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Department of Justice Provides Guidance on Prosecution of Individuals

The Department of Justice (DOJ) long has required entities seeking credit for cooperating with its investigations to provide what it terms “full and truthful” cooperation. In policies memorialized over time, DOJ has been careful to encourage companies to voluntarily come forward, yet has refrained from identifying exactly what it means to be “cooperative.” DOJ now has provided further guidance.

On September 9, Deputy Attorney General Sally Yates sent a memo to all DOJ attorneys – civil and criminal, in all of its divisions — explaining that to obtain tangible cooperation credit, companies must affirmatively identify all relevant facts relating to corporate malfeasance, including the individuals responsible for any misconduct. Companies may no longer claim a general failure of oversight, or a collective failure to appreciate issues, and still reap the benefit of a reduced sentence, non-prosecution agreement or deferred prosecution. Indeed, prosecutors are directed by this guidance to seek information about individuals early in investigations, and to share the information with their counterparts in other sections of DOJ.

While DOJ’s guidance is not new, it does underscore the fact that companies can only act through individuals, and entities cannot act with criminal intent. Therefore, even where a company wants to accept responsibility for wrongdoing, it must specifically identify those persons who took affirmative steps to act knowingly, or who intentionally buried their heads in the sand rather than investigate further.

When conducting an internal investigation of alleged wrongdoing, companies and their counsel must take DOJ’s most recent guidance to heart, and ask tough questions about who knew what facts when, and why specific individuals made decisions on the company’s behalf. Disclosing these individuals will not necessarily lead to their prosecution; however, failing to identify those actors almost certainly will be to the company’s detriment in plea negotiations.

Similarly, in civil cases and parallel civil/criminal investigations, counsel should meaningfully discuss actions taken by individuals, then argue for a lower settlement payment or damages multiplier based on the cooperation. DOJ’s guidance makes it plain that companies deserve credit for this undertaking, and counsel should seek specific benefits where they have identified individuals.

© 2020 Foley & Lardner LLPNational Law Review, Volume V, Number 261
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About this Author

Lisa Noller, Trial Lawyer, Foley Lardner Law Firm
Partner

Lisa Noller is a trial lawyer and investigator with Foley & Lardner LLP, where she is chair of the Government Enforcement, Compliance & White Collar Defense Practice. She has spent almost 20 years investigating, litigating and trying complex criminal and civil cases, including responding to government investigations, conducting corporate internal investigations, and persuading the government not to pursue clients. When cases proceed to trial, Ms. Noller also has significant experience successfully trying a wide variety of over 30 civil and criminal matters in...

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