Adequacy of the Prosecution of Individuals

A. General Principle:

In deciding whether to charge a corporation, prosecutors should consider whether charges against the individuals responsible for the corporation’s malfeasance will adequately satisfy the goals of federal prosecution.

B. Comment:

Assessing the adequacy of individual prosecutions for corporate misconduct should be made on a case-by-case basis and in light of the factors discussed in these Principles. Thus, in deciding the most appropriate course of action for the corporation –

i.e.,

a corporate indictment or guilty plea, a deferred prosecution or non-prosecution agreement, or another alternative – a prosecutor should consider the impact of the prosecution of responsible individuals, along with the other factors in

JM 9-28.300

(Factors to be Considered).

[updated March 2023]

9-28.1400 – Interests of the Victims and Others Significantly Harmed

A. General Principle:

In deciding whether to charge a corporation, prosecutors should consider the interests of any victims, as well as individuals or entities who were significantly, even if indirectly, harmed by the criminal conduct.

B. Comment:

It is important to consider the economic and psychological impact of the offense, and subsequent prosecution, on any victims or others significantly harmed. Prosecutors should take into account such matters as the seriousness of the harm inflicted and how prosecution can redress or exacerbate such harm. In accordance with the Crime Victims’ Rights Act and the

Attorney General Guidelines for Victim and Witness Assistance

, prosecutors shall make best efforts to solicit the victim’s views in advance of and about major case decisions such as voluntary dismissals, plea negotiations, non-prosecution agreements, deferred prosecution agreements, pretrial diversion agreements, plea agreements, agreements in favor of the release of the accused pending judicial proceedings (when such release is for non-investigative purposes), sentencing recommendations, and restitution

the victim’s views in advance of and about major case decisions such as voluntary dismissals, plea negotiations, non-prosecution agreements, deferred prosecution agreements, pretrial diversion agreements, plea agreements, agreements in favor of the release of the accused pending judicial proceedings (when such release is for non-investigative purposes), sentencing recommendations, and restitution.

Additionally, prosecutors should make best efforts to provide information and assistance to those individuals or entities who may fall outside of the statutory definition of a victim, but were nevertheless significantly, even if indirectly, harmed by the criminal conduct, within available resources and to the extent reasonable, feasible, and appropriate. This information and assistance includes consultation with prosecutors prior to entry into a non-prosecution agreement, deferred prosecution agreement, pretrial diversion agreement, or plea agreement, as well as any agreement that would require an offender to pay restitution or other compensation to, or for the benefit of, the significantly harmed persons or entities. For more information regarding the Department’s obligations to victims and to those others significantly harmed, see the Crime Victims’ Rights Act, 18 U.S.C. § 3771, the Victims’ Rights and Restitution Act, 34 U.S.C. § 20141, and the

Attorney General Guidelines for Victim and Witness Assistance

.

Prosecutors should be aware that pursuant to the VOCA Fix to Sustain the Crime Victims Fund Act of 2021 (Pub. L. 117-27), monetary penalties collected under deferred or non-prosecution agreements will be treated equivalently to most monetary penalties collected after a criminal conviction and deposited into the Crime Victims Fund (CVF). The CVF is a statutorily created fund, administered by the Department’s Office for Victims of Crime, that is financed by monetary penalties collected and paid as a consequence of a federal criminal conviction or deferred or non-prosecution agreement.

See

34 U.S.C

e treated equivalently to most monetary penalties collected after a criminal conviction and deposited into the Crime Victims Fund (CVF). The CVF is a statutorily created fund, administered by the Department’s Office for Victims of Crime, that is financed by monetary penalties collected and paid as a consequence of a federal criminal conviction or deferred or non-prosecution agreement.

See

34 U.S.C. § 20101.offenders.  Money from the CVF is used to: support federal, tribal, state, and local crime victim assistance programs; provide financial assistance and reimbursement for expenses to crime victims (

e.g

. medical bills, funeral expenses); provide direct services to victims (

e.g.

, counseling, legal assistance, housing); fund victim-witness coordinator positions in the United States Attorneys’ Offices; fund FBI victim specialist positions; fund the Emergency Witness Assistance Program (EWAP); and fund the Victim Notification System.

[updated March 2023]

9-28.1500 - Selecting Charges

A. General Principle:

Once a prosecutor has decided to charge a corporation, the prosecutor at least presumptively should charge, or should recommend that the grand jury charge, the most serious, readily provable offense that is consistent with the nature of the defendant's misconduct and that is likely to result in a sustainable conviction.

B. Comment:

Once the decision to charge is made, the same rules as govern charging natural persons apply. These rules require "a faithful and honest application of the Sentencing Guidelines" and an "individualized assessment of the extent to which particular charges fit the specific circumstances of the case, are consistent with the purposes of the Federal criminal code, and maximize the impact of Federal resources on crime."

See

JM 9-27.300

. In making this determination, "it is appropriate that the attorney for the government consider,

inter alia

, such factors as the [advisory] sentencing guideline range yielded by the charge, whether the penalty yielded by such sentencing range ..

nces of the case, are consistent with the purposes of the Federal criminal code, and maximize the impact of Federal resources on crime."

See

JM 9-27.300

. In making this determination, "it is appropriate that the attorney for the government consider,

inter alia

, such factors as the [advisory] sentencing guideline range yielded by the charge, whether the penalty yielded by such sentencing range ... is proportional to the seriousness of the defendant's conduct, and whether the charge achieves such purposes of the criminal law as punishment, protection of the public, specific and general deterrence, and rehabilitation."

Id.

[updated March 2023]

9-28.1600 - Plea Agreements with Corporations

A. General Principle:

In negotiating plea agreements with corporations, as with individuals, prosecutors should generally

seek

a plea to an appropriate offense. In addition, the terms of the plea agreement should contain appropriate provisions to ensure punishment, deterrence, rehabilitation, and compliance with the plea agreement in the corporate context. Absent extraordinary circumstances or approved departmental policy such as the Antitrust Division’s Corporate Leniency Policy,

see

7-3.300

et seq.

, no corporate resolution should provide protection from criminal or civil liability for any individuals.

See also

JM 9-16.050

,

5-11.114

.

B. Comment:

Prosecutors may enter into plea agreements with corporations for the same reasons and under the same constraints as apply to plea agreements with natural persons.

See

JM 9-27.400-530

. This means,

inter alia

, that the corporation should generally be required to plead guilty to the most serious, readily provable offense charged. In addition, any negotiated departures or recommended variances from the advisory Sentencing Guidelines must be justifiable under the Guidelines or 18 U.S.C. § 3553 and must be disclosed to the sentencing court

with natural persons.

See

JM 9-27.400-530

. This means,

inter alia

, that the corporation should generally be required to plead guilty to the most serious, readily provable offense charged. In addition, any negotiated departures or recommended variances from the advisory Sentencing Guidelines must be justifiable under the Guidelines or 18 U.S.C. § 3553 and must be disclosed to the sentencing court. A corporation should be made to realize that pleading guilty to criminal charges constitutes an admission of guilt and not merely a resolution of an inconvenient distraction from its business. As with natural persons, pleas should be structured so that the corporation may not later "proclaim lack of culpability or even complete innocence."

See

JM 9-27.420

(b)(4),

9-27.440

,

9-27.500

. Thus, for instance, there should be placed upon the record a sufficient factual basis for the plea to prevent later corporate assertions of innocence.

A corporate plea agreement should also contain provisions that recognize the nature of the corporate "person" and that ensure that the principles of punishment, deterrence, and rehabilitation are met. In the corporate context, punishment and deterrence are generally accomplished by substantial fines, mandatory restitution, and institution of appropriate compliance measures, including, if necessary, continued judicial oversight or the use of special masters or corporate monitors.

See

U.S.S.G. §§ 8B1.1, 8C2.1,

et seq

. In addition, where the corporation is a government contractor, permanent or temporary debarment may be appropriate. Where the corporation was engaged in fraud against the government (

e.g.

, contracting fraud), a prosecutor may not negotiate away an agency's right to debar, delist, or exclude the corporate defendant.

In negotiating a plea agreement, prosecutors must also consider the deterrent value of prosecutions of individuals within the corporation

actor, permanent or temporary debarment may be appropriate. Where the corporation was engaged in fraud against the government (

e.g.

, contracting fraud), a prosecutor may not negotiate away an agency's right to debar, delist, or exclude the corporate defendant.

In negotiating a plea agreement, prosecutors must also consider the deterrent value of prosecutions of individuals within the corporation. Therefore, one factor that a prosecutor should consider in determining whether to enter into a plea agreement is whether the corporation is seeking immunity for its employees and officers or whether the corporation is willing to cooperate in the investigation of culpable individuals as outlined herein. Absent extraordinary circumstances or approved departmental policy such as the Antitrust Division’s Corporate Leniency Policy, no corporate resolution should include an agreement to dismiss charges against, or provide civil or criminal immunity for, individual offices or employees.  Any such release due to extraordinary circumstances must be personally approved in writing by the relevant Assistant Attorney General or United States Attorney.

Rehabilitation, of course, requires that the corporation undertake to be law-abiding in the future. It is, therefore, appropriate to require the corporation, as a condition of probation, to implement a compliance program or to reform an existing one. As discussed above, prosecutors may consult with the appropriate state and federal agencies and components of the Justice Department to ensure that a proposed compliance program is adequate and meets industry standards and best practices.

See

JM 9-28.800

.

In plea agreements in which the corporation agrees to cooperate, the prosecutor should ensure that there is a true commitment to cooperation

e. As discussed above, prosecutors may consult with the appropriate state and federal agencies and components of the Justice Department to ensure that a proposed compliance program is adequate and meets industry standards and best practices.

See

JM 9-28.800

.

In plea agreements in which the corporation agrees to cooperate, the prosecutor should ensure that there is a true commitment to cooperation. To do so, the prosecutor should request that the corporation make appropriate disclosures of relevant factual information and documents, make employees and agents available for debriefing, file appropriate certified financial statements, agree to governmental or third-party audits, and take whatever other steps are necessary to ensure that the full scope of the corporate wrongdoing is disclosed and that the responsible personnel are identified and, if appropriate, prosecuted.

See generally

JM 9-28.700

. In taking such steps, Department prosecutors should recognize that attorney-client communications are often essential to a corporation's efforts to comply with complex regulatory and legal regimes, and that, as discussed at length above, cooperation is not measured by the waiver of attorney-client privilege and work product protection, but rather is measured, as a threshold issue, by the disclosure of facts about individual misconduct, as well as other considerations identified herein, such as making witnesses available for interviews and assisting in the interpretation of complex documents or business records.

[updated March 2023]

9-28.1700 - Use of Independent Compliance Monitors in Corporate Resolutions

A. General Principle:

Independent compliance monitors (monitors) can be an effective means of reducing the risk of further corporate misconduct and rectifying compliance lapses identified during a corporate criminal investigation. Prosecutors should carefully assess the need for the imposition of a monitor on a case-by-case basis, without applying any presumption for or against such imposition

ons

A. General Principle:

Independent compliance monitors (monitors) can be an effective means of reducing the risk of further corporate misconduct and rectifying compliance lapses identified during a corporate criminal investigation. Prosecutors should carefully assess the need for the imposition of a monitor on a case-by-case basis, without applying any presumption for or against such imposition. Two broad considerations should guide prosecutors when assessing the need for and propriety of a monitor, and the scope and duration of any monitorship: (1) the potential benefits that employing a monitor may have for the corporation and the public, and (2) whether the costs of a monitor and its impact on the operations of a corporation (which can be calibrated by tailoring the scope and duration of a monitorship) substantially outweigh the potential benefits of a monitor.

[1]

In evaluating the necessity and potential benefits of a monitor, prosecutors should consider, among other factors:

Whether the corporation voluntarily self-disclosed the underlying misconduct in a manner that satisfies the particular DOJ component’s voluntary self-disclosure policy;

Whether, at the time of the resolution and after a thorough risk assessment, the corporation has implemented an effective compliance program and sufficient internal controls to detect and prevent similar misconduct in the future;

Whether, at the time of the resolution, the corporation has adequately tested its compliance program and internal controls to demonstrate that they would likely detect and prevent similar misconduct in the future;

Whether the underlying criminal conduct was long-lasting or pervasive across the business organization or was approved, facilitated, or ignored by senior management, executives, or directors (including by means of a corporate culture that tolerated risky behavior or misconduct, or did not encourage open discussion and reporting of possible risks and concerns);

Whether the underlying criminal conduct involved the exploitation of an i

uct was long-lasting or pervasive across the business organization or was approved, facilitated, or ignored by senior management, executives, or directors (including by means of a corporate culture that tolerated risky behavior or misconduct, or did not encourage open discussion and reporting of possible risks and concerns);

Whether the underlying criminal conduct involved the exploitation of an inadequate compliance program or system of internal controls;

Whether the underlying criminal conduct involved active participation of compliance personnel or the failure of compliance personnel to appropriately escalate or respond to red flags;

Whether the corporation took adequate investigative or remedial measures to address the underlying criminal conduct, including, where appropriate, the termination of business relationships and practices that contributed to the criminal conduct, and discipline or termination of personnel involved, including with respect to those with supervisory, management, or oversight responsibilities for the misconduct;

Whether, at the time of the resolution, the corporation’s risk profile has substantially changed, such that the risk of recurrence of the misconduct is minimal or nonexistent;

Whether the corporation faces any unique risks or compliance challenges, including with respect to the particular region or business sector in which the corporation operates or the nature of the corporation’s customers; and

Whether and the extent to which the corporation is subject to oversight from industry regulators or is receiving a monitor from another domestic or foreign enforcement authority or regulator.

B. Comment:

Department attorneys should determine whether a monitor is required based on the facts and circumstances presented in each case. The factors listed in this section are intended to be illustrative of those that should be evaluated and are not an exhaustive list of potentially relevant considerations. Monitorships should not be imposed for punitive purposes

cement authority or regulator.

B. Comment:

Department attorneys should determine whether a monitor is required based on the facts and circumstances presented in each case. The factors listed in this section are intended to be illustrative of those that should be evaluated and are not an exhaustive list of potentially relevant considerations. Monitorships should not be imposed for punitive purposes. The scope of any monitorship should be appropriately tailored to address the specific issues and concerns that created the need for the monitor.

In general, the Department should favor the imposition of a monitor where there is a demonstrated need for, and clear benefit to be derived from, a monitorship. Where a corporation’s compliance program and controls are untested, ineffective, inadequately resourced, or not fully implemented at the time of a resolution, prosecutors should consider imposing a monitorship. This is particularly true if the investigation reveals that a compliance program is deficient or inadequate in numerous or significant respects. Conversely, where, at the time of a resolution, a corporation’s compliance program and controls have been fully implemented, tested and demonstrated to be effective and adequately resourced, a monitor may not be necessary.

[added March 2023]

[1] Attorneys will find helpful guidance in

Memorandum from Deputy Attorney General Lisa O. Monaco,

“Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group,”

dated September 15, 2022 (Monaco Memo 2022), the Memorandum from Deputy Attorney General Lisa O. Monaco,

“Corporate Crime Advisory Group and Initial Revisions to Corporate Criminal Enforcement Policies,”

dated October 28, 2021 (Monaco Memo 2021).

See

Acting Deputy Attorney General Gary C. Grindler,

“Additional Guidance on the Use of Monitors in Deferred Prosecutions and Non-Prosecution Agreements with Corporation,”

May 25, 2010

o Memo 2022), the Memorandum from Deputy Attorney General Lisa O. Monaco,

“Corporate Crime Advisory Group and Initial Revisions to Corporate Criminal Enforcement Policies,”

dated October 28, 2021 (Monaco Memo 2021).

See

Acting Deputy Attorney General Gary C. Grindler,

“Additional Guidance on the Use of Monitors in Deferred Prosecutions and Non-Prosecution Agreements with Corporation,”

May 25, 2010. Memorandum entitled

“Selection and Use of Monitors in Deferred Prosecution Agreements and Non-Prosecution Agreements with Corporations,”

issued by then-Acting Deputy Attorney General Craig S. Morford on March 7, 2008, as amended and supplemented by successor guidance to Department components.

9-28.1710 - Approval of Determinations Concerning Monitors

The decision whether or not to impose a monitor shall be done in a manner consistent with Department and component policy, with a notification to the appropriate United States Attorney or Department Component Head (components may have additional approval requirements). Any agreement imposing a monitorship, including a deferred prosecution agreement, a non-prosecution agreement, or a guilty plea, should detail the reasoning for requiring a monitor. Where relevant, agreements where a monitorship was ultimately not imposed should detail the reasoning for not requiring a monitor.

Some components might have additional requirements regarding monitors, and in the case of court-appointed monitors, prosecutors must give due regard to the appropriate role of the court and/or the probation office.

[added March 2023]

9-28.1720 - Selection of Monitor

A. General Principle:

A monitor must be qualified for the position based on the facts and circumstances of the case and the intended scope and duties of the monitorship.  The selection process must be transparent, merit-based, and conducted in a manner free from conflicts of interest

the appropriate role of the court and/or the probation office.

[added March 2023]

9-28.1720 - Selection of Monitor

A. General Principle:

A monitor must be qualified for the position based on the facts and circumstances of the case and the intended scope and duties of the monitorship.  The selection process must be transparent, merit-based, and conducted in a manner free from conflicts of interest.  Monitor selections shall be made in keeping with the Department’s commitment to diversity and inclusion, and prosecutors should consider monitors from a diverse set of backgrounds.

The Department should employ consistent and transparent procedures for selecting monitors, pursuant to policies adopted by each component and office.

[1]

Every office or component involved in corporate criminal resolutions must adopt a consistent and predictable process for selecting monitors.

[2]

These component-specific selection process must, as a baseline, be designed to: (1) select a highly qualified and respected person or entity based on suitability for the assignment and all of the circumstances; (2) avoid potential and actual conflicts of interests, and (3) instill public confidence.

Monitor candidates and prosecutors who participate in the selection process must establish the absence of potential and actual conflicts of interest.  Monitor candidates may not have any interest in, or relationship with, the corporation or its employees, officers, or directors that would cause a reasonable person to question his/her impartiality. Government attorneys must comply with the conflict-of-interest guidelines set forth in 18 U.S.C. § 208, 5 C.F.R. Part 2635, and 28 C.F.R. Part 45.2. If any government attorney has, or appears to have, a potential or actual conflict, that attorney must not participate in the selection process

ts employees, officers, or directors that would cause a reasonable person to question his/her impartiality. Government attorneys must comply with the conflict-of-interest guidelines set forth in 18 U.S.C. § 208, 5 C.F.R. Part 2635, and 28 C.F.R. Part 45.2. If any government attorney has, or appears to have, a potential or actual conflict, that attorney must not participate in the selection process.

Monitor selection processes must be performed by a standing or

ad hoc

committee within the applicable office or component, which shall include as a member an ethics official or professional responsibility officer from that office or component.  Every selection process shall include a written memorandum confirming that no conflicts exist in the committee prior to the selection process or as to the monitor prior to the commencement of the monitor’s work.

The Office of the Deputy Attorney General must approve the monitor selection for all cases in which a monitor is recommended, unless the monitor is court-appointed.

B. Comment:

The United States Attorney or Department component head shall provide a copy of any agreement imposing a monitor to the Assistant Attorney General for the Criminal Division at a reasonable time after it has been executed. The Assistant Attorney General for the Criminal Division or the CRM Standing Committee Chair shall maintain a record of all such agreements. To the extent possible, in the interest of transparency and the edification of the public, the identity of the monitor selected in each case shall be made available on the respective component’s or office’s website.

[added March 2023]

[1] Additional guidance is contained in the Memorandum of Deputy Attorney General Lisa O. Monaco, “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group,” Sept. 15, 2022.

[2] Components’ monitor selection processes must be approved by the Office of the Deputy Attorney General

ective component’s or office’s website.

[added March 2023]

[1] Additional guidance is contained in the Memorandum of Deputy Attorney General Lisa O. Monaco, “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group,” Sept. 15, 2022.

[2] Components’ monitor selection processes must be approved by the Office of the Deputy Attorney General. This requirement does not apply to cases involving court-appointed monitors, where Department attorneys must give due regard to the appropriate role of the court and/or the probation office.

9-28.1740 - Continued Review and Scoping of Monitorships

A. General Principle:

In matters where a monitor is imposed pursuant to a corporate resolution with the Department, prosecutors should ensure that the monitor’s responsibilities and scope of authority are well-defined and recorded in writing.  Corporate resolutions imposing monitors should specify the monitor’s mandate.  At the beginning of such a monitorship, Department attorneys should ensure that a clear workplan is identified so as to establish a consensus among the corporation, monitor, and Department as to the expectations for the scope of the monitor’s review.

B. Comment:

During the term of the monitorship, Department attorneys must remain apprised of the ongoing work conducted by the monitor and in communication with both the monitor and the corporation.

Department attorneys should receive regular updates from the monitor about the status and progress of the monitorship.  Monitors should promptly alert Department attorneys if they are being denied access to information or personnel necessary to conduct its work.  Prosecutors should also regularly receive information about the work the monitor is conducting to ensure that it remains tailored to the workplan and scope of the monitorship

gular updates from the monitor about the status and progress of the monitorship.  Monitors should promptly alert Department attorneys if they are being denied access to information or personnel necessary to conduct its work.  Prosecutors should also regularly receive information about the work the monitor is conducting to ensure that it remains tailored to the workplan and scope of the monitorship.  In reviewing information relating to the monitor’s work, prosecutors should consider the reasonableness of the monitor’s review, including, where appropriate, issues relating to the cost of the monitor’s work.

In certain cases, the Department may determine, in its discretion, that the term of the monitorship agreed to by the parties is longer than necessary.  For example, a corporation may demonstrate significant and better-than-anticipated improvements to its compliance program, which would negate the need for continued oversight from a monitor.  In other cases, the corporation may be acquired by another corporation with an established, robust compliance program that is provably extended to the acquired corporation.  Conversely, the Department may determine in other cases that it will be necessary to extend a monitorship beyond the initial period agreed to by the parties—for example, where additional or more pervasive misconduct is identified subsequent to the entry of the resolution, either by the monitor or through other means.

In cases where a corporation seeks to shorten or terminate the monitorship based on acquisition by another corporation, prosecutors should not presume that the underlying concerns that prompted the need for the monitor are automatically resolved.  The acquirer must demonstrate that there have been meaningful, sustainable changes to the corporation’s personnel, compliance programs, and culture that have been embedded in the corporate culture and framework and have demonstrably reduced the chances of future misconduct.

[added March 2023]