Newsflash! DOJ Says It Wants To Prosecute Corporate Executives But It Is Ok Not To Prosecute Companies

Two recent appearances by high-ranking Department of Justice officials make clear that the target on corporate executives’ backs isn’t going away any time soon.  On May 3, 2013, the Criminal Division’s Acting Assistant Attorney General Mythili Raman offered remarks at a conference sponsored by the Corporate Crime Reporter.  She began by highlighting several recent DOJ victories, such as the conviction of Robert Allen Stanford, the work of the Deepwater Horizon Task Force, the Medicare Fraud Strike Force and the FCPA Unit.

After all the feel-good PR, Raman’s remarks were fascinating for the focus she placed on the Department’s efforts to target individuals in white collar criminal investigations.  She defended how the Department encourages cooperation by corporations, saying that DOJ “always put a premium on securing cooperation from corporate entities, because meaningful cooperation enables [DOJ] to hold criminally accountable to the fullest extent possible the widest possible range of bad actors, from individuals responsible for the criminal conduct to other business entities.”  As she put it, “a company’s cooperation – which can lead [DOJ] to critical information about wrongdoing by executives and employees – can absolutely make the difference as we assess whether there is proof beyond a reasonable doubt sufficient to charge an individual.”

And she said even more.

She gave a few examples of how the Department has used corporate cooperation as “a virtual roadmap of the criminal conduct” to charge individuals including the deferred prosecution agreement with BizJet International Sales and Support, Inc. and a non-prosecution agreement with Lufthansa Technik AG.  Those deals “laid the groundwork for [DOJ] to bring felony charges against high-ranking corporate executives.”  The Department used that cooperation to charge four former executives with foreign bribery.  So, in those examples, the companies were not charged with any criminal offense; but the individuals were.  It’s no secret to white collar defense lawyers that this is a common pattern.

Raman’s remarks were echoed by those of Denis McInerney, the Criminal Division’s Deputy Assistant Attorney General.  McInerney’s remarks were reported by Corporate Crime Reporter.  McInerney was on a panel to discuss DOJ’s use of deferred and non-prosecution agreements.  McInerney defended the use of the agreements because they “incentivize companies to do all the things that [DOJ] want[s] them to do, especially starting with disclosing the misconduct when it is uncovered, and then going through the cooperation they can provide in us getting to the people who engaged in the misconduct.”

No question, the Department of Justice wants to prosecute corporate executives (and other employees).  And it should, when those executives are the ones who committed the crime.  The old adage is true—a company is made up of people.  So if the company broke the law, then some identifiable individual must be to blame.  This all makes sense, right?  It all makes sense until you are the corporate executive who worked hard for your company for years only to watch its board of directors crumble at the first sign of a criminal investigations and start pointing fingers your way.  And it all makes sense when the only rational response for a company under investigation is to provide a “virtual roadmap” to the government to prosecute its own leadership.  DPA and NPAs may provide the right “incentives” for companies to help the government do its job but they certainly don’t provide the right “incentives” to create a healthy relationship between executives and their boards of directors.

This entry was posted in Deferred Prosecution Agreement, DOJ Statements, Non-Prosecution Agreement. Bookmark the permalink.

One Response to Newsflash! DOJ Says It Wants To Prosecute Corporate Executives But It Is Ok Not To Prosecute Companies

  1. Pingback: Four WellCare Health Plan Execs Found Guilty of Health Care Fraud | Grand Jury Target

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s