It’s an old lesson in government investigations, but one worth repeating. Conduct during an investigation can matter as much as the conduct under investigation – sometimes even more.

High-profile prosecutions of the past have shown the severe consequences of mistakes in responding to government investigations. Martha Stewart went to prison not for insider trading but for how she responded to an insider trading investigation. Barry Bonds was convicted not for steroid use, but for how he responded to a steroids investigation.

Just as flawed responses can increase risk in government investigations, so too can legally sound responses reduce risk, as a recent securities and tax fraud case showed. Thanks to a prudent response to a government investigation, an accountant avoided prison altogether for his role in an illegal $17 million stock manipulation scheme that allegedly pocketed him hundreds of thousands of dollars.

In 2018, New York accountant Shaun Greenwald pled guilty to conspiracy charges for helping trader Joseph Taub orchestrate a scheme to manipulate stock prices. According to the charges, Taub and Greenwald arranged for the creation of dozens of “straw accounts” which were held in the names of others, but actually controlled by Taub and his co-conspirators. Some of the accounts were used to buy shares and create the impression of market interest, while other accounts were used to profit from that appearance of market interest. Taub allegedly reaped more than $17 million in profits from the scheme.

Greenwald’s charges alleged that he not only held straw accounts but also actively concealed from brokerage firms that the accounts were being used for the scheme. Greenwald also aided in tax fraud by facilitating payment of taxes at the lower marginal rate of the straw account holders, instead of rates applicable to Greenwald and Taub.

Greenwald pled guilty to one count of conspiring to commit securities fraud and one count of conspiring to defraud the United States, each in violation of 18 U.S.C. §371. In theory, such violations could result in as much as ten years in prison. Instead, Greenwald was sentenced to none – three years of probation and eight months of home confinement, plus restitution.

Why? Because of his response to the investigation. In explaining the lenient sentence at a February 23 hearing, U.S. District Judge John Michael Vazquez cited not just Greenwald’s conduct during the scheme but also his conduct during the investigation. Notably, the judge said, Greenwald’s cooperation with the government’s investigation was so comprehensive that the government acknowledged it had no evidence that Greenwald held back in any regard. Instead, Judge Vasquez said, Greenwald cooperated in full and provided key information that helped the government build its case against Taub.

Government investigations vary from one to the next, and there is no one-size-fits-all response suitable for every investigation. In Greenwald’s case, it was his complete cooperation and provision of key evidence that yielded a favorable outcome. While credible engagement and cooperation with the government are often critical, the details of a sound approach in responding to an investigation ultimately depend on the factual and legal considerations of each investigation. Good counsel is essential.