Last week, the Justice Department reported a guilty plea in the VW emissions scandal prosecution. By this one announcement, DOJ signaled that it is planning to build a bigger case against VW. Ironically, the Justice Department has exceeded the number of guilty pleas and cooperating witnesses in many of its high profile FCPA and AML/Sanctions cases.

A senior VW engineer entered a guilty plea to what is termed “a 371 conspiracy” or a conspiracy to defraud the United States under title 18 USC Section 371. (Here). Prosecutors use this statute in cooperating witness contexts, or when seeking to plea bargain and placecertain limits on a sentence. The maximum punishment for a 371 conspiracy is 5 years’ imprisonment.

More importantly, the VW engineer’s plea agreement includes an opportunity to cooperate by providing “substantial assistance” to the government in the investigation and prosecution of others. By doing so, the VW engineer can reduce his punishment which is set now at 60 months imprisonment.

For those who are following the VW criminal investigation, you can expect further indictments and plea agreements of individuals as prosecutors build cases against individuals and eventually VW, the company.

In rare circumstances, a cooperating witness may not get the “opportunity” to build a case against another individual or the company and may be stuck with no reduction in his or her sentence.

It may not be so rare – just last year, James Rama plead guilty to an FCPA violation in the Eastern District of Virginia. Here. He was a former official in IAP Worldwide Services and had participated in bribery of Kuwaiti officials to secure a valuable surveillance contract.

Rama plead guilty to a 371 conspiracy to violate the FCPA and could have received a sentence of as long as sixty months’ imprisonment. Rama agreed to cooperate in order to reduce his sentence.

Rama assisted the government in the investigation of others but unfortunately the government did not bring any additional prosecutions based on his cooperation. Rama took a gamble and lost. The government did not sing his praises for cooperation at sentencing citing the prosecution of additional defendants.

It is an unfortunate situation when a cooperating witness does his or her best to cooperate but the government fails to make any cases against other defendants. A sad reality of a defendant who chooses to plead guilty and cooperate is that their sentence may depend on the aggressiveness and commitment of prosecutors to use the cooperating witness to build cases against other defendants. If the prosecutor is lazy, or gun shy, the defendant may be left out in the cold – staring at a sentence of years’ imprisonment.

Do not kid yourself but this situation has occurred in the past. Every prosecutor has seen or heard of such a situation and sought to avoid a harsh result for a defendant whose sentence would be unfair given the extensive cooperation provided to the government.

At the sentencing hearing, Rama’s counsel, William Brennan, argued that Rama assisted in a long investigation and complained that the case was not pursued to its “proper conclusion.” Mr. Brennan pointed out that the bribery reached higher into IAP than the Justice Department prosecuted. He stated “There are people . . . that should have been prosecuted in this case and for whatever reason they were not.”

DOJ prosecutors did not respond to this claim and stated only that there were a number of reasons why they entered into a non-prosecution agreement with the company and did not prosecute any individuals.

In the end, the judge and the prosecutors did the right thing by noting Rama’s cooperation efforts, and the court ultimately imposed a 120 day sentence, far less than 120 months.

Going back to the VW emissions case, the VW engineer who plead guilty is now in the situation where his own sentence will depend on the government’s prosecution of others. For this defendant, the Yates memorandum and the high publicity of the VW case, may reduce the risk of being “left out in the cold,” but it is something that has to be assessed by defense counsel and the defendant before entering a guilty plea with cooperation.