Category Archives: Prosecutorial Diversion: DPAs and NPAs

DOJ Announces Compliance Certifications to Be Considered as Part of Corporate Criminal Resolutions

by Greg D. Andres, Uzo Asonye, Martine M. Beamon, Angela T. Burgess, Robert A. Cohen, Daniel S. Kahn, Tatiana R. Martins, Fiona R. Moran, Paul J. Nathanson, and Patrick S. Sinclair

In a pair of speeches, the Assistant Attorney General of DOJ’s Criminal Division emphasized its focus on compliance and announced that he has instructed his prosecutors to consider requiring chief executive officers and chief compliance officers to certify to (1) the accuracy of annual reports submitted pursuant to corporate resolutions, and (2) the effectiveness of their company’s compliance program prior to releasing the company from its obligations under a resolution agreement.

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Priorities, Trends and Developments in Enforcement and Compliance

by Joon H. Kim, Matthew C. Solomon, Victor L. Hou, Lisa Vicens, and Samuel Levander

2021 was a year of transition for white-collar criminal and regulatory enforcement. As courthouses reopened and trials resumed, newly-installed heads of law enforcement authorities looked to reset priorities and ramp up enforcement in the first year of the Biden administration. Policy priorities shifted toward enforcement against sophisticated financial institutions, corporates and their executives, in contrast to the previous administration’s focus on retail investors and schemes with identifiable victims. While the shift at the SEC was more immediately visible with major new enforcement priorities, investigations and resolutions, the DOJ adopted policies and announced new initiatives that will likely only find expression in 2022.

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Second Circuit Reverses LIBOR Convictions

by John F. Savarese, David B. Anders, Sarah K. Eddy, and Remy Grosbard

In a careful but blunt opinion (PDF: 3.3 MB) yesterday, the Second Circuit reversed the convictions of two Deutsche Bank derivatives traders charged with wire fraud for manipulating LIBOR. The decision underscores that not all conduct deemed unfair is criminal, and represents the latest blow to a theory of criminal liability that DOJ has invoked to extract billions of dollars in penalties from financial institutions—all before the theory’s viability could be tested in the courts. 

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A Historic First in Consumer Product Safety Act Enforcement: Corporate Criminal Penalties for Late Reporting Under Section 15

by Kelsie Sicinski, Michelle F. Gillice, Jennifer A. Karmonick, and Murad Hussain 

On October 29, the status quo fundamentally changed for consumer product safety enforcement. On that date, the Department of Justice (DOJ) announced the resolution of criminal charges against a Chinese manufacturer and its two subsidiaries under the Consumer Product Safety Act (CPSA). This was the very first corporate criminal enforcement action brought under the CPSA, which resulted in a guilty plea from the US subsidiary, a deferred prosecution agreement (DPA) for the Chinese parent and its Hong Kong subsidiary, and $91 million in monetary penalties and forfeitures. This development makes clear that an intentional delay in reporting a consumer product safety defect, hazard, or risk to the Consumer Product Safety Commission (CPSC) has the potential to lead to both civil and criminal corporate liability under the CPSA.

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Carlin Speech Signals DOJ White Collar Enforcement Priorities

by Greg Andres, Uzo Asonye, Martine Beamon, Robert Cohen, Daniel Kahn, Tatiana Martins, Paul Marquardt, Fiona Moran, Paul Nathanson, and Daniel Stipano

Principal Associate Deputy Attorney General John Carlin previewed the Department of Justice’s (“DOJ”) refocused corporate enforcement efforts during a speech on October 5, 2021 at GIR Connect: New York.  Carlin’s speech underscored the primary levers a new administration can pull to quickly and meaningfully impact the white collar enforcement space: messaging increased white collar enforcement to relevant stakeholders, instituting new and revising existing policies, creating dedicated taskforces, and increasing resources for white collar enforcement.  Carlin addressed each of these categories by outlining key DOJ priorities, including increased enforcement related to sanctions, export controls, and cryptocurrency; continued expansion of international cooperation and coordination; a “surge” in resources, exemplified by a new dedicated FBI squad for Foreign Corrupt Practices Act (“FCPA”), market integrity, and health care fraud investigations; an upcoming review and revision of corporate enforcement policies; continued and increased use of data-driven enforcement techniques; enhanced and expanded international cooperation; and a warning regarding companies’ compliance with subpoenas and the terms of resolution agreements.

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What’s Old Is New Again: DOJ’s New Corporate Criminal Enforcement Policies Equip Prosecutors with More Tools and Information

by Alicyn Cooley and Matthew Levine 

The approach of the Biden Justice Department to corporate and financial crime continues to emerge—or re-emerge. Corporations with federal criminal exposure must now, again (PDF: 463 KB), provide information on all individuals responsible for misconduct in order to receive cooperation credit from the Department of Justice. And corporations which resolve that exposure pursuant to Deferred Prosecution Agreements (DPAs) or Nonprosecution Agreements (NPAs) with DOJ will also now face the increased likelihood of independent monitorships—the use of which waned considerably in recent years, even before the Trump administration explicitly discouraged imposing them in 2018 (PDF: 4.9 MB).

In keynote remarks delivered yesterday at the American Bar Association’s National Institute on White Collar Crime, Deputy Attorney General Lisa Monaco announced these and other new DOJ policies and initiatives, all of which are reminiscent of the Obama Administration’s approach to corporate criminal enforcement. In particular, companies and practitioners should take note of DOJ’s stated commitments to: (1) equipping prosecutors with more information and tools—including monitors—to root out corporate crime and ensure corporations comply with the law and the requirements of their agreements with DOJ; (2) proactively using data accumulated about past corporate resolutions, including taking into account corporations’ full criminal and regulatory histories; and (3) standardizing approaches to corporate enforcement across DOJ and the U.S. Attorneys’ Offices.

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Will They Finally Test Compliance?

by Brandon L. Garrett

Compliance continues to be an important aspect of settlements in corporate prosecutions. In a recent article, “Testing Compliance,” Greg Mitchell and I argue that neither companies, but particularly not government regulators and enforcers, should treat compliance as “hope-based,” where they ask whether it seems well-intentioned or likely to comply with best practices. Instead, they should empirically test compliance to find out whether it in fact works. It is understandable that companies do not generate self-critical testing data, when government does not require it. But it is most troubling of all that governments have not incentivized generation of information about what actually works.

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France Moves to Boost Its White Collar Enforcement

by Antoine F. Kirry, Alexandre Bisch, Aymeric D. Duoulin, Fanny Gauthier, and Karolos Seeger

On July 7, 2021, a French National Assembly Committee led by MPs Raphaël Gauvain and Olivier Marleix, published a long-awaited 180-page evaluation report about France’s anti-corruption law of December 9, 2016 (the so-called “Sapin II Law”)[1]. While recognizing the significant progress made by France in its fight against corruption and tax fraud over the last five years, MPs suggest further strengthening the existing legal framework. Their 50 recommendations cover various topics, including the French-style deferred prosecution agreement; the self-reporting of corporate crimes; corporate criminal liability criteria; the introduction of a new pre-trial guilty plea; French extra-territorial enforcement of corruption crimes; and the role of the French anti-corruption agency. We provide below the main highlights of the report.

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Bank Julius Baer Agrees to Pay More Than $79 Million for Role in FIFA Money Laundering

by Jonathan J. Rusch 

Over the past decade, the Fédération Internationale de Football Association (FIFA) has been embroiled in several overlapping scandals associated with a reported $150 million in bribery related to FIFA and regional soccer-federation officials.[1]  Investigations by U.S. and Swiss authorities to date have led to criminal charges against numerous individuals (including former FIFA and other soccer-federation, sports-marketing, and media executives) and companies,[2] as well as a deferred prosecution agreement (DPA) with an Israeli bank that required the bank to pay more than $340 million for its role in laundering tens of millions of dollars in bribe payments to corrupt soccer officials in multiple countries.[3]

The latest development in the long-running scandal occurred on May 27, when the U.S. Department of Justice announced that a leading Swiss bank, Bank Julius Baer, had agreed to enter into a deferred prosecution agreement (DPA) requiring it to pay more than $79 million in penalties and to admit that it conspired to launder more than $36 million in bribes through the United States to soccer officials with FIFA and other soccer federations.[4] Continue reading →

To Fix Corporate Crime, Write a Statute

by Miriam Baer

For scholars, jurists and other observers, the body of doctrines collectively known as “corporate criminal law” continues to generate questions about its provenance and mission. Is it just another form of criminal punishment, whose weaknesses mirror the weaknesses we encounter throughout the criminal justice system generally? Or is it so different in design and execution that it functions as something wholly different from criminal law, prompting its own set of first principles and challenges? Should we think of corporate criminal law as a form of regulation, as just another manifestation of criminal law, or as something more transformative that can be used to spur systemic changes in how our society relates to the private sector and to government generally?

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