DOJ focuses on corporate wrongdoing and white-collar crime

Last week, US Department of Justice Deputy Attorney General Lisa Monaco announced plans to increase its enforcement of white-collar crimes against individuals and businesses. Monaco made the announcement while speaking at the American Bar Association’s While Collar Crime conference. She made it clear to “those of you who are advisers and voices in the C-Suite and the boardroom” that the DOJ “will not hesitate to take action if necessary to address corporate wrongdoing.” companies”.

Monaco, the DOJ’s second-in-command, is no stranger to prosecuting corporate crimes that participated in the Enron investigation. Unveiling an ambitious plan for prosecutors to hold accountable those who engage in criminal acts, Monaco noted that in the future, federal prosecutors will be mandated to “enforce the criminal laws that govern corporations, directors, managers and others, in order to protect jobs”. , protect savings and maintain our collective confidence in the economic engine that powers this country.

Additionally, Monaco informed the audience that Attorney General Merrick Garland “has made it clear that this department’s first priority in corporate criminal matters is to prosecute those who commit and profit from corporate malfeasance.” This directive is in addition to The DOJ’s ongoing and public focus on criminal and civil law enforcement investigations related to COVID-19.

According to Monaco, the impetus for this new focus on corporate malfeasance came from the changing nature of corporate crime: corporate crimes increasingly have national security implications; investigators can use more sophisticated data analytics to track criminal behavior; and emerging technology and financial industries, such as cryptocurrency, are driving new frontiers in criminal schemes.

Monaco acknowledged that cases against corporate executives are “some of the toughest” the DOJ brings, but promised that prosecutors would not be discouraged by the prospect of losing cases. She urged prosecutors to be “bold” in bringing charges against leaders to hold accountable those who committed crimes. And, significantly, Monaco noted that the DOJ intends to provide substantial resources to its prosecutors to engage in these types of enforcement actions.

Specifically, Monaco detailed three new DOJ initiatives that will guide federal prosecutors, though it warned the policies would only be a “first step” in stepping up DOJ investigations into corporate crimes. These initiatives follow the DOJ’s 2020 release of its revisions to the Enterprise Program Evaluation Guidelines, focused on more individualized assessments for companies caught in the DOJ’s crosshairs.

  • First, the DOJ will require more disclosures from companies about misconduct. “It will no longer be enough for companies to limit disclosures to those they believe to be ‘substantially involved’ in the misconduct.” Instead of, in a restoration of the earlier principles detailed in Yates’ note, to be recognized for cooperating with prosecutors, companies must disclose “all non-inside information about individual wrongdoing.” This puts federal prosecutors — not the companies and executives themselves — in the position to assess the relevance and culpability of anyone involved in the misconduct.

  • Second, when evaluating resolutions, the DOJ will no longer consider only a company’s past. similar misconduct, but instead the DOJ will consider the entirety past corporate misconduct. Currently, for example, in a tax case, the DOJ would only consider the company’s past tax misconduct (if any) in reaching a resolution of that tax case. Now, in the future, the DOJ will review any past misconduct, whether related to violations of the tax code, the Foreign Corrupt Practices Act, anti-money laundering provisions, misrepresentation law or any other federal law. or state It should be noted that Monaco has made it clear that federal prosecutors will not ignore a company’s past misconduct by the state. Monaco ordered prosecutors “to start by assuming that all prior misconduct is potentially relevant”. Monaco questioned whether pre-trial diversion, such as non-prosecution or deferred prosecution agreements, was appropriate for repeat offenders.

  • Third, the DOJ will seek to impose independent monitors to oversee a company’s compliance and disclosure obligations. This latest move marks a sharp break from years past, when independent reviewers were the exception rather than the rule, and a return to earlier DOJ policies.

In addition, Monaco also announced the formation of the Corporate Crime Advisory Group. This new group will propose new policies and procedures for combating corporate crime within the DOJ. The group will examine issues such as repeated corporate violations, failure to comply with deferred prosecution agreements, the selection of monitors and the allocation of resources to investigate corporate crimes, and will also develop benchmarks for to measure the cooperation of a company.

Echoing recent statements about the importance of compliance, Monaco concluded by warning companies “to actively review their compliance programs to ensure they are adequately monitoring and correcting misconduct – otherwise it will cost them dearly in Ultimately”.

Businesses should heed this advice. Indeed, when it comes to avoiding government investigations, there is substantial benefits for companies to be proactive in reviewing and updating their compliance programs and procedures. The applicability of Benjamin Franklin’s old adage – an ounce of prevention is better than cure – cannot be overstated. Companies will be better served by conducting an assessment of their actions today, rather than having the DOJ investigate their actions tomorrow following an expected increase in investigations and white-collar lawsuits.

©2022 Epstein Becker & Green, PC All rights reserved.National Law Review, Volume XI, Number 309

Elizabeth J. Harless