DOJ Changes Guidelines for Prosecuting Execs for White Collar Crimes

The U.S. Department of Justice has released changes to its guidelines on pursuing criminal cases, urging its prosecutors to “focus on wrongdoing by individuals from the very beginning of any investigation of corporate misconduct.”

The renewed focus on prosecuting executives and other employees for white collar offenses is an acknowledgement of criticism the Justice Department and Attorney General Loretta E. Lynch have received about the lack of prosecution of individuals allegedly responsible for corporate white collar crime.

“Corporations can only commit crimes through flesh-and-blood people,” said Sally Q. Yates, the DOJ’s deputy attorney general in a September 2015 interview with the New York Times. “It’s only fair that the people who are responsible for committing those crimes be held accountable. The public needs to have confidence that there is one system of justice and it applies equally regardless of whether that crime occurs on a street corner or in a boardroom.”

Yates, who authored a memo to prosecutors in September entitled, “Individual Accountability for Corporate Wrongdoing,” laid out six steps for its prosecutors to strengthen their pursuit of executives for corporate crime:

  • To receive any consideration for cooperation from the DOJ, companies must identify all individuals involved in corporate misconduct and provide all relevant facts about their involvement.
  • Prosecutors must focus on individuals from the beginning of any investigation.
  • Absent any extraordinary circumstances and other than in antitrust cases, no corporate resolution will provide protection to individuals for civil or criminal liability.
  • No corporate case may be resolved without a clear plan for the resolution of related individual cases, and any waiver of individual prosecution must be approved by a high-level DOJ official.
  • Routine communication between prosecutors and civil attorneys pursuing corporate investigations is expected.
  • Civil attorneys should focus on individuals as well as a company and any decision on whether or not to file suit against an individual should be based on considerations beyond that individual’s ability to pay civil fines.

Although the Justice Department has collected billions of dollars in fines in the last few years, it has been roundly criticized for not holding executives responsible for corporate wrongdoing. In her memo, Yates said the Department faces substantial challenges in pursuing individuals for corporate misdeeds, and needs a stronger plan for investigating them.

With this new policy now in place, corporations will also need a stronger plan for conducting investigations of potential wrongdoing.

The Cogdell Law Firm is a boutique law firm focusing on large, complex business and criminal financial-related litigation, including white collar criminal defense, securities fraud, health care fraud investigation, criminal appeals and state criminal defense. When results matter most, contact Dan Cogdell at (713) 426-2244 or dan@cogdell-law.com.

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