DOJ Changes Federal Corporate Crime Policies, Leading to Increased Enforcement Actions

Corporate crime concept

In October, the U.S. Department of Justice (DOJ) announced a roll-back of a series of Trump administration policies that Biden administration officials say were too lenient toward corporate crimes.

Deputy Attorney General Lisa Monaco outlined a set of tough new policies that are intended to hold corporations and corporate executives accountable through increased civil, regulatory, and criminal enforcement actions. The new policies raise the stakes for corporations that operate in heavily regulated industries and increase the likelihood of an enforcement action, civil lawsuits, and criminal charges. The DOJ’s new policies also signal an intent to encourage companies to renew their focus on internal compliance programs.

DOJ Policies Signal Renewed Focus on Corporate Crime Enforcement

The new DOJ policies include several provisions that will make it easier for federal prosecutors to investigate and charge corporations and executives with corporate crimes.

Past Civil and Regulatory Resolutions Will Be Considered in Criminal Matters

Representing a significant shift in policy, the DOJ will now consider a company’s “whole criminal, civil, and regulatory” record when deciding appropriate resolutions.

Historically, regulators would only consider a company’s past record as it related to similar criminal conduct. Thus, a company with a history of civil or regulatory misconduct could essentially come before the DOJ with a clean slate. But under the new policies, a company’s civil and regulatory resolutions will be considered when the DOJ evaluates criminal penalties.

Return to the Yates Memo Cooperation Credit

In 2015, then-Deputy Director Sally Yates issued a memo that prioritized the prosecution of individuals involved in corporate misconduct. The memo required that corporations that seek cooperation credit provide “all relevant facts” and “identify all individuals” involved in allegations of corporate misconduct. The Trump administration rescinded this guidance, loosening several policies that relate to corporate criminal liability and only requiring that companies identify individuals who were “substantially involved” in the alleged misconduct.

Deputy Director Monaco announced a return to the more aggressive standard which requires that companies identify “all individuals” involved in the corporate misconduct in order to receive the cooperation credit.

Non-Prosecution and Deferred-Prosecution Agreements to Receive Additional Scrutiny

The DOJ will also more closely examine non-prosecution agreements and deferred prosecution agreements to ensure that companies are complying with their obligations.

Historically, the DOJ rarely pursued investigations when a party was alleged to have breached these agreements. But under the new guidance, the DOJ will take a tougher stance on the enforcement of criminal resolutions and will investigate allegations of violations more aggressively.

Return to Corporate Monitorships

Finally, the DOJ announced that it was rescinding the presumption against corporate monitors.

The Trump administration had reduced the number of corporate monitors and issued guidance discouraging their use. But under the Biden administration, the DOJ will examine the strength of a company’s existing compliance program, whether it self-reported the conduct at issue, and its level of cooperation with the DOJ.

Monitors had previously been used to oversee compliance programs and implement strict requirements to ensure that corruption problems were addressed.

Business Leaders Must Proactively Address Compliance to Avoid Prosecution for White-Collar Crimes

The DOJ’s announcement is intended to send a message to business leaders that they need to step up compliance efforts if they wish to avoid prosecution for white-collar crimes.

To avoid increased scrutiny and possible prosecution, corporate executives should reexamine their business’ compliance measures. And if business leaders uncover evidence of corporate misconduct, they will be well-served to address it as quickly as possible.

If business executives uncover areas where their company’s commitment to transparency has waned, they must act quickly to demonstrate a commitment to corporate accountability. Otherwise, the DOJ will aggressively use the enforcement tools it has at its disposal to investigate and prosecute the people it believes committed white-collar crimes.

Hope Lefeber: Aggressive Defense for People Charged with Corporate Crimes

If your company did not respond to these changes in DOJ policy quickly enough and you find yourself the target of an enforcement investigation, it is critical that you hire experienced white-collar criminal counsel as quickly as possible.

New York City white-collar criminal defense attorney Hope Lefeber has extensive experience representing businessmen and women in white-collar criminal cases and in investigations by the DOJ and other federal agencies.

Ms. Lefeber began her career as an enforcement attorney with the United States Securities and Exchange Commission (SEC), where she learned first-hand how the federal government prepares and prosecutes federal white-collar criminal cases. Today, she uses that experience to defend people who are under investigation or have been charged with white-collar crimes in federal court.

Ms. Lefeber has defended high-profile clients including executives at Fortune 500 Companies, businessmen and women, doctors, lawyers, professors, healthcare professionals, and other people who have been charged with crimes in federal court. Put her experience to work for you by contacting Hope Lefeber today to schedule a confidential consultation to discuss your situation and how she can help.