“Carrots and Sticks”: Individual Accountability in Enforcing Corporate Criminal Laws Remains a Top DOJ Priority

“We expect our enforcement activity to only accelerate as we emerge from the pandemic.”

– Attorney General Merrick B. Garland

On March 3, 2022, at the 37and Annual of the American Bar Association’s Criminal Justice Section National Institute on White Collar Crime in San Francisco, Attorney General Merrick B. Garland stressed that “prosecuting corporate crimes is a priority of the Department of Justice.” In 2021, US prosecutors’ offices charged 5,521 people with white-collar crimes, a 10% increase from 2020. In 2021, the Department of Justice’s (DOJ) Fraud Section publicly charged 333 people , sentenced 296 people by plea, judged 23 cases in court. 18 districts and obtained the conviction of 30 people during the trial. Attorney General Garland has made it clear that this upward trend will continue: “The Department’s first priority in corporate criminal cases is to prosecute individuals who commit and profit from corporate wrongdoing” because these cases offer ” the best deterrent against corporate crime”.

As a result, Attorney General Garland announced that the DOJ was pooling its resources to enable it to successfully prosecute corporate crimes. These efforts include:

  • A 2022 budget increase for the Department of Justice’s corporate criminal enforcement efforts that will expand to 94 U.S. law firms, as well as the criminal, antitrust, tax, and environmental divisions.
  • An additional $36.5 million for U.S. prosecutors’ offices and the Criminal Division to bolster efforts to combat “pandemic-related fraud.”
  • The hiring of 120 additional attorneys to carry out the Department of Justice’s mission to fight white-collar crime, in addition to the 34 attorneys in the Criminal Division’s Fraud Section hired in 2021.
  • An additional $325 million to fund over 900 FBI agents to support the FBI’s white-collar crime agenda.

Attorney General Garland described the following efforts as “force multipliers for our prosecutors and agents” and focused on:

  • Partnerships at all levels of government and around the world.
  • An interagency task force tasked with holding accountable Russian oligarchs and others who seek to evade US sanctions or profit from corrupt conduct.
  • A Chief Prosecutor to lead specialized teams dedicated to fighting pandemic fraud and complementing the efforts of the COVID-19 Fraud Fighting Task Force that was created last May. The task force, led by the deputy attorney general, includes nearly 30 agencies that administer and oversee pandemic relief funding, including the Department of Labor, Department of the Treasury, Small Business Administration, U.S. Postal Inspection Service and the Pandemic Response Accountability Committee.
  • An increased role for inspectors general across the federal government to identify perpetrators of health care fraud, procurement fraud, and “any other type of fraud related to government programs.”
  • Strengthened partnerships with the SEC on everything from securities fraud to violations of the Foreign Corrupt Practices Act (FCPA), as well as with the Commodity Futures Trading Commission (CFTC), the Centers for Medicare & Medicaid Services (CMS ), the Defense Criminal Investigative Service (CIS) and the Internal Revenue Service (IRS).
  • Using data analytics to identify payment anomalies that are indicative of fraud.
  • A new team of FBI agents integrated into the Criminal Division’s Fraud Section to further strengthen its ability to bring data-driven corporate crime cases nationwide.

Attorney General Garland also reiterated earlier restored DOJ guidance that clearly states that, to be eligible for any cooperation credit, companies must provide the Department of Justice with all non-inside information about those involved in or responsible for the wrongdoing. causes. “It means all individuals, regardless of position, status or seniority, and regardless of whether a company considers their involvement to be ‘substantial,'” Attorney General Garland said.

Assistant Attorney General Kenneth A. Polite, Jr. also recapped this point in his opening remarks at the conference: people. When you are asked about corrective action, and you are asked about company management and personnel, we do so to ensure individual accountability.

Here are five key takeaways from these important Department of Justice criminal law enforcement announcements:

  • Expect a crackdown on all forms of pandemic-related fraud, particularly with respect to CARES (Coronavirus Aid, Relief, and Economic Security Act) programs such as the Check Protection Program. payroll and supplier relief fund, continues.
  • The Department’s Antitrust Division is back – and investigating and prosecuting price fixing and other criminal offenses. Last year, the Division filed 25 criminal cases against 29 individuals and 14 corporations, and had “146 grand jury investigations – the most in 30 years.” The Antitrust Division is currently trying or preparing to try 18 indicted cases against 10 companies and 42 people, including 8 current or former CEOs or company presidents.
  • Expect more investigations and prosecutions from the Department of Justice’s Environment and Natural Resources Division, which also “prioritizes the investigation and prosecution of those who commit and benefit from corporate environmental malfeasance”. The Division is currently trying or about to try 11 indicted cases against 11 companies and 34 individuals – including 14 current and former company executives – for a wide range of environmental criminal offenses.
  • Womble Bond Dickinson predicted many of these app trends last year. Businesses and individuals should be aware of these areas of application and of a continued DOJ focus on corruption, particularly in Latin America, healthcare fraud, criminal taxation, and cyber crimes. Strong compliance programs must be top-down, with C-suite leaders emphasizing the importance of compliance. In the event of a problem, the first call should always be legal counsel, and every business should have a plan in place to deal with a possible criminal investigation. An active crisis is not the time to formulate a plan.
  • More importantly, Attorney General Garland’s remarks echoed the Deputy Attorney General’s October announcements and reflected a return to earlier DOJ guidance on seeking individual accountability in corporate criminal enforcement. The Attorney General warned that “enforcement activity will only accelerate as we emerge from the pandemic.
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