, but I couldn’t recommend any particular attorney.  Instead, I told them that my recommended method was sound but not foolproof.  If they found an attorney that could say “yes” to the following questions, they could be comfortable in their choice:

Has The Attorney Worked With The Special Agent Before?

Criminal tax investigations are a specialized niche in the world of white-collar crimes.  In some cases, the subject who never asked me for a recommendation would hire a civil attorney which would drive me crazy because criminal tax investigations are a different world than civil litigation.  Every… single…. time…., the civil attorney was replaced with a criminal tax attorney, after many months of frankly wasting the investigator’s time, but that is a topic for a different blog post.  Because criminal tax violations are a niche, there are very few criminal tax attorneys practicing in federal court.  It is a small world in that space.  Either the agent sees them in court, hears about them in the office, or knows them personally because the agent is in contact with them throughout your career.  Either way, they are a known commodity.  Within a few years, every IRS special agent could tell you who the criminal tax attorneys are that practice in their local federal courthouse.

Does The Attorney Know The Federal Prosecutor By Name?

Just like criminal tax attorneys, the number of federal prosecutors who specialize in criminal tax violations are also a niche.  I have found that without a doubt a good relationship with the federal prosecutor goes a long way.  The level of respect between prosecution and defense pays dividends for the defendant.  There isn’t any gamesmanship, bravado and insulting rhetoric.  Just a casual conversation, sometimes spirited, but never insulting.  Prosecutors expect defense attorneys to push back; that is what they get paid for.  Both sides are looking for a reasonable resolution.  If they can’t agree on points of law or the weight of the evidence, then they can fight it out in court.  Sometimes minds can be changed after some thought is given over a period of time.  If a criminal defense attorney knows the federal prosecutor by name and knows the name of the prosecutor’s spouse and kids, then that is a good sign.  Prosecutors who don’t like particular defense attorneys aren’t amiable to sharing other details of their lives.  It takes years to build a relationship.

Does the Attorney Know The Location Of The Courthouse Restrooms?

If an defense attorney knows where all the restrooms are at, that is also a good sign. It tells you that they are experienced, know the temperament of the judges, probably know the judges’ clerks by first name, and know where the courtrooms are located.  The attorney has been around long enough to get comfortable in the courtroom, and believe me it shows.  Also federal judges are respectful to all attorneys, but there is a level of comfort for the face they know versus the face they don’t know.  It is just human nature, and it cuts both ways.  I’ve seen attorneys who don’t have great reputations to try to be “cute” in their arguments, only to hurt their client even more.  Those impressions in court do linger.

Three Questions For Every Forensic Accounting Engagement

Forensic accountants can help in many different areas for financial investigations.  But there are three main questions that need to be asked before any engagement with the client can start.  No matter if a lawyer is hiring or a victim of an embezzlement is hiring, it is a matter of expectations and making sure that the client and forensic accountant are understanding each other.  There is a saying “To be unclear is to be unkind.”  Not understanding each other or making assumptions can hurt relationships and end up with hurt feelings or a lawsuit about not meeting expectations.

What Are You Trying To Accomplish?

If you drive your vehicle into a repair shop, you tell them what the problem is.  They are hired to fix it.  You know what your are trying to accomplish.  Most of the time, the broken part can be found and replaced.  This is a normal business practice.  This is no different than hiring a forensic accountant.  If you are trying to get the business out of the hands of the majority partner by going to court, you may hire a forensic accountant to prove that the majority shareholder is stealing money from the business.  The goal is known and the forensic accountant can help understand what you are asking them to do.  Depending on the facts of the investigation, is the goal to have a court appointed receivership, or are you wanting a criminal prosecution?  Maybe you only want enough information to confront the majority shareholder.  Either way, the level of service is going to depend on what you are trying to accomplish.

Where Are The Records?

Without records, there is no investigation.  A few times in my prior law enforcement career, the prosecutor’s office didn’t want to either a) get the bank records because it may be too expensive, or b) didn’t want fight the defendant’s legal counsel in compelling the defendant to produce corporate records.  Either way, if no records exist or the client doesn’t want to pay for getting records, then there is no investigation to be conducted.  It is like conducting a murder investigation without a body.  Who did it?  Where did it happen?  How did it happen? How long did it happen?  These questions have to be answered.  Without records, the forensic accountant has nothing to analyze.

What Is Your Budget?

One complaint that defense attorneys often make is that their client don’t have deep pockets to pay for every possible expert to help defend their client.  On the other hand, the government can add a brigade of agents to a case and have them travel around the world to get witnesses to come to court.  Sometimes, the government will pick up witnesses in government vehicles to ensure that the witness gets to court on time.  In over 20 years as a criminal investigator, I drove many witnesses back and forth to court for various reasons.  Sometimes the prosecutor didn’t trust the witness to be responsible to show up on time.  Other times, the witness didn’t have reliable transportation to get to court.  The defense really didn’t have the luxury of a taxi service.  The defense had to rely on their witnesses to be responsible and have adequate transportation.  A budget is a constraint that almost everyone has, except for the government.

In every forensic accounting engagement, a budget needs to be discussed because hiring a forensic accountant can be expensive.  To keep expectations in line with the client’s budget, the engagement may need to be completed in phases.  For example, reviewing bank statements, researching property transactions, and analyzing the corporate records can be completed in phase one.  This gives the forensic accountant and the client a general overview of how the scheme may have happened.  Once it is completed, the forensic accountant can determine the next logical steps and give an estimate of what phase two may entail.  Think of a forensic investigation as peeling an onion.  After the first layer is peeled back, then another layer has to be analyzed.  There is a cost versus benefit analysis for each phase of the examination.

Sometimes, the engagement can be charged by the hour.  Some forensic accountants are willing to perform a service for a flat fee.  Myself, I like to conduct a forensic accounting engagement in phases with a flat fee for each phase because it helps the client limit the monetary uncertainty of the engagement.