The Deputy Attorney General recently offered remarks on how federal prosecutors view the criminal and civil pursuit of corporate defendants.
In November, 2018, Deputy Attorney General Rob Rosenstein spoke at the 34th annual conference on the Foreign Corrupt Practices Act (FCPA). The FCPA is an important piece of legislation that gives the government power to prosecute corporations that use bribery in foreign business dealings. The Act also supports the policing of business accounting practices on a number of levels.
Speaking to the conference audience, Mr. Rosenstein noted it has been four decades since the FCPA was enacted. He then introduced the new FCPA Corporate Enforcement Policy. The policy is important because it guides federal prosecutors in their pursuit of corporate wrongdoers. This could be senior board members or corporate individuals who could be carrying out a long term tax fraud.
In his remarks, Mr. Rosenstein made the following points about the new policy:
- There are differences in how the federal government pursues civil and criminal charges against corporate entities and individuals.
- Rosenstein emphasized the government policy that identifying and punishing those who commit crimes is the best deterrent to more crime.
- Corporate wrongdoers can voluntarily disclose FCPA violations to the SEC through its Pilot Program. By offering full cooperation and transparency, potential defendants work with the government to rectify their acts under the law. Rosenstein noted there were 17-FCPA associated matters in 2016. Of those, two were disclosures through the Pilot program. Each of those cases was resolved by agreement, without prosecution or assignment of a compliance monitor.
- With regard to criminal prosecutions, Mr. Rosenstein described the responsibility of corporations to fully identify “every individual who was substantially involved in or responsible for the criminal conduct.” This phrasing steps down from prior federal pursuit of anyone involved in the corporate wrongful deed.
- On criminal investigations, Mr. Rosenstein reiterated that cooperation credit would only be provided to companies that come clean about the crime, who directed it, and who knowingly executed on it. For criminal cases, the award of cooperation credit is “all or nothing.”
- In civil cases, Mr. Rosenstein offered that cooperation credit may be awarded partially or fully, depending on the information provided, and whether the corporation is found to have hidden information.
Investigations into corporate wrongdoing often involve civil or criminal tax audits or other exploration before allegations are made. When you are aware that your company may have engaged in behavior outside of tax regulations, speak with an experienced tax defense attorney.
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In Cleveland, Chicago, and internationally, the law firm of Robert J. Fedor, Esq., LLC delivers experienced, strategic defense to individuals or entities facing allegations of tax crime or other potential corporate tax litigation. Contact us or call 800-579-0997 today.