Sticks, Not Carrots: DOJ Announces Bold Approach To Corporate Criminal Enforcement – Criminal Law

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Sticks instead of carrots: DOJ announces bold approach to enforcing corporate crime

November 04, 2021

Alston & Vogel

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summary

Get ready for a return to a tougher line of Justice Department white-collar crime. Our White Collar, Government & Internal Investigations team is analyzing the recent keynote speech by Assistant Attorney General Lisa O. Monaco in order to get to the heart of the DOJ’s new initiative and provide key insights in preparation for the new regime.

• The DOJ’s “first priority” is the prosecution of individuals
• But companies aren’t off the hook – make sure you have robust compliance programs in place
• Three specific initiatives in support of this renewed commitment to business enforcement

On October 28, 2021, the Deputy Attorney General (DAG) Lisa O. Monaco gave a keynote address at the 36th National Institute on White Collar Crime of the American Bar Association, an outlook on the government’s priorities in the enforcement of corporate crime, thus signaling that Department of Justice (DOJ) commitment to a more muscular approach to corporate crime enforcement.

The speech

In no uncertain terms, the DAG stated the DOJ’s renewed commitment to prosecuting individuals responsible for corporate misconduct, stating that “unequivocally, the top priority of this white-collar crime department is to prosecute those who benefit from and benefit from corporate crimes benefit “and urged DOJ prosecutors” to be courageous to hold those who commit criminal behavior accountable “.

Monaco added that this renewed focus on individual accountability for corporate criminal misconduct will not come at the expense of corporate accountability, stating that “while individual accountability remains a priority, we may not hesitate to hold companies accountable . ” She also explicitly warned companies to “actively review their compliance programs to ensure they are adequately monitoring and correcting misconduct,” promising it would not “cost them down the line,” she added

Corporations serve their shareholders by proactively establishing compliance functions and investing resources in anticipating problems. They do this by avoiding regulatory action in the first place and getting government loans. Conversely, we will ensure that the absence of such programs inevitably becomes a costly omission for companies that are the focus of departmental investigations.

The DAG announced three specific DOJ initiatives in support of this renewed commitment to business enforcement:

1. Return to a more demanding standard for obtaining collaborative credit. To obtain credit for working with an investigation by the DOJ, companies must provide all non-privileged information about individuals involved in or responsible for the misconduct in question, regardless of their position, status, or seniority. This restores the guidelines first formulated in the DOJ’s “Yates Memo” of 2015, which was amended in 2018 to only require the identification of every person who was materially involved in or responsible for the criminal behavior.
2. An expanded range of matters considered relevant as past misconduct. In determining the appropriate outcome of a corporate criminal investigation, the DOJ prosecutors must assess “all previous misconduct” of the company, including “the complete criminal, civil and regulatory records” and “whether or not that misconduct is similar” to the conduct at issue in a particular investigation “and whether or not the misconduct was the subject of an investigation by the Justice Department.
3. Greater willingness to introduce independent corporate compliance monitors. During the previous administration, the DOJ issued guidelines suggesting a predisposition to the imposition of independent compliance monitors. The DAG overturned these guidelines and emphasized the DOJ’s belief that independent compliance monitors should be deployed “when appropriate to convince our prosecutors that a company is complying with its compliance and disclosure obligations under the DPA or NPA” .

According to Monaco, these are only the first steps in the DOJ’s increased focus on “fighting white-collar crime” and will be accompanied by a “surge” in resources for the DOJ’s prosecutors to fulfill this obligation. The DOJ will also assess whether relapsed companies can fall back on deferred prosecution agreements (DPAs) and non-prosecution agreements (NPAs) and will ensure that companies that violate the terms of their DPAs and NPAs are reliably held accountable.

Monaco also identified three major trends in corporate crime enforcement: an increasing national security dimension in corporate crime, the increasing role of data analytics in investigations, and the increasing use of new technology by criminals.

While the DAG stated that the DOJ’s “responsibility is to incentivize good corporate citizenship, a culture of compliance, and a sense of accountability”, its remarks are a clear signal that the DOJ does not intend to do so by increasing it of doing the benefits promised to companies that cooperate fully, but through increased and more robust enforcement of corporate crime. She promised that the DOJ “will not hesitate to take action if necessary to combat corporate misconduct,” and the political statements she has announced and promised for the future leave no doubt about her and that DOJ commitment to this approach.

The central theses

• Corporate crime enforcement is a new priority for the DOJ. Monaco’s speech leaves no doubt that corporate crime enforcement against companies and their executives and employees will receive significant attention and encouragement from the highest levels of administration.
• The conditions for future corporate criminal enforcement actions may be stricter. A renewed focus on violations of DPAs and NPAs, along with a focus on back-off companies seeking pre-trial distractions and an increased appetite for monitorships, suggests companies under scrutiny by the DOJ may be less ventilated .
• The DOJ’s expectations of cooperating companies and its intolerance towards recidivists will be greater. The DOJ’s return to the principles set out in the Yates Memo suggests that companies applying for collaborative credit will come under much more pressure and prosecutions or threats of punishment from individual actors than they did.
• Effective corporate compliance programs will be vital. Monaco’s remarks make it clear that the DOJ will continue to step up its review of corporate compliance programs in determining the appropriate outcome of its corporate criminal investigations and will not hesitate to punish companies that have inadequate or ineffective corporate compliance programs.

In reviewing compliance programs, assessing internal controls and procedures, and increasing regulatory oversight and enforcement, Alston & Bird’s White Collar, Government & Internal Investigations team has extensive experience developing and implementing compliance programs, Conducting credible internal investigations and responding to regulatory investigations and enforcement actions.

The content of this article is intended to provide general guidance on the subject. Expert advice should be sought regarding your specific circumstances.

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