Department of Justice Incentivizes Voluntary Self-Disclosure
The Department of Justice (DOJ) recently unveiled a new policy outlining the benefits that a company may be entitled to for the voluntary self-disclosure (VSD) of criminal conduct.
The purpose of the policy is to incentivize a company to proactively come forward when they discover misconduct.
The new policy sets a nationwide standard for how the United States Attorney’s Offices (USAO) will determine if a company has made a voluntary self-disclosure.
Benefits of VSD
Absent an aggravating factor, a company that is considered to have made a VSD would receive the following benefits:
- The USAO will not seek a guilty plea.
- The company could potentially avoid a criminal penalty. Ultimately, it will not receive a criminal penalty that is greater than 50% below the low end of the U.S. Sentence Guidelines fine range.
- The USAO will not require a third-party compliance monitor.
Conditions of a Voluntary Disclosure
A company can qualify for VSD benefits if the following conditions are met:
- It discloses facts of misconduct before such conduct is publicly reported other or otherwise known to the DOJ.
- It discloses all known relevant facts in a timely matter, prior to a threat of disclosure or government investigation.
- It fully cooperates and appropriately remediates the criminal conduct.
Aggravating Factors
Under the VSD policy, the USAO may still seek a guilty plea if certain aggravating factors are present:
- The misconduct poses a grave threat to national security, public health, or the environment.
- The misconduct is deeply pervasive throughout the company.
- The misconduct involved the company’s current executive management.
However, per the policy, the presence of an aggravating factor does not mean a guilty plea will necessarily be required. Rather, the USAO will consider the relevant facts and circumstances.
In the instance of an aggravating factor, the company can still receive benefits under the VSD policy, including a reduction (50-75%) off the low end of the USSG fine range. Likewise, the USAO will not require a third-party monitor if the company has implemented an effective compliance program.
If your business has any questions on this topic or any other matters, please do not hesitate to contact the attorneys at The Royal Law Firm at 413-586-2288.
