On October 28, 2021, Deputy United States Attorney General Lisa Monaco issued a memorandum marking the first major announcement on corporate criminal enforcement from the Department of Justice (“DOJ”) under the Biden Administration (“Monaco Memo”). Most notably, this memorandum: (1) reinstates the Individual Accountability Policy originally announced in the Yates Memo and (2) guides prosecutors to look at all prior misconduct, not just those instances similar to the misconduct at issue in the present investigation. Continue reading “DOJ Reinstates and Augments Prior Corporate Criminal Enforcement Policies: Now Requiring Disclosure of ALL Involved Individuals and Consideration of ALL Prior Corporate Misconduct”
On July 1, 2021, U.S. Attorney General Merrick Garland published a memorandum that rescinds two previous memoranda―the Sessions Memorandum and Brand Memorandum―that prohibited Department of Justice attorneys from using noncompliance with federal agency guidance documents as a basis for civil and criminal enforcement cases. Garland’s memorandum states these previous policies were “overly restrictive,” “discouraged the development of valuable guidance” and hindered DOJ’s litigation of cases when relevant agency guidance was available.
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With the change of presidential administrations in January 2017, it was expected that the priorities of the U. S. Department of Justice (DOJ) would shift away from white-collar crime enforcement and towards immigration, violent crime, and narcotics enforcement. But recent data actually show a significant uptick in both prosecutions and convictions of individuals by the DOJ Criminal Division’s Fraud Section in 2018 over the previous two years. Moreover, the amount of money the DOJ recovered from companies through Deferred Prosecution Agreements (DPAs) or Non-Prosecution Agreements (NPAs) skyrocketed in 2018 .
In early 2018, the U.S. Department of Justice announced a new policy encouraging prosecutors handling False Claims Act (FCA) cases to seek dismissal of qui tam complaints that threaten the government’s interests. However, it was unclear how and to what extent prosecutors would carry out that directive. Now a year later, federal prosecutors appear to be embracing the new policy—and it is already having an effect on one case involving a drug manufacturer.
The January 2018 Granston memorandum outlined the Department’s new approach to handling FCA prosecutions in “in light of the government’s limited resources.” Under the new policy, prosecutors are encouraged to move to dismiss qui tam claims as a way to “advance the government’s interests, preserve limited resources, and avoid adverse precedent.” This marked a departure from the Department’s previous policy of rarely exercising its statutory authority to dismiss such claims. To guide prosecutors, the memorandum offered a nonexhaustive list of factors as to when a motion to dismiss a qui tam claim is proper. Those factors include: (1) “curbing meritless qui tams”; (2) “preventing parasitic or opportunistic qui tam actions”; (3) “preventing interference with agency policies and programs”; (4) “controlling litigation brought on behalf of the United States”; (5) “safeguarding classified information and national security interests”; (6) “preserving government resources”; and (7) “addressing egregious procedural errors.” Overall, the memorandum instructed prosecutors to seek dismissal when the litigation does not serve the government’s interests.
On November 29, 2018, Deputy Attorney General Rod J. Rosenstein announced the Department of Justice’s (DOJ) much-anticipated revisions to the September 2015 Memorandum on “Individual Accountability for Corporate Wrongdoing,” commonly known as the “Yates Memo” and named for Rosenstein’s predecessor, Sally Q. Yates. The Yates Memo emphasized the importance of holding individuals accountable for corporate misconduct, and set forth principles for DOJ prosecutors to follow in determining when corporations would qualify for “cooperation credit” in corporate criminal and civil investigations. The most significant—and controversial—provision in the Yates Memo required that “in order to qualify for any cooperation credit, corporations must provide to the Department all relevant facts relating to the individuals responsible for the misconduct.” The new policy announced by Rosenstein modifies this “all or nothing” approach to cooperation credit by giving DOJ prosecutors and civil attorneys more flexibility.
In announcing the new policy, Rosenstein reaffirmed the Department’s commitment to prosecuting individual wrongdoers, stating that, “The most effective deterrent to corporate criminal misconduct is identifying and punishing the people who committed the crimes.” However, he stated that the lack of flexibility in the Yates Memo’s approach impeded resolutions and wasted resources, and in some cases was not strictly enforced.
On October 11, 2018, Assistant Attorney General for the Criminal Division of the U. S. Department of Justice (DOJ) Brian A. Benczkowski issued new guidance on the selection of corporate compliance monitors in Criminal Division matters. The Benczkowski Memorandum signals a shift toward a more business-friendly approach to the imposition and use of monitors by the DOJ. Among other new provisions, the guidance directs prosecutors to weigh the potential benefits of a monitor against the costs and burdens on the company, and to consider whether the company’s existing compliance program and controls obviate the need for a monitor.
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The Inspector General of the U.S. Department of Justice (“DOJ”) released a report on March 29, 2017, faulting the DOJ for failing to systematically evaluate its forfeiture data to determine the extent to which seizures benefit law enforcement efforts or present potential risks to civil liberties. While the Inspector General’s (“IG’s”) report specifically focused on the forfeiture activities of the federal Drug Enforcement Agency (DEA), its conclusions may likely be extended to other arenas in which the federal government initiates civil forfeiture activities, including white collar crime. Continue reading “New Scrutiny of Civil Forfeiture Laws”