U.S. Deputy Attorney General Sally Quillian Yates recently announced new instructions for attorneys at the U.S. Department of Justice (DOJ), outlining in a memorandum the DOJ’s policies with respect to civil and criminal enforcement actions against responsible individuals in corporate investigations. The policy announcement underscores that the federal government is increasingly focused on deterring responsible individuals from engaging in misconduct, in addition to recovering misappropriated funds from the deep pockets of the corporations they control. The announcement is particularly relevant to officers and employees of healthcare providers as the DOJ continues to focus its efforts on pursuit of criminal and civil False Claims Act cases in the healthcare industry. DOJ attorneys are instructed to take certain steps, representing both new policies and existing best practices, to strengthen pursuit of individuals in such corporate investigations.
Two of the instructions in the memorandum relate to how the DOJ’s resolution in actions against corporations will affect responsible individuals. First, to be eligible for any cooperation credit under the Principles of Federal Prosecution of Business Organizations, corporations must now “identify all individuals involved in or responsible for the misconduct at issue, regardless of their position, status or seniority, and provide to the [DOJ] all facts relating to the misconduct.” The memorandum further provides that corporations will be required to disclose all relevant facts about responsible individuals under the DOJ’s position on “full cooperation” under the False Claims Act. DOJ attorneys are instructed to take proactive steps to investigate individuals in corporate matters and validate information provided by corporations with respect to responsible individuals. If continued cooperation is necessary after resolution of the underlying corporate criminal or civil action, DOJ attorneys are expected to include such obligations in the plea or settlement agreement and provide for appropriate consequences if the corporation fails to provide the required information. It will be critical for corporations to negotiate clear post-resolution obligations in these situations.