DOJ warns white-collar bar association it’s going after individuals | Newsletters | Legal news: government enforcement, defense and investigations

On March 3, 2022, at the American Bar Association’s National Institute on White-Collar Crime, Attorney General Merrick Garland emphasized in a keynote address the Biden administration’s stated priority of increasing corporate criminal enforcement. , in particular individual defendants.

Garland emphasized that the DOJ’s “first priority in corporate criminal cases is to prosecute the individuals who commit and profit from corporate wrongdoing. Although the DOJ has previously said it is renewing its focus on individual lawsuits, Garland’s statements underscore that commitment. In particular, Garland (1) announced purported budget increases to hire DOJ Criminal Division attorneys and FBI white-collar criminal agents and (2) referenced various “force multipliers” designed to expand the enforcement capabilities of the DOJ.

Garland said additional resources are needed to help the DOJ’s enforcement goals. The DOJ is seeking an additional $36.5 million to hire 120 additional attorneys for the U.S. Attorney’s Offices and the Criminal Division. The DOJ is also seeking $325 million to fund 900 FBI agents in support of the FBI’s White Collar Crime program.

Garland also announced three force multipliers: (1) partnerships between agencies, states and local governments; (2) data analysis; and (3) a defense attorney.

First, through increased partnerships such as interagency task forces, collaborations with inspectors general and parallel SEC investigations, Garland said interagency cooperation will significantly increase his agency’s reach. This approach could notably signal a change from the DOJ’s previous “anti-piling on” policy, which discouraged the parallel application of criminal laws to businesses by multiple regulators to avoid over-enforcement.

Second, Garland explained that the DOJ has expanded its use of big data, both internal and external, to identify payment anomalies indicative of fraud.

Third, Garland asked the defense attorney to join the DOJ’s efforts to fight fraud. Garland echoed the policy changes announced by the Deputy Attorney General of Monaco during the 36and Institute on White Collar Crime on October 28, 2021. He again highlighted the DOJ’s return to the 2015 “Yates Memorandum” standard for cooperation credit, requiring companies to provide information on all those involved in the relevant misconduct, regardless of degree of involvement, status or seniority. When fully implemented, this policy will be a change from the most recent co-op credit standard, which required companies to only disclose information about people “substantially involved” in misconduct.

Garland’s announcement is a change in policy

Garland’s opening statement continues a series of recent commitments by the Biden administration to strengthen crackdowns on corporate crime. Here are some key takeaways from this renewed guidance:

  • The path to obtaining co-op credit is more difficult. If a business is applying for a co-op credit, it must thoroughly investigate the conduct to persuade the DOJ that the business has fulfilled its obligation to identify and disclose all non-privileged information about all people.
  • Enhanced disclosure obligations are likely to amplify the scope and requirements of credible internal investigations. Therefore, companies may seek to avoid internal investigations and waive cooperation credit when they deem the burdens too onerous or the disclosure stakes too high. Similarly, the approaches and obligations of lawyers in internal investigations may further alter their scope. Under the interpretation of “all non-inside information,” the DOJ can pressure attorneys to release their interview notes or internal notes.
  • Companies must be proactive, follow clear and robust compliance programs that outline how they will deal with potential misconduct by their employees and officers and how they will meet potential disclosure obligations.

If you have any questions about the approach your company should take, please contact one of the authors of this article or your Foley attorney.

Harry L. Blanchard