DOJ ANNOUNCES UPDATES TO ITS CORPORATE CRIMINAL ENFORCEMENT POLICIES
March 27, 2023
On January 17, 2023, the Assistant Attorney General for the U.S. Department of Justice (“DOJ”) announced the Department’s plans to issue a new round of updates to its corporate criminal enforcement policy aimed at encouraging companies to self-report misconduct. Specifically, under the new updates, companies may benefit from greater potential reductions in fines for self-reporting serious misconduct and based on the degree of cooperation shown during DOJ investigations. The policy would also give companies an opportunity to potentially avoid prosecution for serious misconduct involving “aggravating circumstances” such as C-suite involvement in the misconduct, recidivism, and other egregious or pervasive crimes. To receive these benefits companies must have an effective compliance program and accounting controls in place that helped identify the potential wrongdoing, must immediately self-disclose the potential wrongdoing as soon as they become aware of it, and then engage in extensive cooperation and remediation to correct bad actions.
More recently, on February 23, DOJ announced a new voluntary self-disclosure policy for corporate criminal enforcement for U.S. Attorney’s Offices aimed at further incentivizing companies to make voluntary self-disclosures of misconduct. The policy includes a new standard definition for voluntary self-disclosure and guidance on how U.S. Attorney’s Offices will determine whether a company has made a voluntary self-disclosure. For example, a U.S. Attorney’s Office may deem that a company made a timely voluntary self-disclosure if the company self-disclosed prior to (a) an imminent threat of misconduct being revealed, (b) the initiation of a government investigation, (c) the government learning of the misconduct, and/or (d) the misconduct becoming publicly known or uncovered. For companies that timely disclose misconduct and fully cooperate with an investigation, including implementing appropriate remediation, U.S. Attorney’s Offices will not seek guilty pleas, though if certain aggravating factors occur (e.g., if the misconduct poses a grave threat to national security, public health or the environment) a U.S. Attorney’s Office may still seek a guilty plea. The policy also notes that some cases of voluntary self-disclosure may also result in no monetary penalties assessed or a fine no greater than 50% below the lower range of the U.S. sentencing guidelines. The policy also allows for reduced penalties for the voluntary self-disclosure of serious misconduct requiring a guilty plea, allowing companies to still be eligible to receive benefits like a 50%-75% reduction in fines off the lower range of the sentencing guidelines.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com 202-659-6622) or Drew Derco (dderco@eckertseamans.com 202-659-6665).
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