DOJ Issues Guidance on Cooperation In False Claims Act Investigations
On May 7, 2019, the Department of Justice (“DOJ” or “the Department”) issued formal guidance to DOJ’s False Claims Act (“FCA”) litigators on the circumstances in which DOJ will grant credit for cooperation during FCA investigations. The guidance explains the factors that DOJ considers in determining whether to award cooperation credit in FCA investigations and the types of credit available.
Under the guidance, cooperation credit in FCA cases may be earned by voluntarily disclosing misconduct unknown to the government, cooperating in an ongoing investigation or undertaking remedial measures in response to a violation of the FCA. Aside from taking these steps, a company may receive at least partial credit by identifying individuals with relevant information about the conduct, preserving relevant documents and information beyond existing business practice or legal requirements, and assisting in an ongoing investigation by disclosing relevant facts, among others. Cooperation credit will take the form of reducing the penalties or damages multiple sought by the DOJ. The maximum credit that a defendant receives may not surpass the amount of full compensation the government would receive for losses caused by the defendant’s misconduct. This amount includes government damages, lost interest, costs of investigation and relator share. Continue reading →
In a recent speech at the annual ABA White Collar Crime Conference in New Orleans, Assistant Attorney General Brian Benczkowski of the Criminal Division of the Department of Justice (“DOJ”) announced certain changes to the FCPA Corporate Enforcement Policy (“the Enforcement Policy” or “Policy”) to address issues that the DOJ had identified since its implementation. These and other recent updates have since been codified in a revised Enforcement Policy in the Justice Manual.
The Enforcement Policy, first announced by the DOJ in November 2017, was initially applicable only to violations of the FCPA, but was subsequently extended to all white collar matters handled by the Criminal Division. The Policy was designed to encourage companies to voluntary self-disclose misconduct by providing more transparency as to the credit a company could receive for self-reporting and fully cooperating with the DOJ. Among other things, the Enforcement Policy provides a presumption that the DOJ will decline to prosecute companies that meet the DOJ’s requirement of “voluntary self-disclosure,” “full cooperation,” and “timely and appropriate remediation,” absent “aggravating circumstances” – i.e. relating to the seriousness or frequency of the violation. For more information on the Enforcement Policy, read our blog post explaining it.
The most significant recent changes to the Enforcement Policy include eliminating the prohibition on a company’s usage of ephemeral instant messaging applications to receive full credit for “timely and appropriate remediation.” Additionally, the modified Enforcement Policy (1) now makes clear that one requirement of cooperation, de-confliction of witness interviews, should not interfere with a company’s internal investigation; (2) confirms based on an earlier announcement, that the Policy applies in the context of a merger and acquisition (“M&A”), if an acquiring company discovers and self-discloses misconduct in a target; and (3) implements a change announced months before by the Deputy Attorney General that a company only needed to provide information about individuals “substantially involved” in the offense. These changes are discussed in greater detail below. Continue reading →
In a significant development for companies relating to the Foreign Corrupt Practices Act (FCPA), in late November the U.S. Department of Justice (DOJ) announced a new FCPA Corporate Enforcement Policy (the Enforcement Policy).
The Enforcement Policy is designed to encourage companies to voluntarily disclose misconduct by providing greater transparency concerning the amount of credit the DOJ will give to companies that self-report, fully cooperate and appropriately remediate misconduct. Notably, in announcing the Enforcement Policy, the DOJ highlighted the continued critical role that anti-corruption compliance programs play in its evaluation of eligibility under the Enforcement Policy. Continue reading →