Firrea is not just a penalty provision, however, because it also authorizes the Justice Department to pursue civil investigations into potential violations. Rather than just using it as a backstop when evidence might be insufficient to support criminal charges, the subpoenas to G.M. Financial and Santander Consumer indicate that the government is using Firrea as a new means to police the financial markets.
Crimes are typically investigated by a grand jury, which can compel the production of evidence and testimony from witnesses. The civil investigatory power is nearly as broad, with the Justice Department authorized to issue subpoenas to “summon witnesses and require the production of any books” or other evidence from any place in the United States. Unlike a grand jury investigation, in which federal prosecutors generally do not call a subject to testify, a civil inquiry can include requiring someone involved in possible misconduct to appear for questioning. A witness can invoke the Fifth Amendment right against self-incrimination in response to questions, but that can be considered as evidence if a civil case is filed and goes to trial.
Just because the Justice Department issues subpoenas as part of a civil investigation does not necessarily preclude a parallel criminal investigation. Any evidence gathered pursuant to Firrea can be shared with criminal prosecutors, unlike the secrecy rule imposed on any material presented to a grand jury. There is a rule of thumb in white-collar cases that if there is any possibility a case could go criminal, defense counsel should assume that it will and protect the client accordingly. So a Firrea investigation can be fraught with danger.
Indeed. At a minimum, the receipt of a FIRREA subpoena should be treated just as seriously as the receipt of a grand jury subpoena — and maybe more so.