Saturday, March 31, 2007

That's What a Subpoena Is For

Every once in a while a line in a company's discussion of a government investigation catches your eye when it appears to miss the point.  Beazer Homes USA is facing a government investigation of its mortgage lending practices, as discussed in a prior post (here).  On March 29, the company filed an 8-K(here) about the investigation, after the media stories first reported the FBI's confirmation of the investigation, that states, "The Company has received a grand jury subpoena from the United States Attorney’s Office in the Western District of North Carolina seeking the production of documents.  The subpoena was issued upon application of the Office of Housing and Urban Development, Office of Inspector General and focuses on the Company’s mortgage origination services.  The Company has not received a request for information or documents from the FBI or IRS in this regard. (Italics added)  Of course, a grand jury subpoena means the FBI is going to get the documents, and it does not have to "request" any information because the subpoena requires Beazer to provide it.  Similarly, if there is a criminal tax investigation, then the IRS can't ask for documents, or even issue a summons, because the case is now in the exclusive jurisdiction of the Department of Justice.  Once the grand jury subpoena arrives, rest assured that a federal investigative agency will be looking at the materials provided for any potential criminal violations -- they don't even need to say "Please" any more. (ph)

Grand Jury, Investigations | Permalink

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