DOJ’s focus on prosecuting white-collar criminals | The Volkov Legal Group
Well, we all know the familiar repetitive life experiences from the movie. groundhog day, or as I like to say, Deja Vu All Over Again. The DOJ repeatedly stresses the importance of prosecuting individuals for criminal conduct as the primary means of deterring future misconduct and ensuring corporate accountability.
The companies argue that levying large fines against them only punishes shareholders and other stakeholders who had nothing to do with the misconduct. To avoid this skewed enforcement system, the DOJ argues that aggressively prosecuting individuals is the most effective way to deter future misconduct and deter like-minded people from engaging in misconduct.
In a recent speech, Attorney General Garland recommitted to this approach in prosecuting white collar crimes, citing the impact of fraud, theft, bribery, bribery, criminality environment, market manipulation and anti-competitive agreements in free and fair markets. As A.G. Garland noted, “Corporate crime weakens our economic institutions by undermining public confidence in the fairness of those institutions.”
AG Garland noted that the DOJ will continue to hold companies accountable for their criminal conduct. But he explained that “I specified that [DOJ’s] The first priority in corporate criminal cases is to prosecute individuals who commit and profit from corporate wrongdoing. This is our first priority because companies act only through individuals. This is our first priority because the penalties imposed on individual offenders are felt by those offenders, rather than by shareholders or inanimate organizations.
The DOJ’s performance over the past 20 years in this area has been questionable at best. As I have noted many times, the DOJ’s inability to prosecute individuals in the wake of the 2008 financial crisis and subsequent corporate scandals (eg, the GM security scandal, the Boeing 737 MAX security scandal, BP Deepwater Horizon) has had a bad impact on our judicial system. Perhaps the low point of this process was Yates’ memorandum, which was a fanciful restatement of what every prosecutor should have already done – identify guilty individuals and mount criminal charges against them.
AG Garland’s speech brings us back to the loop again – and now we have to wait and see if anything will really be different. The bar is relatively low and that shouldn’t be a real problem.
Prosecutors relied on company attorneys to conduct and report on key internal investigations. By outsourcing these important investigations, prosecutors no longer do the substantive work and step-by-step investigation necessary to mount a criminal case against individuals. It takes hard work, requiring prosecutors to build cases, gain the cooperation of individuals, and build a case against senior executives.
Recognizing this reality, AG Garland commented on the difficulty and resource-intensive effort required to prosecute individuals rather than accept high-priced corporate dispositions. To implement this approach, AG Garland noted that the DOJ is seeking to increase its budget to increase criminal prosecutions against companies.
We will see, the proof will be in the results.