Prosecutors set sights on individuals rather than corporations

The Department of Justice says it will begin focusing on prosecuting executives in white collar crime cases.

In its attempt to show that it is serious about tackling white collar crime, the U.S. Department of Justice (DOJ) released a memo last year that provided new guidelines for investigators and prosecutors. According to the New York Times, in the memo the DOJ shows a greater interest in targeting high-level employees for white collar crimes rather than simply seeking monetary penalties from the corporations those employees work for. While the implications of the memo are controversial, this shift from punishing corporations to punishing individuals within those corporations should be taken seriously by anybody accused of a corporate crime.

Emphasis on individuals

The memo, released last September, is largely a response to criticisms that the DOJ has failed to pursue prosecutions against individual executives at corporations that have been punished for corporate wrongdoing. In a number of high-profile cases in recent years, the DOJ has pursued monetary settlements from corporations while refraining from prosecuting many high-level employees. The memo offers guidelines to investigators and prosecutors about how to build a case against individuals themselves rather than just the corporations they work for.

The memo, for example, offers guidelines on settlement negotiations. Those guidelines state that, during settlement negotiations, companies being investigated for white collar crime will only be able to obtain credit for cooperating with authorities if they identify individual employees and provide investigators with evidence against those employees. Because credit can save companies money in the final settlement, it could give them a financial incentive to turn over evidence against individual, high-level employees.

Just public relations?

While the memo does offer a shift in the general approach investigators and prosecutors take with white collar crimes, whether the memo will actually have far reaching implications is still up for debate. Some legal analysts, for example, say the memo is more an exercise in public relations rather than a substantive change, although others do point out that the memo does provide some concrete incentives for targeting individuals. It's important to also point out that the memo does not change any laws, but simply offers guidelines to prosecutors.

According to the International Business Times, the memo could lead to more prosecutions against individual executives, but that increase in prosecutions would not necessarily lead to an increase in jail time. Instead, there may simply be more financial punishments meted out to executives. Other critics say that the memo could make it harder for prosecutors to pursue corporate crime cases since it can often be difficult to show criminal wrongdoing on the part of individual employees rather than by an entire company.

White collar defense

While it is hard to tell what implications the DOJ's memo will have on white collar crime cases going forward, it is at least indicative of the broad change in direction prosecutors may be taking towards corporate criminal cases. There is a discernible interest by both investigators and prosecutors to seek penalties against individuals in corporate criminal cases. As such, executives themselves need to be prepared. Anybody who is facing investigation into alleged corporate wrongdoing should contact a criminal defense attorney with experience in white collar crime immediately.