The short answer is yes.
White collar crime allegations usually involve money-related violations, intellectual property (IP) infringements or environmental crimes. They often include alleged patterns of violations, and the actions or plans of multiple people.
Financial, intellectual property and environmental violations can be prosecuted in at the state level as well as through the federal courts. Once charges are established, white collar crime prosecution may occur with vigor. On the other hand, these cases are time-intensive. They are expensive. And they are rarely easy to prosecute.
Guilty pleas from big names have received a great deal of media attention.
Michael Cohen pleaded guilty to campaign finance breaches, bank fraud charges and tax evasion. Paul Manafort was jailed for bank fraud, tax fraud, failure to disclose foreign financial accounts and other crimes.
Cohen and Manafort were in the spotlight because of their notable links to the White House. Yet chasing suspects like these is not an investigator’s normal work.
It’s safe to say most ordinary white collar crimes are never spotted.
Financial crimes account for just 12 percent of crimes prosecuted in the federal system. The number of drug charges amount to more than double that amount. Why the relatively low proportion of fraud prosecutions? It may come down to making violence-related crimes a priority, but it also might be a matter of pursuing the low-hanging fruit. Connecting the dots in corporations can take vast sums of hours and money, which government agencies are not always able, willing or eager to spend.
In today’s corporate sphere, responsibility and knowledge of what departments do is delegated and diffused. This complicates the question of which individual or group had the knowledge and intent a prosecutor must pinpoint to show proof beyond a reasonable doubt.
Senior managers’ misconduct is hard to demonstrate. The day-to-day activities in question are usually handled by others.
Furthermore, state and federal prosecutors have discretion to use white collar criminal law with some degree of leniency. For example, the prosecution might apply a corporate compliance program credit and decide not to pursue a company. In the alternative, prosecutors may agree to a settlement.
The Arthur Andersen case was a turning point. The government was obliged to acknowledge the way federal prosecution and conviction harmed third parties and devastated livelihoods at an accounting company with more than 85,000 staffers worldwide.
Today, alternative settlements are within the reach of a diligent criminal defense firm.
A DPA provides a voluntary alternative to a court prosecution. The Justice Department will charge the company in court but will also waive the charges after the terms of the DPA are met. These terms, which take several years to meet, include several salient features:
We expect a DPA to require the payment of restitution to any entities harmed by the defendant.
The use of monitoring services, which a DPA may require, implements third-party oversight to ensure compliance.
Under this term of the agreement, the Department of Justice and corporate representative must meet at least once a year to review the monitorship and its cost and scope.
The NPA is less detailed and less burdensome on the defendant. It is a key tool we have to avert prosecution.
Why are these agreements available? Excellent white collar criminal defense attorneys have pressed the government to acknowledge a prosecution’s harmful and unintended consequences. We point out the debilitating effects on companies — and therefore on investors, employees, contractors, shareholders and third parties.
Here, we can offer a practical example of the lawyer’s day-to-day work.
The federal Department of Justice has issued a document that offers defense attorneys a helpful framework for putting a case together on behalf of the client, to persuade the government not to prosecute. This new document is presented as a Guidance Document on Evaluation of Corporate Compliance Programs (April 2019).
This Guidance Document underscores white collar crime prosecution discretion. The government can decline to prosecute at all. Moreover, the agency is directed to examine corporate compliance rules “in the specific context of a criminal investigation” — meaning the DOJ’s Criminal Division has no set-in-stone criteria to evaluate the effectiveness of a company’s compliance program.
The Guidance Document directs federal prosecutors to ask three basic questions about a company’s compliance system:
So, the government reviews the corporate compliance systems, checks that the company actually attends to them and effectively implements them. At the same time, the Guidance Document notes that no set formula exists for the prosecutor to answer the three questions. Prosecutors are meant to apply them through a case-by-case approach. The government may evaluate corporate activity by examining the varied concepts that the Criminal Division often finds pertinent when assessing corporate compliance.
The Guidance Document sets forth a number of indications of what the agency will take into account. Systematically following these cues and laying out a corporation’s case for getting corporate compliance program credit will make a stronger case for the government to exercise its discretion favorably.
Michael J. Wynne has prosecutorial experience in state and federal court systems. An experienced Houston criminal defense attorney, he knows how to challenge prosecutors. And this experience works for our clientele.
Michael Wynne has defended corporate and individual clients’ reputations and livelihoods for decades. With everything at stake, you’ll want to hire a stand-out legal strategist. Should you have questions pertinent to the circumstances of your business, submit your contact information through our secure portal to begin a case evaluation.
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