DOJ Announces New Corporate Criminal Enforcement Policies
Client memorandum | September 19, 2022
Authors: Geoffrey S. Berman, Ilan T. Graff, and Alex B. Miller
On September 15, 2022, Deputy Attorney General (“DAG”) Lisa O. Monaco announced revisions to the Department of Justice’s (“DOJ”) corporate criminal enforcement policies (the “Corporate Enforcement Policies”). These revisions develop and clarify policies and priorities that DAG Monaco announced in October 2021 with respect to individual accountability, the treatment of a corporation’s prior misconduct, and the use of corporate monitors. The Corporate Enforcement Policies marked the culmination of a year-long effort by the Corporate Crime Advisory Group, which DAG Monaco convened last fall and tasked with conducting a comprehensive review of federal corporate criminal enforcement.
I. Individual Accountability
The Corporate Enforcement Policies leave investigations of individuals as the focus of DOJ white-collar enforcement while creating new incentives to further encourage companies to support such efforts. The DOJ had already required companies to disclose “all relevant, non-privileged facts about individual misconduct” in order to be eligible for cooperation credit. Now, “to receive full cooperation credit, corporations must produce on a timely basis all relevant, non-privileged facts and evidence about individual misconduct such that prosecutors have the opportunity to effectively investigate and seek criminal charges against culpable individuals.” Companies must prioritize producing evidence that is “most relevant for assessing individual culpability.” Failure to promptly produce and prioritize such information or documents will adversely impact cooperation credit.
II. History of Misconduct
The Corporate Enforcement Policies provide additional guidance on the factors that prosecutors should consider when determining appropriate corporate resolutions. DAG Monaco has previously highlighted concern for repeat offenders, emphasizing that “[c]orporate recidivism undermines the purpose of pretrial diversion” and signaling that a corporation’s history of criminal, civil, and regulatory resolutions would impact DOJ resolutions. The Corporate Enforcement Policies clarify that not all instances of past misconduct “are equally relevant or probative” and mandate that prosecutors “consider the form of prior resolution and the associated sanctions or penalties, as well as the elapsed time between the instant misconduct, the prior resolution, and the conduct underlying the prior resolution.” Recent domestic criminal resolutions will weigh most heavily against corporate recidivists. Criminal resolutions that occurred more than ten years before the conduct at issue, and civil or regulatory matters that were resolved more than five years before the current conduct, will generally be accorded less weight.
Prosecutors will also consider the “facts and circumstances underlying a corporation’s prior resolution.” This includes an evaluation of facts that could reflect broader weakness in the company’s compliance program or culture, such as whether the misconduct occurred under the same leadership team or whether the present and past misconduct share root causes. Federal prosecutors will look favorably on the adoption of remedial measures that address the underlying causes of prior misconduct, “including employee discipline, compensation claw backs, restitution, management restructuring, and regular compliance program updates.”
The Corporate Enforcement Policies reflect and reinforce the DOJ’s view that corporations should be rewarded for voluntarily disclosing criminal misconduct, and direct each DOJ component that prosecutes corporate crime to review its voluntary self-disclosure policies, and if it lacks a formal policy, to draft and disseminate one. All such policies must conform to the following core principles: (1) “absent . . . aggravating factors, the [DOJ] will not seek a guilty plea where a corporation has voluntarily self-disclosed, fully cooperated, and timely and appropriately remediated the criminal conduct,” and (2) the DOJ will not require an independent compliance monitor “for a cooperating corporation that voluntarily self-discloses the relevant conduct if, at the time of resolution, it also demonstrates that it has implemented and tested an effective compliance program.”
The Corporate Enforcement Policies also identify prophylactic steps that corporate leadership can take to develop and sustain effective compliance programs and ethical corporate cultures, noting that such actions will weigh in companies’ favor when the DOJ considers potential corporate resolutions. Among other things, the guidance encourages adopting compensation structures that promote compliance and deter misconduct (e.g., claw back measures and partial escrowing of compensation), and implementing policies and procedures governing the appropriate “use of personal devices and third-party messaging platforms to ensure that business-related electronic data and communications are preserved.” When effectively executed, these structures and policies will signal to the DOJ that a company is committed to its compliance program and culture.
Lastly, the Corporate Enforcement Policies provide further clarity on factors that prosecutors are to consider when evaluating whether an independent compliance monitor is appropriate. This non-exhaustive list of factors includes whether the corporation has already implemented and tested an effective compliance program, whether the underlying misconduct “involved the exploitation of an inadequate compliance program,” and whether compliance personnel failed to respond or actively participated in the criminal conduct. When a monitor is imposed, DOJ prosecutors must track the monitor’s efforts and ensure that they “remain tailored to the workplan and scope of the monitorship.”
When announcing the Corporate Enforcement Policies, DAG Monaco acknowledged the decade-long decline in corporate prosecutions, emphasizing that prosecutors “need to do more and move faster” to reverse that trend and announcing that the DOJ would be seeking $250,000,000 in funding for corporate enforcement initiatives in the coming year. Although surging resources to white-collar prosecutions has proven more complicated than some had expected, the DOJ has secured a number of substantial corporate guilty pleas in recent months. The new DOJ memorandum provides further clarity on DOJ enforcement priorities and welcome guidance on what corporate leadership can do in the near term to demonstrate responsible behavior and mitigate the fallout from any future enforcement actions.
 Memorandum from Lisa Monaco, Deputy Att’y Gen., Dep’t of Just., to all U.S. Att’ys, at 3 (Sept. 15, 2022), https://www.justice.gov/opa/speech/file/1535301/download.
 See Lisa O. Monaco, Deputy Att’y Gen., U.S. Dep’t of Just., Keynote Address at ABA's 36th National Institute on White Collar Crime (Oct. 28, 2021), https://www.justice.gov/opa/speech/deputy-attorney-general-lisa-o-monaco-gives-keynote-address-abas-36th-national-institute.
 Monaco, supra note 1, at 5.
 Id. at 6.
 Id. at 6-7.
 Id. at 7.
 Id. at 9-10.
 Id. at 11.
 Id. at 12-13.
 Id. at 14.
 Lisa O. Monaco, Deputy Att'y Gen., U.S. Dep't of Just., Remarks on Corporate Criminal Enforcement (Sept. 15, 2022), https://www.justice.gov/opa/speech/deputy-attorney-general-lisa-o-monaco-delivers-remarks-corporate-criminal-enforcement.
 See Ilan Graff, Expert Analysis, Checking In On DOJ’s Promised White Collar Crackdown, Law360 (July 8, 2022), https://www.law360.com/articles/1509032/checking-in-on-doj-s-promised-white-collar-crackdown.
 See Press Release, U.S. Dep’t of Just., FCA US LLC Enters Guilty Plea to Fraud Conspiracy (June 3, 2022), https://www.justice.gov/opa/pr/fca-us-llc-enters-guilty-plea-fraud-conspiracy.; Press Release, U.S. Dep’t of Just., U.S. Att’y’s Office, S.D.N.Y, Glencore Entered Guilty Pleas To Foreign Bribery And Market Manipulation Conspiracies (May 24, 2022), https://www.justice.gov/usao-sdny/pr/glencore-entered-guilty-pleas-foreign-bribery-and-market-manipulation-conspiracies; Press Release, U.S. Dep’t of Just., U.S. Att’y’s Office, S.D.N.Y, Three Portfolio Managers And Allianz Global Investors U.S. Charged In Connection With Multi-Billion Dollar Fraud Scheme (May 17, 2022), https://www.justice.gov/usao-sdny/pr/three-portfolio-managers-and-allianz-global-investors-us-charged-connection-multi.
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