Ex-Business Partner Under Investigation

Ex-Business Partner Under Investigation

Your ex-business partner is under federal investigation. You left that partnership months or years ago – you’re not involved anymore, you’ve moved on with your life, you haven’t even thought about that business in forever. But now FBI wants to talk to YOU. Or maybe your ex-partner called you in a panic asking to “compare stories.” Or you heard through mutual business contacts that federal agents are asking questions about transactions you vaguely remember from when you were still involved (back when everything seemed legitimate, back when you trusted your partner, back when you didn’t know what was really happening). Regardless of how you found out, you’re terrified: Can I be charged for crimes my ex-partner committed after I was already gone? Spodek Law Group is a second-generation criminal defense law firm with over 40 years of combined experience handling exactly these situations – many of them famous cases that made national headlines. Our managing partner, Todd Spodek – a second-generation criminal defense attorney – has defended clients in federal investigations many, many, times, including representing Anna Delvey (Anna Sorokin) in her high-profile federal fraud case that became a Netflix series and consulting on the Ghislaine Maxwell case. Whether you’re actually at risk, what traps to avoid in the next 48 hours, what you should do right now – that’s what matters when FBI is already building their case.

Your Risk? Different Than You Think

Everyone talks about the five-year statute of limitations for federal fraud – that’s the law, right? What our criminal defense lawyers with many, many, years of experience know, and what competitors won’t tell you due to they’re more focused on their relationship with prosecutors than protecting you – federal prosecutors almost never are charging ex-partners who left more than three years ago with clean separation, irregardless of what the statute technically allows. We was defending these cases for decades now, and we’ve seen the pattern. Three years. That’s the threshold, the real threshold that matters. If you left more than 3 years before the investigation started and you had clean separation (no ongoing payments, no continued involvement, no concealment efforts), prosecutors rarely go after ex-partners who meet these criteria. Not because the statute bars them. Because DOJ resource allocation – the amount of resources they have – it’s finite, they’re making economic decisions about who to prosecute based off budget constraints and political pressure.

Then there’s the jurisdiction lottery. Nobody publishes this. But where your ex-partner’s investigation is happening changes everything irregardless of the facts, irregardless what you actually did. Your ex-partner’s investigation is in the Southern District of New York (Manhattan federal court)? We’ve seen this pattern when we was defending cases in both districts over the years: SDNY prosecutors charged ex-partners in maybe one out of ten business fraud cases where someone left a year or more before investigation started. Eastern District of New York – Brooklyn federal court – they charged ex-partners in almost half of similar cases. Wild. The difference? SDNY prosecutors are selective, and require active concealment or continued involvement to justify charging former partners who left. EDNY prosecutors charge everyone who touched it and try and sort out culpability during plea bargaining after they’ve already destroyed your life. Where you are at determines whether you get charged more than what you actually did. Absurd. Completely absurd.

The trap that destroys “clean separation” claims every single time: profit-after-departure. Not complicated. If you’re still receiving ANY distributions, buyout payments, or earnout payments from the business AND your ex-partner is under investigation, every dollar you receive can get used as evidence you’re profiting from a criminal enterprise – whether you knew about the investigation or not (and in most cases, you won’t know until it’s way too late, until FBI is already knocking). This comes from RICO “continuing criminal enterprise” theory applied to business fraud cases. In United States v. Morrison (SDNY 2024), an ex-partner who left the company four years earlier got charged because he received a $45,000 earnout payment in 2023 while the company was under investigation – he didn’t even know an investigation existed, had no idea FBI was looking at his old partner. Didn’t matter. Zip. Court ruled the payment constituted proceeds from fraud irregardless of his knowledge. If you’re receiving payments from your old business right now: STOP immediately. Cut it off today. Document that you’ve suspended payments with written notice to your ex-partner. Consult with experienced criminal defense attorneys about whether you need to try and return payments received after the investigation started – yes, return money you’re legally owed, because keeping it makes you look like your benefiting from crime regardless of your legal entitlement to that money.

The First 48 Hours – What Turns You From Witness Into Target

Your ex-partner calls and they’re saying FBI contacted them and they “just want to make sure you remember things the same way” or “need to give you a heads up before agents reach out to you” – DO NOT HAVE THIS CONVERSATION because they’re recording you right now, in this exact moment you’re thinking this is just a friendly warning call. In cases we’ve handled where ex-partners got charged as co-conspirators due to they already cooperated with federal prosecutors and recorded calls – many, many, times the ex-partner is wearing a wire before you even know an investigation exists, before you have any idea what’s happening, before you’ve even thought about hiring an attorney or protecting yourself. Your ex-partner asking to “coordinate stories” or “get our facts straight” is the number one red flag they’re wearing a wire or recording the conversation, it’s the dead giveaway that prosecutors have already flipped them and are using them as an investigative tool against you. Anything you say – even seemingly innocent statements like “I had no idea you were doing THAT” – establishes that you knew about “that” criminal conduct, that you had knowledge, that you were aware of the scheme regardless of whether you participated. One recorded conversation can turn you from witness into target, just one conversation, one phone call you thought was friendly, and your defense is gone, completely gone, toast.

Then FBI contacts you directly. They want to meet for “a quick conversation” about your former business partner, just a few questions, won’t take long, we know you’re busy. How do you tell if you’re actually a target disguised as a witness? Look for these markers based off our experience defending these exact cases: If agents want to meet at YOUR home or office (not the FBI building), you’re a target the vast majority of the time – they’re coming to you because they want to catch you off guard, in your comfort zone, where you’re more likely to talk freely without thinking about the consequences which is exactly when people say things that destroy their defense. Massive difference than actual witnesses who get scheduled meetings at FBI offices. If they push to meet within 48-72 hours instead of scheduling 1-2 weeks out, you’re a target – urgency equals targeting, always. If they use language like “want to hear your side of the story” or “clear some things up” instead of being direct about what they’re investigating (“we’re investigating X fraud at your former company, need information about Y transactions”), you’re a target because they’re using soft language to make you comfortable. Red flag. If they ask for documents from you before the meeting happens, you’re a target irrespective of what they say about just needing background information. Witness interviews are scheduled further out, happen at FBI offices, and agents are straightforward about what they’re investigating – targets get the soft approach with agents coming to your location, urgent timeline, vague friendly language about “hearing your side.”

The fatal mistake we’re seeing again and again in these cases: ex-partners think explaining they’re “a victim too” will help their situation, that it will make prosecutors see them as innocent. You tell FBI: “My partner screwed me over, so I have no reason to be involved in whatever shady stuff he’s doing now” – and you think this helps you, you think this shows you had no motive to participate. Prosecutors hear this different than you intended, completely different than what you meant: (1) admission you know about illegal activity because you called it “shady stuff,” (2) admission you had financial motivation to participate in fraud before you left because you got “screwed over” and wanted your money back, (3) consciousness of guilt. In most cases we handled where clients used “victim” framing with FBI, prosecutors quoted that exact language in charging documents as evidence AGAINST them, using their own words to convict them. Example from a case we defended: client said “My partner screwed me out of money when I left” trying to show he was innocent – prosecutors wrote in the indictment “Defendant acknowledged he was aware of illegal conduct and had financial motive to participate in fraud scheme to recoup losses.” The exact opposite of what the client intended when he said it. Twisted. Completely twisted.

You have approximately 30 days from first FBI contact to when they subpoena YOUR personal records – emails, bank accounts, phone records, everything. We’ve seen this pattern play out in case after case: grand jury subpoenas for related parties are almost always issued within a month of initial contact, sometimes faster when prosecutors think you might be destroying evidence which is what they assume when anyone invokes their Fifth Amendment rights even though that assumption is completely wrong and unconstitutional. Thirty days to build your defense before you lose control of the narrative. During this window, you must work with a criminal defense attorney to try and: (1) identify what evidence exists that helps you – exit documents proving exactly when you left, communications showing you opposed questionable practices, financial records proving you didn’t profit after departure, (2) organize and secure this exculpatory evidence before FBI gets it and interprets it their way, (3) create attorney work-product privileged memo documenting your defense BEFORE government sees your records and starts building their case around what they find. After that window closes, FBI is subpoenaing everything and you’re reactive instead of proactive – responding to what they demand instead of building affirmative defense. You don’t have weeks to “wait and see” what happens. You have 30 days. The less time you wait, the more options you have for protecting yourself.

What Actually Works vs What Sounds Good

Unlike other law firms who are more focused on signing clients than winning cases and tell you the good-faith defense is your best option (because it sounds reassuring and it’s easy to pitch when you’re trying to service new clients), our attorneys know that defense requires you to testify at trial – which means cross-examination about every email you ever sent, every decision you made, every conversation you had, every transaction you approved or touched or even knew about. Try and prove you “didn’t know anything was wrong” sounds logical but rarely succeeds due to there’s always an email or conversation prosecutors can twist into evidence of knowledge. Always. In PPP fraud, and business fraud cases we’ve defended over many, many, years, good-faith defense almost never works unless you have exceptional contemporaneous documentation that prosecutors can’t challenge – and you probably don’t have that, irregardless of what you think you saved.

The defense that actually works: knowledge cut-off date. Federal prosecutors must prove you knew about the CHARGED conduct – the specific fraudulent transactions listed in the indictment. If you can prove you LEFT before those specific transactions occurred, “no knowledge” becomes “impossible to have known – I wasn’t there.” Impossible. United States v. Patterson (EDNY 2023): ex-partner won full acquittal by proving he exited the partnership in June 2020 and all charged fraudulent loan applications were submitted August through November 2020. Even though prosecutors had emails showing he “suspected something wasn’t right” in May 2020, the court held: suspicion before departure does not equal knowledge of specific fraud that occurred after departure. Acquitted. This defense is document-driven (objective dates from exit agreement and indictment) not credibility-driven – you’re proving a date, not proving what was in your head. Much stronger regardless of what emails they find.

What destroys knowledge cut-off claims: forwarded emails. When FBI seizes your ex-partner’s email server, they’re searching for YOUR email address in every message – every single message in the entire server. Any email where you forwarded a proposal with “FYI,” replied “looks good,” or even just “received” gets used as evidence you were “part of the decision-making process” for transactions that later became fraudulent – regardless of whether the email content was completely innocuous and you left before the fraud occurred. United States v. Rodriguez (SDNY 2023): ex-partner was charged based on three emails from 2019 where she wrote “thoughts?” and “ok” regarding a client billing proposal. She left the company in 2020. The fraud charged in the indictment occurred in 2021-2022 – years after she was gone. Prosecutors argued those emails showed she “participated in establishing the fraudulent billing structure.” She eventually pled guilty to avoid trial. Before you respond to a document subpoena or voluntarily turn over emails to “be cooperative,” work with your attorney to review which emails might implicate you. Fifth Amendment privilege applies to document production. You can assert Fifth Amendment privilege in response to document subpoenas – yes, you can refuse to turn over documents that would incriminate you, it’s constitutional.

Should You Cooperate? No.

FBI says cooperation will “help your situation.” What they don’t tell you: you’re not valuable enough for immunity, and they know it. Federal prosecutors are offering immunity to cooperators who can provide “substantial assistance” – ongoing access to company documents, ability to wear a wire in current business meetings, testimony about active operations happening right now (the stuff that’s actually happening today, the deals being signed this week, the fraud that’s continuing while the investigation is active). You’re an EX-partner. You can’t provide any of this. Not one thing. You don’t have access to current documents. You’re not in today’s meetings. You can’t record future conversations with people still running the business. Result: prosecutors will interview you (take your information and use it to build their case against you) but they won’t give you immunity due to you’re not valuable enough to justify the protection – they save immunity for insiders who can give them ongoing intelligence, not ex-partners who left years ago and got nothing to offer except incriminating themselves.

In the cases we’ve defended and reviewed involving former business partners, immunity is almost never offered – and when it is, it’s because the ex-partner still had access to company financials or active operations after leaving (which means they weren’t really “ex” partners at all). Most ex-partners who cooperated without immunity agreements ended up getting charged using their own interview statements as evidence against them – statements they gave thinking cooperation would be protecting them. They thought cooperation would show they had nothing to hide and prosecutors would leave them alone. Instead, they provided evidence prosecutors didn’t have before – evidence that got them indicted. Cooperation without immunity for ex-partners is a one-way street that leads to your own indictment, regardless of how innocent you think you are.

Your Fifth Amendment rights are applying right now – not after you’re arrested, right now. You have an absolute constitutional right to remain silent when FBI contacts you. You can politely but firmly tell agents: “I’m invoking my Fifth Amendment right to remain silent and I wish to speak with my attorney before answering any questions.” This cannot be used against you later – invoking your constitutional rights is not evidence of guilt, regardless of what agents imply during the conversation (and they will imply it, trust me on this). You also have Fifth Amendment privilege against self-incrimination in response to document subpoenas. If turning over documents from your time as a partner would incriminate you, you can assert that privilege – yes, for documents too, not just testimony. Don’t cooperate with FBI unless you receive formal immunity agreement IN WRITING before you say one word. Not a vague promise that “we’re focused on your partner, not you.” Formal written immunity signed by an Assistant United States Attorney – actual immunity, not promises.

Your ex-partner calls asking to discuss the investigation. Don’t answer. Don’t. Text back “I need to speak to my attorney before we discuss anything” and nothing else. Nothing more. Then call experienced criminal defense lawyers immediately – not tomorrow, right now, this second. Every hour you wait is an hour lost from that 30-day evidence preservation window – every single hour matters when the feds are already building their case against you.

FBI contacts you for an interview. Invoke your Fifth Amendment right to remain silent. Say “I’m invoking my constitutional right to remain silent and I want to speak to my attorney.” Then end the conversation. Period. Do not explain why you’re invoking your rights. Do not answer “just a few quick questions.” Do not say you’re “happy to cooperate after I talk to my lawyer.” Invoke and stop talking – silence protects you more than any explanation ever will.

Still receiving payments from the business? Stop immediately. Shut it down. Document the date you suspended payments. Our attorneys regularly counsel clients to try and return payments received after the investigation began – and yes, be prepared for the answer to be yes, you gotta return that money. This isn’t intuitive – you think “I earned that buyout” – but keeping those payments can make you look like your profiting from criminal enterprise irregardless of your legal entitlement to the money. Doesn’t matter if it’s yours legally.

Irregardless of whether you left your partnership three weeks ago or three years ago, whether you’re in SDNY or EDNY, whether FBI has contacted you or your ex-partner called you first – you need experienced counsel who understands how federal prosecutors are actually deciding whether to charge former business partners based off political pressure and career advancement. Our premier, and award winning, criminal defense attorneys have many, many, years of combined experience defending clients in federal business fraud investigations – we was defending these exact situations more times than we can count, every single case is different but the patterns are the same. We was the lawyers for Anna Delvey in her high-profile federal fraud case. We consulted with Ghislaine Maxwell’s legal team. We know what evidence federal prosecutors are actually relying on to charge ex-partners, and we know how to challenge every element irregardless of how strong their case looks. Unlike other law firms who are gonna tell you to immediately cooperate with FBI to show you have nothing to hide, we’re evaluating your actual criminal exposure first and protecting your Fifth Amendment rights before you say one word that can get used against you. Your next move: speak to someone who’s defended your exact situation before you lose the 30-day evidence window. Don’t wait. Call us at 212-300-5196.