DOJ Promises Leniency for White Collar Crime in Corporate America

Corporate and white collar crime enforcement by the U.S. Department of Justice is expected to increase in 2023, and it will increase yet more in 2024.

While vowing to take a tougher stand against corporate crime, the Biden Justice Department has made it clear that its “top priority for corporate criminal enforcement” is “going after individuals” rather than institutions, pointing to the high-profile convictions of Theranos founder Elizabeth Holmes and former JPMorgan traders.

To this end, the DOJ has focused hiring and requests for additional resources the last two years on agents and prosecutors to target financial and anti-corruption efforts. Further complementing this shift in priorities are a number of specific initiatives—targeting Covid fraud, kleptocracy, cryptocurrency, and cyber-fraud enforcement, for example—that will also generate white collar cases.

Most investigations of alleged fraud or corruption take several years. As more agents and prosecutors across the country devote their attention to such matters, the total number of such investigations will continue to increase year over year.

However, despite the Biden administration’s pledge to crack down on corporate crime, a new analysis of DOJ data shows that business prosecutions fell to a record low in fiscal year 2022, even though corporate crimes such as fraud remain rampant.

The Transactional Records Access Clearinghouse (TRAC), a nonprofit data-gathering outfit, noted yesterday that out of the more than 4,000 federal white collar prosecutions last year, “under 1% or only 31 of these defendants were businesses or corporate entities.”  TRAC also found that “the prosecution of white-collar offenders in FY 2022 reached a new all-time low since tracking began during the Reagan administration.”

Part of the reason could be that the DOJ is promising leniency for white collar crime in corporate America, provided the offenders come forward and report their own wrongdoing.  According to the DOJ’s new policy, companies that report their own misdeeds would not face prosecution, provided they agree to correct their misconduct.  Apart from avoiding criminal prosecution, companies that come forward and self-report can see a 75% reduction in fines and fees.