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- Department of Justice (DOJ)
- False Claims Act
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- Consumer Protection
- White Collar & Investigations
- Anti-Kickback Statute
- Cooperation Credit
- Medicare Fraud
- Bank Exam Privilege
- Paycheck Protection Program
- Stark Law
White Collar + Fraud + Investigations + Compliance
This week, the U.S. Department of Justice (“DOJ”) announced the implementation of a Voluntary Self-Disclosure Policy (the “VSD Policy”). The DOJ declared that U.S. Attorney’s Offices throughout the nation will offer benefits to companies that voluntarily and timely disclose misconduct. Effective immediately, the VSD Policy details the parameters and criteria for voluntary self-disclosure of misconduct. Under the VSD Policy, a company is considered to have made a voluntary self-disclosure if it is aware of misconduct prior to being publicly reported and timely discloses all relevant facts to a U.S. Attorney’s Office. A company that meets this criteria and remediates the criminal conduct will experience significant benefits including the U.S. Attorney’s Office not seeking a guilty plea or imposing a criminal penalty.
Before the VSD Policy, companies would face uncertain results when disclosing misconduct to U.S. Attorney’s Offices. Now, they will see the potential benefits of disclosure and cooperation. The VSD Policy provides for consistent application and more predictability: a desired result for companies contemplating whether to disclose misconduct. Notably, the VSD Policy comes months after Deputy Attorney General Lisa Monaco initially announced changes to the DOJ’s Corporate Criminal Enforcement Policies (the “Monaco Memo”), emphasizing the importance of holding individuals accountable for corporate wrongdoing. The Monaco Memo reflected the DOJ’s commitment to consistency across the DOJ in the context of corporate criminal enforcement matters. Individual accountability has been a long-standing priority of the DOJ and, similarly, for some time, the DOJ has encouraged companies to timely disclose findings of individual misconduct. That said, prior to the Monaco Memo, a recommendation related to individual misconduct was largely within the discretion (and judgment) of the prosecutor—a choice which could undoubtedly lead to inconsistent charging decisions. Now, according to the Monaco Memo, prosecutors are required to assess whether a corporation provided cooperation in a timely fashion in connection with every corporate resolution. In particular, the Monaco Memo states that “[w]here prosecutors identify undue or intentional delay in the production of information or documents—particularly with respect to documents that impact the government’s ability to assess individual culpability—cooperation credits will be reduced or eliminated.” In other words, the DOJ warns that companies simply cannot drag their feet in producing documents and information related to the individual culpability of employees and still expect to receive cooperation credits that reflect a different reality. Along those same lines, the new VSD Policy furthers that effort by implementing uniform and transparent criteria among U.S. Attorney’s Offices. The new VSD Policy is a clear attempt to depart from the previous case-by-case approach. Instead of an office-by-office standard, the VSD Policy promises consistency in application across all offices.
Likewise, not only is the new VSD Policy consistent with the intent of the Monaco Memo, it also aligns with the interests of companies that seek clarity regarding corporate disclosure, generally. The VSD Policy further explains the cooperation framework for companies that are weighing whether cooperation and disclosure is within the company’s best interest. Hopefully, with this type of uniformity, companies can feel more comfortable engaging with Criminal AUSAs and Main Justice.
Both the Monaco Memo and the VSD Policy incentivize companies to identify and disclose misconduct with the expectation that those companies will be given opportunities to cooperate and remediate. Whether a matter of fate or by design, a belated disclosure can have a cognizable impact on the DOJ’s ability to assess individual accountability. A belated disclosure in that context could significantly impact the DOJ’s investigation and inhibit individual accountability for various reasons including, the expiration of the statute of limitations and the dissipation of corroborating evidence. The hope of the DOJ is that companies will take advantage of this new VSD Policy, allowing the DOJ to do its work in holding individuals accountable for wrongdoing.
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Denise Barnes is a former U.S. Department of Justice (“DOJ”) Trial Attorney who focuses her practice on compliance, white collar and regulatory investigations, and complex commercial litigation. She represents clients in ...
Jewel Haji Boelstler is an attorney in the litigation department who concentrates her practice on complex commercial litigation matters and white collar investigations. She has experience conducting internal investigations ...