DOJ to Require Cooperation Certificate Prior to Approving Settlement Agreements

The U.S. Department of Justice’s Fraud Section will now require certificates of cooperation from companies negotiating a settlement agreement to acknowledge that the company has cooperated fully and released all information about any individuals involved in alleged misconduct, according to a Wall Street Journal report.

The WSJ said that DOJ is in the process of developing the certification process for companies seeking a settlement agreement with the DOJ’s fraud unit. As part of the process, companies will need to certify that they have disclosed all non-privileged information about individuals involved in any alleged fraudulent activity prior to finalizing a settlement agreement.

The new certification process stems from a policy announcement last year from DOJ Deputy Attorney General Sally Q. Yates, who authored the memo entitled, “Individual Accountability for Corporate Wrongdoing.” The memo laid out six steps for 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.

Yates’ memo has been incorporated into the DOJ’s Principles of Federal Prosecution Of Business Organizations (USAM § 9-28.000 et seq.), and includes the provision that companies seeking settlement agreements “must identify all individuals involved in or responsible for the misconduct at issue … and provide to the Department all facts relating to that misconduct.” Failure to provide this information would result in no prosecutorial consideration for “cooperation credit” when making charging decisions or negotiating resolution agreements.

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