On June 17, 2019, in a decision interpreting the Fifth Amendment’s Double Jeopardy Clause, the United States Supreme Court in Gamble v. United States upheld the doctrine of dual-sovereignty.[1] In doing so, the Court confirmed that one sovereign may prosecute a defendant under its laws even if another sovereign has already prosecuted the defendant for the same conduct, notwithstanding the Fifth Amendment’s prohibition against multiple prosecutions for the “same offence.”[2] While Gamble does not represent a shift in the law, the Court’s opinion has implications for companies facing parallel investigations by the Department of Justice (“DOJ”) and other prosecutors, whether state or foreign authorities.
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Supreme Court Rules in Favor of Longer Time Limits for Non-intervened FCA Actions
On May 13, 2019, the Supreme Court issued its opinion in Cochise Consultancy, Inc. v. United States ex rel. Hunt with respect to the applicable statute of limitations in a FCA action in which the Government has declined to intervene. The FCA sets forth two limitation periods applicable to FCA actions and provides that an action must be brought within the longer of either (i) within 6 years after the date on which the violation occurred; or (ii) within three years of the date when facts material to the right of action are known or reasonably should have been known by a relevant official of the United States. In no event may an action be brought more than 10 years after the date on which the violation was committed. The issues in Cochise Consultancy were whether the second, alternative, limitations period applies to an action in which the government has intervened and whether, if so, the relevant official includes the private relator. These issues are important because, if the longer period applies, a relator can bring an action long after (and more than 3 years after) she learned of the FCA violation.
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DOJ Issues Guidance on Cooperation In False Claims Act Investigations
On May 7, 2019, the Department of Justice issued formal guidance to DOJ’s False Claims Act 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.
DOJ Guidance on Corporate Compliance Programs: A Checklist for Directors
As discussed in our most recent blog post, on April 30, 2019, the Criminal Division of the U.S. Department of Justice (“DOJ” or “the Department”) announced updated guidance for the Criminal Division’s Evaluation of Corporate Compliance Programs (“the Guidance”). The Guidance is relevant to the exercise of prosecutorial discretion in conducting an investigation of a corporation, determining whether to bring charges, negotiating plea or other agreements, applying sentencing guidelines and appointing monitors.[1] The Guidance focuses on familiar factors: the adoption of a well-designed compliance program that addresses the greatest compliance risks to the company, the effective implementation of the company’s compliance policies and procedures, and the adequacy of the compliance program at the time of any misconduct and the response to that misconduct. The Guidance makes clear that there is no one-size-fits-all compliance program and that primary responsibility for the compliance program will lie with senior and middle management and those in control functions.
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DOJ Updates Guidance for Evaluating Corporate Compliance Programs
On April 30, 2019, the Criminal Division of the U.S. Department of Justice announced updated guidance for the Criminal Division’s Evaluation of Corporate Compliance Programs (“the Guidance”) in charging and resolving criminal cases. This memorandum highlights key updates and discusses the themes present across versions of the Guidance. Overall, this newest version places greater emphasis
DOJ Updates FCPA Corporate Enforcement Policy
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.[1] These and other recent updates have since been codified in a revised Enforcement Policy in the Justice Manual.[2]
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.[3] 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 here.
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U.S. Criminal Prosecution Based on Panama Papers Hack Raises Novel Legal Issues
Nearly a decade ago, WikiLeaks ushered in the age of mass leaks. Since then, corporations, governments, public figures and private entities have increasingly had to reckon with a new reality: that vigilantes, activists, extortionists and even state actors can silently steal and rapidly disseminate proprietary information, including customer data and other sensitive information. Last month, the Department of Justice (“DOJ”) indicted four individuals based on information first revealed in the “Panama Papers” leak. This marks a significant milestone in law enforcement’s reliance on evidence based on an unauthorized mass leak of information. While leaks and hacks are not a novel phenomenon—in 1971, the New York Times published top secret documents on the Vietnam War and, in 1994, a paralegal leaked tobacco industry documents that ultimately cost the industry billions of dollars in litigation and settlement costs—the frequency, scale and ease of dissemination of leaked information today presents a difference not only of degree, but of kind. The new Panama Papers-based criminal case will likely raise a host of novel legal issues based on legal challenges to the DOJ’s reliance on information illegally obtained by a third party, as well as information that would ordinarily be protected by the attorney-client privilege. In this memorandum, we discuss the potential issues raised by the prosecution and their implications.
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New DOJ Guidance on the Imposition and Selection of Corporate Monitors
On Friday, October 12, 2018, during remarks at the NYU School of Law Program on Corporate Compliance and Enforcement Conference on Achieving Effective Compliance, Assistant Attorney General Brian A. Benczkowski of the Department of Justice announced new guidance, issued on October 11, relating to the imposition and selection of corporate compliance monitors in Criminal Division
Anti-Corruption in Guatemala: A Critical Moment for CICIG
Last month, Guatemalan President Jimmy Morales effectively shut down the operation of the UN-operated International Commission against Impunity in Guatemala (called by its Spanish initials, “CICIG”) by declining to renew its mandate past its September 2019 expiration date and by barring the head of CICIG, Iván Velásquez, from re-entering the country. CICIG, a uniquely independent organ of the United Nations (“U.N.”), was created in 2007 to support and assist Guatemalan institutions in identifying, investigating, and prosecuting public corruption. Over the past decade, it has investigated nearly 200 public officials, and its efforts led to the prosecution and ultimate resignation of former Guatemalan President, Otto Pérez Molina.[1]
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DOJ Remarks Highlight Changes to White Collar Policy
On September 27, 2018, in remarks delivered at the 5th Annual Global Investigations Review New York Live Event, Deputy Assistant Attorney General Matthew S. Miner reported on the accomplishments of the Department of Justice (“DOJ”) over the course of the last twelve months. Importantly, he also discussed recent changes to the DOJ’s policies on prosecution of business organizations and how those changes have been implemented.[1] Miner highlighted the DOJ’s efforts to incentivize and provide guidance to companies to self-report, cooperate and remediate corporate misconduct while underscoring the importance of robust compliance programs to detect and prevent wrongdoing and to obtain full credit in resolving investigations by the DOJ.
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