{"id":6583,"date":"2022-07-25T22:57:30","date_gmt":"2022-07-25T22:57:30","guid":{"rendered":"https:\/\/www.americanconference.com\/fcpa-dc\/?page_id=6583"},"modified":"2023-01-19T16:53:48","modified_gmt":"2023-01-19T16:53:48","slug":"doj-reinvigorating-white-collar-corporate-enforcement","status":"publish","type":"page","link":"https:\/\/www.americanconference.com\/fcpa-dc\/aci-insights\/doj-reinvigorating-white-collar-corporate-enforcement\/","title":{"rendered":"DOJ reinvigorating white-collar<\/span> corporate enforcement"},"content":{"rendered":"
\r\n

By Jaclyn Jaeger<\/p>\r\n

Thursday, May 26, 2022<\/p>\r\n<\/div>\r\n

Several senior officials with the Department of Justice have sounded a warning in recent weeks: Prosecuting individuals who engage in corporate crimes will be central to the agency\u2019s reinvigorated criminal enforcement efforts, and the bar for companies seeking to receive cooperation credit has been reraised as well.<\/p>\r\n\r\n

\u201cThe Justice Department\u2019s interest in prosecuting corporate crime wax and wane over time. Today, it is waxing again,\u201d Attorney General (AG) Merrick Garland stated in remarks<\/a> before the ABA Institute on White-Collar Crime in March.<\/p>\r\n\r\n

In particular, the agency\u2019s top priority in corporate criminal cases is \u201cto prosecute the individuals who commit and profit from corporate malfeasance,\u201d AG Garland stressed. In his remarks, he listed four reasons for why individual prosecutions are a top priority: (1) \u201ccorporations only act through individuals\u201d; (2) \u201cpenalties imposed on individual wrongdoers are felt by those wrongdoers, rather than by shareholders or inanimate organizations\u201d; (3) \u201cthe prospect of personal liability \u2026 is the best deterrent to corporate crime\u201d; and (4) \u201cit is essential to Americans\u2019 trust in the rule of law.\u201d<\/p>\r\n\r\n

The agency\u2019s focus on individual liability is not just rhetoric. In fiscal year (FY) 2021, \u201cthe U.S. Attorneys\u2019 Offices charged 5,521 individuals with white-collar crimes, a 10 percent increase over the previous year,\u201d AG Garland stated. <\/p>\r\n\r\n

FY 2021 was also among \u201cthe busiest trial years on record for the Criminal Division\u2019s Fraud Section,\u201d AG Garland added. \u201cIn 2021, Fraud Section prosecutors publicly charged 333 individuals, convicted 296 individuals by plea, tried 23 cases in 18 districts, and secured convictions of 30 individuals at trial.\u201d<\/p>\r\n\r\n

The enforcement areas concerning individual liability are changing as well. AG Garland specifically called out environmental offenses as an example. The Environment and Natural Resources Division is currently trying or preparing to try 11 indicted cases against 11 companies and 34 individuals, including 14 current or former company executives, for a wide range of criminal environmental offenses, he said.<\/p>\r\n\r\n

Antitrust violations have also been keeping the agency busy, as the Antitrust Division brought 25 criminal cases against 29 individuals and 14 companies last fiscal year, with 146 open grand jury investigations\u2014the most in 30 years, AG Garland said. Additionally, the Antitrust Division is pursuing 18 indicted cases against 10 companies and 42 individuals, including eight current or former CEOs or company presidents, he added.<\/p>\r\n\r\n

Cooperation credit<\/strong><\/p>\r\n\r\n

Most concerning to the legal and compliance profession is that the DOJ has brought back a controversial enforcement policy that frayed the nerves of many companies when it was first memorialized by then-Deputy Attorney General (DAG) Sally Yates in 2015. The so-called \u201cYates Memo<\/a>\u201d stated that, to be eligible for any cooperation credit in criminal cases, companies \u201cmust provide the Department all relevant facts about individuals involved in corporate misconduct.\u201d<\/p>\r\n\r\n

The policy was later relaxed under the Trump administration, insofar as it required companies to identify only individuals who were \u201csubstantially involved\u201d in or responsible for the misconduct at issue, regardless of their position, status, or seniority.<\/p>\r\n\r\n

Under current DAG Monaco, however, the original 2015 cooperation policy has been reinstated, a point that AG Garland stressed in his remarks: \u201cWhen the Justice Department offers a company the opportunity to enter into a resolution for its misconduct, it is in that company\u2019s best interest to provide us with a full picture of what happened and who was involved,\u201d he said. \u201cWhen we give a company the opportunity to come clean, it must come clean about everyone involved in the misconduct, at every level.\u201d<\/p>\r\n\r\n

Revival of the policy resurfaces the same concerns many companies had expressed when it was first introduced under Yates, mainly that, to receive cooperation credit, it will require having to undertake a broad and costly internal investigation if they make the choice to receive cooperation credit all.<\/p>\r\n\r\n\"Anti-Corruption<\/a>\r\n\r\n

A focus on recidivism<\/strong><\/p>\r\n\r\n

Rohan Virgincar, a former trial attorney at the Criminal Division\u2019s Fraud Section and now a partner at Foley, said what\u2019s even \u201cmore earthshattering\u201d is the agency\u2019s new focus on recidivism. \u201cProsecutors are now instructed to consider all of a company\u2019s prior misconduct when resolving a case, even if the violations are unrelated to the current violations under investigation,\u201d he said.<\/p>\r\n\r\n

DAG Monaco explained the reasoning for this during a moderated discussion<\/a> at the New York City Bar Association\u2019s 2022 White Collar Crime Institute in April. \u201cWhen I came back to the Justice Department after having been gone for a few years and was trying to evaluate where we were in the corporate criminal enforcement landscape, I asked my team for some data\u2014and it turned out almost 20 percent of the major corporate resolutions that we had engaged in over the last several years involved companies that were repeat players,\u201d she said.<\/p>\r\n\r\n

These companies previously had been given either a non-prosecution agreement (NPA) or a deferred prosecution agreement (DPA). \u201cThat was an interesting revelation, and it told me we needed to be looking hard at how we are evaluating if a company should get successive DPAs,\u201d Monaco said. \u201cThat is something we are looking very hard at.\u201d <\/p>\r\n\r\n

Currently, the DOJ\u2019s view is that if the company had prior misconduct, \u201cthat that somehow reflects poorly on the company when, in reality, it\u2019s hard to find a company that is not a recidivist, especially for a company that has tens of thousands of employees,\u201d said Daniel Kahn, former acting Deputy Assistant Attorney General of the Criminal Division, chief of the Fraud Section, and chief of the FCPA Unit and now partner at DavisPolk.<\/p>\r\n\r\n

The focus should be more on what the circumstances were for why the misconduct happened and what remedial measures the company is taking to prevent that misconduct from happening again, Kahn said. If a company is taking remedial measures, \u201cthat showcases a company that is doing the right thing,\u201d he said.<\/p>\r\n\r\n

Depending on how the DOJ chooses to revise its enforcement policies, that could have \u201ca very significant impact on whether companies decide to voluntary disclose misconduct or decide to cooperate,\u201d Kahn said. \u201cAll those things are in play right now and are significant issues being looked at by the Department, and companies should look closely to see what happens there.\u201d<\/p>\r\n\r\n

A focus on compliance programs<\/strong><\/p>\r\n\r\n

The Justice Department today places significant emphasis on having in place an effective compliance program that can go a long way in reducing the fines a company may receive in a criminal enforcement matter.<\/p>\r\n\r\n

\u201cThere is a clear recognition by the Department that companies play a very important role in deterring crime and in helping the DOJ prosecute cases,\u201d Kahn said. While DOJ prosecutes crimes, companies are the ones with the ability to earlier detect or proactively stop misconduct before it happens through their compliance programs, he said.<\/p>\r\n\r\n

\u201cThat is more and more becoming a really big factor,\u201d Virgincar said. \u201cOn the flip side, you have cases where the DOJ has specifically called out a poor compliance program.\u201d<\/p>\r\n\r\n

A robust compliance program is also a way to reduce the likelihood of the DOJ requiring an independent compliance monitor. \u201cThey\u2019re looking for improvement over time and some assurance that the company, if left to its own devices, has the tools and processes in place to effectively detect and prevent any number of different kinds of legal violations,\u201d Virgincar said.<\/p>\r\n\r\n

He added, \u201cThe more a company can assure the government that it has made meaningful improvements, and those meaningful improvements are thoughtfully designed to get at whatever the problem was, those kinds of mitigation efforts by companies are looked upon quite favorably by the government.\u201d<\/p>\r\n\r\n

Dan Kahn will be presenting as co-chair<\/span> at ACI’s \u201c39th<\/sup> International Conference on the FCPA,\u201d taking place Nov. 30-Dec. 1, 2022, at the Gaylord National Resort and Convention Center in Washington D.C.<\/em> | www.FCPAconference.com<\/a><\/p>\r\n\r\n

For questions, concerns or more information about ACI Insights, please contact:<\/strong>
Chris Corbin
Associate Director of Marketing
American Conference Institute |<\/span> The Canadian Institute |<\/span> C5
E: c.corbin@americanconference.com<\/a><\/p>","protected":false},"excerpt":{"rendered":"By Jaclyn Jaeger Thursday, May 26, 2022 Several senior officials with the Department of Justice have sounded a warning in recent weeks: Prosecuting individuals who engage in corporate crimes will be central to the agency\u2019s reinvigorated criminal enforcement efforts, and the bar for companies seeking to receive cooperation credit has been reraised as well. \u201cThe…","protected":false},"author":15604,"featured_media":0,"parent":6569,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-6583","page","type-page","status-publish","hentry"],"yoast_head":"\nDOJ reinvigorating white-collar corporate enforcement | ACI Insights | FCPA and Global Anti-Corruption<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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