Federal Criminal Investigations – Biden Justice Department Focuses on Prosecution of Criminal Corporate Misconduct | Fox Rothschild LLP

The recent remarks made to the National White Collar Criminal Defense Institute of the American Bar Association by Deputy Attorney General Lisa O. Monaco serve as a clear warning to businesses that Biden’s Justice Department will demand prosecutions against individuals who fail to act. are engaged in acts of criminal misconduct during the resolution of its investigations.

In the later years of the Obama administration, then Deputy Attorney General Sally Yates issued a memorandum highlighting that if a company sought to cooperate with the Department of Justice to resolve a federal criminal investigation into a company, it should identify the individuals within the company who were personally responsible for the misconduct and provide the Department of Justice with evidence to support the prosecution of that person. Yates’ memorandum has been widely criticized because of the conflict of interest it could create between the company and its officers and employees. The ministry’s emphasis on detecting individual wrongdoing in this way could lead the company to become a branch of the Department of Justice in the conduct of federal criminal investigations. Several high-profile federal lawsuits have been infected by corporate lawyers acting too aggressively against the company’s own officers and employees in an attempt to persuade the Department of Justice to resolve the company’s investigation.

The Trump administration, through then Deputy Attorney General Rod Rosenstein, issued guidelines that removed the focus on pressuring companies to refer individuals to the Department of Justice for the purpose of solving a criminal investigation. In its speech of October 28, Monaco returned to the emphasis placed by the Yates Memorandum on seeking individual malpractice lawsuits. Indeed, the Monaco guidelines seem to place even more importance on individual prosecutions than the Yates Memorandum.

Monaco informed the Federal Bar that the Justice Department will provide more resources and support, including dedicated agents, to help prosecutors uncover and prosecute the most sophisticated corporate criminals. For example, a new squad of FBI agents will be dedicated exclusively to the Criminal Fraud Section of the Department. Monaco also stressed that the Department will review and assess a company’s past misconduct, even if they are not related to the ongoing investigation, to decide on an appropriate resolution of the investigation. The Department will work closely with other federal and state regulators to understand the extent of a company’s past misconduct. Monaco said a record of past corporate misconduct may reflect a company’s lack of commitment to compliance programs and the appropriate culture to deter criminal activity. In addition, Monaco stressed that the Department would seek to make more use of company monitors than the previous administration, as a method of monitoring companies’ compliance with the resolution of a criminal investigation, in particular in the context of the agreements of prosecution or non-prosecution which are commonly used. to resolve such inquiries.

What can businesses expect next

Monaco’s remarks leave no doubt that the companies and their executives will come under scrutiny from the government. Significant resources will be devoted to the fight against corporate crime. Monaco specifically stated that “our mission must remain the same – to enforce the criminal laws that govern companies, executives, officers and others … the first priority of this department in corporate criminal matters to prosecute the individuals who commit and shoot profit from corporate embezzlement.

To avoid being in the crosshairs of a criminal investigation, businesses should work with a lawyer to ensure they demonstrate their commitment to compliance programs and work to root out criminal activity. In addition, if an officer or employee of the company must be questioned by a company lawyer in connection with allegations of misconduct and / or in response to a criminal investigation, the lawyer should ensure that they are protected. rights of the individual, including consideration of advising the officer or employee of their right to use individual counsel. The conflict of interest that can be created by the Department of Justice’s expectation that corporate lawyers will identify individual perpetrators to the government and provide evidence that the Department of Justice can use to prosecute the case. individual, requires a cautious approach to these internal investigations.

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Mark M. Gagnon