Recent guidance issued by the U.S. Department of Justice (“DOJ”) reveals the government’s renewed focus on individual accountability during corporate investigations. On September 9, 2015, Deputy U.S. Attorney General Sally Quillian Yates issued a memorandum to DOJ attorneys (the “Yates Memo”) that emphasizes the importance of seeking accountability from the individuals who are responsible for corporate wrongdoing.

The Yates Memo outlines six measures that should be taken by federal prosecutors during any investigation of corporate misconduct in order to hold accountable the individuals who are responsible for the conduct. A discussion of each measure appears below.

  1. “In order to be eligible for any cooperation credit, a corporation must provide the DOJ with all relevant facts regarding the individuals involved with corporate misconduct.”

If a company fails to look into such facts, or fails to disclose such facts to the DOJ, the company’s cooperation will not be considered a mitigating factor. For example, the False Claims Act allows for reduced damages if there is full cooperation during the government’s investigation.  The Yates Memo clarifies that the DOJ’s position on “full cooperation" under the False Claims Act “will be that, at a minimum, all relevant facts about responsible individuals must be provided.”

  1. “Both criminal and civil corporate investigations should focus on individuals from the inception of the investigation.” 

The DOJ notes that this approach is more efficient, and will “maximize the chances” that the final resolution of an investigation will include charges against not just the corporation, but the responsible individuals as well.

  1. “Criminal and civil attorneys handling corporate investigations should be in routine communication with one another.” 

DOJ attorneys are directed to “be alert for circumstances where concurrent criminal and civil investigations should be pursued.” If civil attorneys believe that an individual involved in an investigation should be subject to a criminal inquiry, they are directed to promptly refer the matter to criminal prosecutors.

  1. “Absent extraordinary circumstances or approved departmental policy, no corporate resolution will provide protection from criminal or civil liability for any individuals.” 

Absent extraordinary circumstances, DOJ attorneys should not agree to a resolution that includes an agreement to dismiss charges against, or provide immunity for, individual officers or employees. Any such release of liability due to extraordinary circumstances must now be approved in writing by the Assistant Attorney General or U.S. Attorney handling the case.

  1. “Corporate cases should not be resolved without a clear plan to resolve related individual cases before the statute of limitations expires, and declinations as to individuals in such cases must be memorialized.” 

In order to proceed with resolving a corporate investigation without a plan to resolve related individual wrongdoing, DOJ attorneys must provide written justification and obtain approval from the Assistant Attorney General or U.S. Attorney handling the case.

  1. “Civil attorneys should consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on considerations beyond that individual's ability to pay.”

In deciding whether to bring charges against an individual, DOJ attorneys should consider factors such as (1) the severity of the individual’s misconduct, (2) whether the misconduct is actionable, (3) whether there is sufficient admissible evidence to obtain and sustain a judgment, and (4) whether pursuit of an action furthers an important federal interest. The fact that an individual may not be able to satisfy a judgment should not control the determination. The DOJ emphasizes that it is concerned not only with the short-term goal of financial recovery, but also with the long-term goal of deterring future misconduct.

This guidance is particularly relevant to health care providers, as the federal government continues to crack down on health care fraud.  In fiscal year 2014, the DOJ opened 924 new criminal health care fraud investigations and 782 new civil health care fraud investigations. Health care providers undergoing a federal investigation can expect that the conduct of individual executives will be subject to increased scrutiny by the DOJ in light of this recent guidance.