Corporate Fraud Investigations and Compliance Programs
June 1, 2000
Dennis L. Bryant- New York
Companies doing business in the United States, both domestic and foreign,
increasingly find themselves under scrutiny by government agencies and federal
and state prosecutors for regulatory violations or criminal wrongdoing. More and
more often, the government seeks to regulate corporate behavior through punitive
legal actions, such as administrative sanctions and criminal prosecutions. In
many instances, corporate officers and employees are targeted, in addition to
their corporate employers. The amounts that have been paid in judgments,
settlements and fines grows at a geometric rate, and an increasing number of
business executives have been prosecuted, convicted, and even imprisoned.
Virtually every company is a potential subject of a government investigation.
In certain highly regulated areas, such as health care and the environment,
investigations and prosecutions happen more frequently. Today, every corporate
general counsel and business executive must be aware of the risks of
governmental investigations and be prepared to deal with such events when they
arise.
Internal Investigations
An internal corporate investigation is a primary mechanism for responding to
a governmental investigation and developing the facts essential to formulating
the strategy for defending the company and its officers or employees. A
well-conducted internal investigation may enable a company to avoid
administrative sanctions or a criminal prosecution, or to minimize the damage;
it can make the difference whether a company can remain in business, or whether
an executive goes to jail.
Compliance Programs
Compliance programs are another important tool that companies should employ
to protect themselves and to keep the government and civil litigants at bay. A
well-conceived compliance program, that is carried out effectively, gives
management the ability to forestall many potential problems before they occur or
before they get out of control. An effective compliance program also
demonstrates good corporate citizenship and is useful to help defend the company
should a problem arise. It may dissuade a prosecutor from charging the company
for the misdeeds of an errant employee. Most importantly, under the Federal
Sentencing Guidelines, a good compliance program may lighten significantly the
punishment that a company receives if it is prosecuted. Indeed, in many
industries, it is nothing short of a breach of fiduciary duty for a board of
directors not to insure that a company have an active and effective compliance
program in place.
The purpose of this book is to provide corporate counsel, private
practitioners, and business executives with insight into the benefits and
pitfalls of internal investigations and compliance programs, and a basic working
knowledge of how to conduct such investigations and to structure an effective
compliance program.
Table of Contents
- Corporate Criminal Liability
- The Corporate Duty to Investigate
- Attorney-Client Privilege and Work-Product Doctrine
- How the Investigation Starts
- Conducting the Investigation
- Parallel Civil, Criminal & Administrative Proceedings
- Multiple Representation
- Corporate Sentencing Guidelines and Compliance Programs
- Conducting an Internal Investigation Overseas
- Investigation in the Health Care Industry
- Environmental Crimes & Environmental Compliance
- Environmental Criminal Prosecutions in the Maritime Industry
- Forensic Accounting
Appendices and Additional Information
- July 28, 1997 Office of the Attorney General Memo
- Chapter Eight – Sentencing of Organizations
- 31 U.S.C. § 3729 through U.S.C. § 3733
- Provider Self-Disclosure Protocol
- U.S. Department of Justice Policy Statement
- Environmental Protection Agency Policy Statement
- Examples of No-Fault Environmental Crimes
- Comparison: ISM Code, ISO 9000, ISO 14001, and Maritime Compliance Program
To order a copy of Corporate Fraud Investigations and Compliance Programs,
please visit the Oceana Publications, Inc. Web site or contact Oceana Publications, Inc., Dobbs Ferry, NY, toll-free at 1- 800-831-0758.