Following a lengthy hiring freeze during which tireless federal prosecutors across the country faced furloughs and budget scrutiny, Reuters recently ran an article on the U.S. Department of Justice Fraud Section’s hiring of a compliance counsel to help prosecutors evaluate corporate compliance programs. According to the article, in determining whether to prosecute a corporation, the compliance counsel will help prosecutors distinguish between companies that have a robust compliance program and those that have a near-paper program.
Of course, the DOJ already has long-standing guidance on evaluating a compliance program for prosecutors to follow. After years of studying sentencing disparity between organizations and individuals, in 1991 the Sentencing Commission developed the organizational guidelines to try to ensure organizations received fines proportionate to the offense, type and size of organization, and compliance program. The organizational guidelines outlined what constitutes an effective compliance program:
- Putting in place standards and procedures to prevent and detect criminal conduct.
- Having leaders who oversee the compliance program to ensure effectiveness and adequacy of support.
- Denying leadership positions to people who have engaged in misconduct.
- Communicating standards and procedures of the compliance program, and conducting effective training.
- Monitoring and auditing; periodically evaluating program effectiveness; maintaining the reporting mechanism.
- Providing incentives; disciplining misconduct.
- Responding appropriately to allegations and modifying the compliance program.
- Periodically assessing risk; taking appropriate steps to design, implement or modify the program to reduce risk.
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