Overview
Over the past year, the US Department of Justice (DOJ) and other regulators have issued a series of new policies, guidance and initiatives aimed at curbing corporate misconduct. Several of these efforts have sought to encourage companies and individuals (i.e., whistleblowers) to voluntarily self-disclose criminal misconduct not already known to regulators or the public.
During our first webinar in the 2024 Enforcement Outlook webinar series, Ted Diskant and Sarah Walters examined DOJ’s current compliance and enforcement priorities, what they mean for your business and what you should consider doing now in light of the updated DOJ policies and guidance.
Below are top takeaways from the discussion.
- 2023 Enforcement Policies and Guidance
- February 2023:DOJ released a voluntary self-disclosure policy applicable to all 93 US Attorneys’ Offices (USAOs).
- March 2023: DOJ’s Criminal Division announced a first-ever three-year pilot program regarding compensation incentives and clawback.
- March 2023: In addition to the pilot program, DOJ updated its guidance to prosecutors regarding the evaluation of corporate compliance programs.
- October 2023: Deputy Attorney General Lisa Monaco announced a new DOJ-wide safe harbor policy for voluntary self-disclosures made in connection with mergers and acquisitions.
- January 2024: The US District Court for the Southern District of New York (SDNY) announced a new whistleblower pilot program to encourage voluntary self-disclosure of certain nonviolent criminal misconduct by individuals aware of certain types of criminal offenses.
- Lessons Learned: Declinations and Enforcement Actions from 2023
- HealthSun Health Plans Inc. (Declination):In October 2023, DOJ announced that it declined to prosecute HealthSun Health Plans Inc. (HealthSun) in connection with a fraudulent scheme to defraud the Medicare Advantage program. DOJ issued a declination in part due to HealthSun’s timely and voluntary self-disclosure of the misconduct.
- Lifecore Biomedical Inc. (Declination): In November 2023, DOJ announced that it declined to prosecute Lifecore Biomedical Inc. (Lifecore), f/k/a Landec Corp., a US-based manufacturing company, in connection with alleged Foreign Corrupt Practices Act (FCPA) violations involving agents of Lifecore’s Mexican subsidiary. DOJ issued a declination in part due to Lifecore’s timely and voluntary self-disclosure of the misconduct.
- Corsa Coal Corp. (Declination): In November 2023, DOJ announced that it declined to prosecute Corsa Coal Corp. (Corsa) in connection with alleged FCPA violations between 2016 and 2020. DOJ issued a declination in part due to Corsa’s timely and voluntary self-disclosure of the misconduct as well as remediation efforts undertaken, including enhancements to the company’s compliance program.
- Freepoint Commodities (DPA): In December 2023, DOJ entered into a three-year deferred prosecution agreement (DPA) with Freepoint Commodities LLC (Freepoint) to resolve allegations that its agents bribed Brazilian government officials at state-owned oil company Petrobras. Notably, Freepoint did not receive voluntary disclosure credit, though it did receive cooperation and remediation credit.
- SAP SE (DPA): In January 2024, DOJ entered into a three-year DPA with SAP SE to resolve allegations of bribery of government officials in South Africa and Indonesia between 2013 and 2018. DOJ imposed a nearly $120 million criminal penalty and an administrative forfeiture of over $100 million. However, pursuant to the clawback pilot program, DOJ reduced SAP’s criminal penalty by approximately $100,000.
- The Year Ahead: Priorities for 2024
- DOJ is making a concerted effort to tout the benefits of voluntary, timely self-reporting to companies and individuals that promptly disclose corporate misconduct and meet certain criteria. SDNY is even going so far as to offer potential whistleblowers full immunity from prosecution under certain circumstances. Other USAOs may follow suit.
- Increasingly, DOJ is expecting that new and revised policies and guidance – for example, DOJ’s policy update regarding the use of ephemeral messaging applications (g., Telegram, Signal) – are incorporated into companies’ compliance programs.
- This year, expect DOJ’s Health Care Fraud Unit to step up activity, consistent with its focus on healthcare fraud as a top enforcement priority, and for sanctions and export controls enforcement to remain a key area of focus for DOJ.
Check out past recordings and materials from our Enforcement Outlook webinar series.
