DOJ Announces New Policies Addressing White Collar Criminal Enforcement

Government Enforcement Update

Firm Alert

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Deputy Attorney General Lisa Monaco announced the Department of Justice’s new approach to prosecuting corporate crime, including policy changes that will reduce constraints on prosecutors and increase scrutiny on companies, particularly repeat offenders.

Addressing the American Bar Association’s annual white collar crime conference on October 28, 2021, Monaco outlined DOJ’s plans to prioritize white collar criminal enforcement, including three new actions that will immediately take effect. First, Monaco announced that the agency will restore prior guidance requiring cooperating companies to make broader disclosures to the government. Second, DOJ will evaluate all prior misconduct by a company, not just related misconduct, when determining an appropriate resolution. Third, Monaco rescinded prior department guidance limiting the imposition of corporate monitors, stating that the DOJ “is free to require the imposition of independent monitors” whenever appropriate.

Broader Company Disclosures

Under the new guidance, companies hoping for cooperation credit must provide DOJ with all non-privileged information about individuals involved in or responsible for the misconduct at issue. Monaco emphasized that failure to do so will bar a company’s eligibility for cooperation credit. She expressed that past approaches, in which companies could limit disclosures to those individuals they deemed to be “substantially involved” in misconduct, “afford[ed] companies too much discretion.” Asserting that the DOJ’s investigative team is “better situated than company counsel to determine the relevance and culpability of individuals,” Monaco maintained that the government will not “unfairly prosecute minimal participants.”

Consideration of All Prior Misconduct

Going forward, DOJ will consider a significantly broader range of past misconduct when determining the appropriate resolution for a corporate offender. An amendment to the department’s “Principles of Federal Prosecution of Business Organizations” will direct prosecutors to consider “the full criminal, civil and regulatory record of any company” when determining what resolution is appropriate for a company under criminal investigation. Monaco stressed that this will include “whether th[e] company was prosecuted by another country or state, or whether th[e] company has a history of running afoul of regulators.” This is a significant departure from DOJ’s past practice of taking into consideration similar past misconduct, such as looking at whether a company alleged to have violated the FCPA had done so previously. 

Wider Use of Corporate Monitors

Finally, under the new guidance companies entering deferred and non-prosecution agreements are likely to see once again DOJ requiring the imposition of a corporate monitor. Reversing a shift under the Trump administration that saw the imposition of a monitor to be “the exception and not the rule,” prosecutors may now require an independent monitor “whenever it is appropriate.”

Looking Forward

Monaco also announced that the department is evaluating additional policy changes, particularly those concerning companies that are “repeat offenders.” DOJ will analyze data on corporate resolutions to consider whether pretrial diversions, such as NPAs and DPAs, are appropriate for recidivist companies. Additionally, Monaco hinted that DOJ will take a tougher line against companies failing to satisfy fully their obligations under an NPA or DPA. She expressed concern that some companies have not taken such obligations seriously in the past and declared that in the future any violations will be met with “serious consequences.”

What This Means for Companies

The Biden administration is prioritizing the investigation and prosecution of corporate crime and is giving DOJ prosecutors broader power to do so. The new changes Monaco announced are only a “first step,” and the department will create an advisory group to study additional changes. Companies should actively review compliance programs to ensure they adequately monitor for and remediate misconduct. Though Monaco acknowledged that it can be costly to adopt effective measures that proactively deter misconduct, she declared that the failure to do so may well cost companies down the line.