Business Crimes Hotline

New Department of Justice Guidance for Compliance Monitorships

On Oct. 11, 2018, Assistant Attorney General for the Criminal Division, Brian Benczkowski, issued the “Selection of Monitors in Criminal Division Cases” memorandum to “establish standards, policy, and procedures, for the selection of monitors” in U.S. Department of Justice (DOJ) Criminal Division cases involving a deferred prosecution agreement (DPA), non-prosecution agreement (NPA), or plea bargain between the DOJ and business organizations.

Building on the 2008 memorandum issued by then Acting Deputy Attorney General, Craig Morford (“Selection and Use of monitors in Deferred Prosecution Agreements and Non-Prosecution Agreements with Corporations”), Benczkowski opens with a discussion of applicable DOJ considerations regarding appointment of a compliance monitor. Specifically, the factors considered by Criminal Division attorneys are as follows:

• Whether the underlying misconduct involved the manipulation of corporate books and records or the exploitation of an inadequate compliance program or internal controls systems;
• Whether the misconduct at issue was pervasive across the business organization or approved or facilitated by senior management;
• Whether the corporation has made significant investments in, and improvements to, its corporate compliance program and internal controls systems; and
• Whether remedial improvements to the corporate compliance program and internal controls have been tested to demonstrate that they would prevent or detect similar misconduct in the future.

The memorandum further notes that the DOJ should take monetary costs to the business into account — particularly compared to any potential benefits gained by the monitorship — in addition to “the unique risks and compliance challenges the company faces” in light of its industry and operating jurisdictions.