US encourages companies to report criminal misconduct in new nationwide policy
NEW YORK - The U.S. Justice Department is rolling out a policy across divisions to encourage companies to report criminal misconduct in exchange for reduced penalties and other benefits, according to a DOJ memo shared with Reuters on Tuesday.
The policy, similar to one already offered by the DOJ’s criminal division in Washington, would for the first time apply across U.S. attorneys’ offices and divisions, except for antitrust cases. The change marks an effort to address criticism that cooperation benefits have been inconsistent in the past.
The new policy, detailed in a memo published on Tuesday, will offer tiers of reduced penalties for companies that report criminal misconduct and cooperate with government investigators. Reuters was first to report the new policy.
“Well-intentioned businesses know that, across the Department, they will be rewarded when they self-disclose wrongdoing, cooperate with our investigations, and remediate the misconduct,” Deputy Attorney General Todd Blanche said in a statement.
“But for those that do not, make no mistake - we will not hesitate to seek appropriate resolutions against companies and individuals alike that perpetrate white collar offenses that harm American interests.”
The DOJ will encourage prosecutors to decline prosecution of companies that report misconduct previously unknown to the DOJ and that fully cooperate, according to the memo. Those companies will have to pay restitution to victims and return ill-gotten gains, but will not be fined, nor be subject to a third-party monitor.
For firms that report issues already known to the DOJ, prosecutors would offer a deal promising not to prosecute so long as certain conditions are met over a specific timeframe. They would also see penalties reduced by 50% to 75% and avoid monitorship, the memo said.
Companies can receive discounted penalties of up to 50% in exchange for cooperation and remediation, even if they do not self report, the memo said.
The new program will supersede similar policies that U.S. attorneys’ offices have had.