December 1, 2022

Volume XII, Number 335


November 30, 2022

Subscribe to Latest Legal News and Analysis

November 29, 2022

Subscribe to Latest Legal News and Analysis

November 28, 2022

Subscribe to Latest Legal News and Analysis

DOJ Seeks to Toughen its Corporate Criminal Enforcement Policies

On October 28, 2021, Deputy Attorney General Lisa Monaco announced three changes to the Department of Justice’s (DOJ) approach to corporate criminal enforcement. Monaco announced the changes during the Keynote Address at the American Bar Association’s National Institute on White Collar Crime and issued an accompanying memorandum with directives to DOJ components. Taken together, the policy changes reflect the Biden Administration’s stated priority to increase corporate criminal enforcement. Only time will tell if these changes will, in fact, lead to any meaningful change in how DOJ prosecutes corporations for federal criminal violations given the overall decline of corporate criminal enforcement in recent years. The announced changes are as follows.

First, for a company to earn cooperation credit, it must provide DOJ with all non-privileged information about all individuals involved in the relevant misconduct, regardless of the degree of involvement, status, or seniority. This is a return to DOJ’s 2015 “Yates Memorandum” standard, which was modified in 2018 when DOJ changed the policy to allow companies to disclose only information about individuals “substantially involved” in misconduct to receive cooperation credit.

Critically, the Monaco memorandum does not expressly state whether this requirement to disclose all individuals applies in civil matters such as False Claims Act (FCA) cases. The memorandum does, however, purport to “reinstate[]” the Yates Memorandum, which expressly applied to civil matters. This raises the question whether DOJ will now require companies to identify every individual involved in an FCA violation, even when doing so will slow the progress of FCA investigations and require expending investigative resources disproportionate to any potential recovery.

Second, DOJ will now require prosecutors to consider the entirety of a company’s history of misconduct, regardless of whether past misconduct is similar to the misconduct presently at issue. Prosecutors must now begin with the presumption that all misconduct — including offenses prosecuted by other divisions of the DOJ, other states, and other countries — is potentially relevant. This could lead to more severe penalties for some companies, although how this will impact corporate resolutions remains to be seen.

Third, DOJ will reverse its policy disfavoring the imposition of independent corporate monitors. In the past, DOJ had instructed prosecutors that monitors were to be the exception in corporate resolutions, reserved for instances when DOJ identified a clear need and benefit to a monitorship when weighed against its costs. DOJ now is free to require an independent monitor “whenever it is appropriate to do so” to satisfy prosecutors that a company is fulfilling its compliance and disclosure obligations.

Monaco also announced the formation of a Corporate Crime Advisory Group (CCAG). The CCAG will be composed of representatives from every DOJ division involved in corporate criminal enforcement and will have a “broad mandate” — including to consider monitorship selection, recidivism, and non-compliance with Non-Prosecution Agreements or Deferred Prosecution Agreements — and provide benchmarks to measure a company’s successful cooperation. In addition, the CCAG will consult with DOJ components broadly, making recommendations and proposing revisions to DOJ policy to facilitate more rigorous enforcement and prioritize individual accountability.

Implications of These Changes

Monaco’s announcement continues a series of recent pledges by the Biden Administration to bolster enforcement of corporate crime. This renewed focus, if properly resourced and supported by both Main Justice and the U.S. Attorney’s Offices’ prosecutors, has practical impact:

  • A sustained interest in corporate compliance efforts. As Monaco said, “Companies need to actively review their compliance programs to ensure they adequately monitor for and remediate misconduct — or else it’s going to cost them down the line.” Having a robust compliance program will help companies detect problems earlier and make remediation of problems easier.

  • The path to obtaining cooperation credit is now more difficult, requiring companies to make difficult decisions when confronting potential misconduct. If a company seeks cooperation credit, it must thoroughly investigate conduct to persuade DOJ the company has met its obligation to identify and disclose “all” non-privileged information about all individuals.

  • DOJ’s expanded consideration of relevant misconduct poses risks for large corporate entities, longstanding entities, and acquisitive companies — all more likely to have a broader track record to scrutinize. It will be important for company advocates to give prosecutors the broader context of the company’s history, including its compliance efforts, so prosecutors have an accurate view of the company’s responsibility.

Some corporations may take a “wait and see” approach to this announcement, given how often DOJ seems to cycle through a similar set of promises and warnings depending on whom the attorney general is. In contrast, those corporations that place a high value on compliance will likely use this announcement to help increase the focus on compliance inside those organizations. 

© 2022 Foley & Lardner LLPNational Law Review, Volume XI, Number 307

About this Author

Matt Krueger Corporate Cybersecurity and Litigation Attorney Foley & Lardner Law Firm Milwaukee

Matt Krueger, a former United States Attorney, is a skilled advocate who represents companies and individuals facing government enforcement and complex litigation challenges. Matt also helps clients mitigate risk by advising on corporate compliance programs and conducting internal investigations. He offers clients well-honed judgment, drawn from private practice and several Justice Department roles, including civil False Claims Act enforcement and white-collar criminal prosecutions. Matt has tried multiple cases, argued numerous appeals, and handled and supervised...

Rohan Virginkar, Foley Lardner Law Firm, Washington DC, Government Enforcement Attorney

Rohan Virginkar is a former federal prosecutor and a member of the Government Enforcement Defense & Investigations Practice in the Washington D.C. office of Foley & Lardner LLP. His practice focuses on advising corporations and executives on government and regulatory actions; conducting internal investigations; leading corporate compliance matters; and representing individuals and corporations in white collar matters and investigations by the U.S. Department of Justice, United States Attorney’s Offices, the U.S. Securities and Exchange Commission, and other...

Pam Johnston, Trial Attorney, Foley Lardner Law Firm

Pamela L. Johnston is a partner and trial lawyer with Foley & Lardner LLP, where she is chair of the firm’s Government Enforcement, Compliance & White Collar Defense Practice, a member of the Securities Enforcement & Litigation Practice, and a member of the Health Care Industry Team. Ms. Johnston focuses in the areas of white collar criminal defense, False Claims Act and whistleblower actions, securities enforcement and other governmental enforcement actions. She represents companies and individuals in parallel civil and criminal proceedings involving a...

Whitney M. Swart Corporate Litigation Attorney Foley & Lardner Washington DC

Whitney Swart is a litigation associate with Foley & Lardner LLP, based in the firm’s Washington, D.C. office. She is a member of the firm’s Business Litigation & Dispute Resolution and the Pro Bono Racial Justice and Equity Practice Groups. Whitney is admitted only in MarylandShe is practicing under the supervision of a member of the D.C. Bar.

Whitney has worked on a variety of investigations and litigation disputes. She regularly consults clients on the Administrative Procedure Act, contract disputes, and...

Lori A. Rubin, litigation lawyer, false claims act, attorney, Foley law firm

Lori Rubin is a partner at Foley & Lardner LLP and member of the firm’s Government Enforcement Defense & Investigations and Health Care Practice Groups.  Her practice focuses on False Claims Act investigations and litigation, particularly on behalf of clients in the health care industry.