DOJ Announces Continued Focus on Curbing White Collar Crime

Expect to See More Individual Focus, Implementation of Novel Pilot Programs

Deputy Attorney General (DAG) Lisa Monaco recently delivered keynote remarks at the American Bar Association’s 39th National Institute on White Collar Crime. She announced that the Department of Justice (DOJ) would continue to “identify the most serious wrongdoers — individual and corporate” and that DOJ would “focus [their] full energy on holding them accountable,” doubling down on the Department’s renewed focus on corporate crime. DOJ continues to develop and implement new programs and strategies to ensure compliance and address wrongdoing. DAG Monaco outlined four DOJ priorities and programs calculated to identify, pursue, and deter corporate misconduct:

  • Balanced Incentive and Penalty Policies: For addressing corporate crime, DOJ seeks to create a framework where it is better for business if corporations disclose wrongdoing and cooperate with investigations. Over the next 90 days, DOJ will develop and implement a novel program where whistleblowers who provide information on corporate crime have the potential to receive a portion of any resulting forfeiture. While DOJ is interested in all corporate crime, it has trained its sights on: 1) criminal abuses of the U.S. financial system; 2) foreign corruption cases; and 3) domestic corruption cases. Other incentives include offering reduced penalties in cases where a company voluntarily discloses misconduct to DOJ and cooperates fully with investigations.
  • Individual Accountability for Corporate Misconduct: DOJ continues to prioritize individual accountability for corporate malfeasance. DAG Monaco described a “straightforward” approach to holding individuals as well as corporate entities responsible and stated that “those who break the law will pay the price.” To emphasize this point, DAG Monaco alluded to several recent high-profile instances where DOJ has successfully prosecuted individuals for corporate crimes and secured sentences of incarceration.
  • Increased Penalties for Corporate Recidivists: DOJ continues to factor previous misconduct in its recommendations for resolving cases involving corporate crime. While DOJ considers many factors, its central premise is that a fine cannot be a cost of doing business. Rather, it will recommend sanctions such that future misconduct is intolerable financially. DAG Monaco also indicated that DOJ will not create a habit of offering deferred prosecution agreements (DPA) to the same company more than once, especially when a company violates an existing DPA.
  • Updated Artificial Intelligence (AI) Policies: DAG Monaco highlighted efforts that DOJ is making to update guidance related to AI. Specifically, she made it clear that criminals who hide behind AI while committing crimes will not be safe from prosecution and may face sentencing enhancements. Significantly, DAG Monaco made clear that the mitigation of potential misuse of AI should be incorporated into compliance programs and announced that DOJ will add an assessment of these mitigative measures to its guidance on “Evaluation of Corporate Compliance Programs.”

Implications and Suggested Actions

  • The implementation of a financial reward system for whistleblowers could have profound effects on enforcement. For example, there are certain benefits companies can only secure by self-disclosing violations to DOJ. An employee or other individual disclosing such violations to DOJ before the company does may preclude the company from these otherwise available benefits.
    • This new framework should accelerate the timeline for a company to decide to self-disclose a violation.
    • Companies should track DOJ guidance on this novel program as it is developed and implemented.
    • Companies can expect a potential increase in whistleblower activity and should have policies in place to explore and respond to reported issues.
  • Companies should carefully understand any prior company misconduct. This includes not just information about what happened, but who was involved, the associated penalties, what actions were taken as a result of the violation, and more.
  • Companies should consider the risks of using AI and ensure that they account for those risks in updated corporate compliance plans.

Beveridge & Diamond’s Environmental Crimes, White Collar lawyers counsel firm clients on high-stakes enforcement and compliance matters, particularly in complex environmental investigations. The team’s expertise encompasses responding to search warrants, navigating grand jury subpoena responses, and negotiating with federal and state criminal agents and counsel to facilitate (when possible) early resolution of criminal inquiries. Our Environmental Crimes, White Collar team works closely with the firm’s Audits, Risk and Compliance Assessments practice group, and environmental subject matter practice groups to counsel companies on compliance management system design, assess and evaluate compliance risks, and prepare policies, procedures, and controls to manage and mitigate those risks.