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Last Wednesday, Principal Deputy Assistant Attorney General for the Criminal Division Marshall L. Miller at the Global Investigation Review Program addressed how the DOJ is handling criminal conduct when it takes place at corporations and other institutions. He discussed the evolving approach to such investigations and how DOJ decided to resolve charges against  corporations with criminal exposure – or whether to bring criminal charges at all.

 

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Miller explained that Corporations do not act criminally, but for the actions of individuals. With that said, he made it clear that DOJ "intends to prosecute those individuals, whether they’re sitting on a sales desk or in a corporate suite."

 

He said that although DOJ encourages cooperation, they do not rely upon internal investigations to make cases. As in any other type of case, they conduct their own active investigation of criminal misconduct at a corporation, even when an internal investigation is underway. The DOJ serve subpoenas, execute search warrants, interview witnesses, and use a host of other mechanisms to obtain evidence.

 

Today, DOJ is capitalizing on the cooperative relationships developed with foreign prosecutors, law enforcement and regulatory agencies to better access evidence and individuals located overseas. They have dramatically increased coordination with foreign partners when they are looking at similar or overlapping criminal conduct – so that when there are parallel investigations, they complement, rather than compete with, each other.

 

Mr. Miller stated plainly: "we would like corporations to cooperate.  We will ensure that there are appropriate incentives for corporations to do so. But if there is no cooperation, we will continue to investigate and prosecute the old-fashioned way. And companies will face the consequences. The last year has made crystal clear that DOJ will use every legal avenue to hold corporations responsible for criminal conduct. The guilty pleas from BNP Paribas and Credit Suisse, two of the world’s largest financial institutions, have demonstrated once and for all that  no institution is too large to prosecute."

 

Mr. Miller then turned to what the DOJ expects from corporate cooperation. He said that much as it treats mob cases involving snitches, voluntary disclosure of an internal investigation isn’t “true cooperation” under  its corporate prosecution principles if the company avoids identifying who is responsible for the alleged misconduct. Even identifying culpable individuals isn’t enough if the company fails to locate and provide evidence implicating them.

 

He explained that voluntary disclosure of corporate misconduct does not constitute true cooperation, if the company avoids identifying the individuals who are criminally responsible. Even the identification of culpable individuals is not true cooperation, if the company fails to locate and provide facts and evidence at their disposal that implicate those individuals.

 

In assessing how to treat corporations, DOJ carefully considers whether its law enforcement interests have been – or can be – met by the prosecution of culpable individuals. Conversely, in some cases, when prosecutions of culpable individuals are prevented, the government’s interest may only be vindicated by prosecuting the corporation itself. He cited the BNP Paribas and Credit Suisse cases as examples.

 

Just as importantly, if a corporation wants credit for cooperation, it must engage in comprehensive and timely cooperation; lip service simply will not do.

 

He warned that a company that tries to hide culpable individuals or otherwise available evidence behind inaccurately expansive interpretations of foreign data protection laws places its cooperation credit at great risk. Explaining that the DOJ will use its own parallel investigation to pressure test a company’s internal investigation: to determine whether the company actually sought to root out the wrongdoing and identify those responsible, as far up the corporate ladder as the misconduct goes, or instead merely checked a box on a cooperation punch list.

 

Companies that have not conducted comprehensive investigations will not secure significant cooperation benefits. Worse, companies that hamper the government’s investigation while conducting an internal investigation – for example, by conducting interviews that serve to spread corporate talking points rather than secure facts relating to individual culpability – will pay a price when they ask for cooperation credit.

 

He closed with specific pointers for corporate counsel:

  • If you want full cooperation credit, make your extensive efforts to secure evidence of individual culpability the first thing you talk about when you walk in the door to make your presentation.
  • Make those efforts the last thing you talk about before you walk out.
  • Make securing evidence of individual culpability the focus of your investigative efforts so that you have a strong record on which to rely.

If your company is considering Voluntary Disclosure, it is best that outside counsel, experienced in white collar criminal investigations assists you in the process.
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