By Pamela J. Bethel
We recently discussed the new emphasis that the U.S. Department of Justice is placing on the prosecution of individuals in white-collar crime cases. As we pointed out, the new guidelines, set forth in a speech last month by Deputy Attorney General Sally Yates, represent a get-tough attitude toward corporate crime.
It’s very much worth noting that these guidelines, which were sent to all U.S. attorneys’ offices across the nation, don’t apply only to classic federal criminal cases of fraud, bribery, or price-fixing. They also apply to what may begin as routine government contracts matters and what many people will assume, wrongly, will remain routine. In the past, the government might have accepted a criminal plea from a corporation for contract fraud, but it will now be looking in its cross hairs for individuals to indict.
This new policy will presumably apply to crimes that some might have thought are victimless crimes, such as misrepresentation of facts to a government agency in the course of fulfilling a contract.
Although the new rules don’t directly apply to investigations by agencies’ inspector generals’ offices, these probes often end up on parallel tracks to DOJ investigations.
So, at an early point in an investigation of any sort, including an internal investigation, government contractors should be thinking about whether any individuals are likely targets.
That means, as in all instances when individuals might be charged, that the company should be thinking about whether some individuals should be retaining separate counsel from the company. The interests of the company and of the individuals can diverge, and separate counsel is the best way to handle that.
In addition, when significant criminal penalties are at stake, including potential fines and prison time, all government contractors should put into place robust compliance programs. Experienced outside counsel are well qualified to help government contractors of all sizes in their efforts to do this.