White Collar Criminal Defense Group

DOJ Reveals New Corporate Enforcement Strategy

Takeaway: Changes in DOJ corporate compliance programs focus on prompt reporting and self-disclosure, and individual accountability. Companies can protect their interests by creating a diligent, comprehensive risk-based compliance program.

Following a major revision in corporate enforcement strategy that took place last fall, Deputy Attorney General Lisa Monaco announced the Department of Justice’s (DOJ) new corporate enforcement strategy on September 15, 2022. Prosecutors were urged to speed up investigations into corporate wrongdoing, companies were warned not to delay disclosures, and self-reporting programs were expanded.

Prompt Reporting and Voluntary Self-Disclosure

Under the new strategy, the DOJ aims to incentivize companies to promptly self-report corporate malfeasance. Monaco urged prosecutors to speed up investigations of individuals, noting that corporate prosecutions have declined over the past few decades. To deter companies from delaying these investigations, Monaco stated that any cooperating company that does not promptly turn over documents and information to the government in an investigation may lose some or all credit for cooperating. 

Monaco reiterated previous DOJ guidance, strongly urging companies to voluntarily self-disclose instances of wrongdoing. As an incentive to self-disclose, Monaco stated that absent substantial aggravating factors, the DOJ will not seek guilty pleas in situations where the wrongdoing is voluntarily self-disclosed and remediated.

Individual Accountability

Monaco’s new strategy focuses heavily on individual accountability and suggests a more aggressive approach to individual prosecutions. Cooperating companies are required to come forward more quickly with evidence of individual malfeasance. Monaco stated that when a company discovers evidence suggesting individual criminal liability, it should immediately turn that evidence over to the DOJ.  Failing to promptly turn over evidence against individuals will endanger a company’s cooperation credit. Monaco also informed that the DOJ would not enter into deferred prosecution agreements with companies until the DOJ has begun individual prosecutions or has created an investigative plan to do so.

As an incentive, companies that claw back compensation from employees engaged in wrongdoing are looked upon more favorably. Monaco emphasized the importance of companies holding individuals accountable for their own actions, stating “compensation systems that clearly and effectively impose financial penalties for misconduct can deter risky behavior and foster a culture of compliance.”

Corporate Recidivism

Monaco addressed the DOJ’s position on recidivist corporate offenders, informing that even prior unrelated misconduct would factor into the resolution of corporate criminal cases. To alleviate concerns arising from this factor, Monaco clarified that criminal resolutions taking place more than 10 years prior to a company’s current misconduct, and civil or regulatory settlements more than five years prior, would be given less consideration. 

However, Monaco detailed that the DOJ did not wish to deter acquisitions of companies with a history of compliance issues. If an acquisition results in an enhanced compliance program, the DOJ will give additional goodwill to acquiring companies that voluntarily self-disclose criminal conduct and significantly improve corporate compliance.

Read Deputy Monaco’s statement at: https://www.justice.gov/opa/speech/deputy-attorney-general-lisa-o-monaco-delivers-remarks-corporate-criminal-enforcement

Implications

The DOJ emphasized that these changes were meant to encourage companies to develop a robust compliance system. Companies that devote the time and resources to strengthening compliance will be able to prevent and detect individual malfeasance and are less likely to face heavy penalties in the event of a violation.

Considering these new policies, it is imperative that corporations build a comprehensive, risk-based compliance program and conduct thorough due diligence in acquisitions. The attorneys at Pietragallo Gordon Alfano Bosick & Raspanti, LLP  are skilled at assisting corporations in enhancing compliance and responding to government enforcement actions.  We assist clients in all 50 states, the District of Columbia, and abroad. 

Medical Practitioners Beware:  Telemedicine Schemes May Result in Unexpected Liability

Takeaway: Medical practitioners should exercise extreme caution when entering into telemedicine agreements, in order to avoid unintended civil and criminal consequences.  It is advisable to consult with an attorney before entering any such agreements.

On July 20^th, the Office of Inspector General (OIG) issued a Special Fraud Alert, warning practitioners to exercise extreme caution when entering into arrangements with telemedicine companies.

After multiple investigations into fraud schemes involving companies that purport to provide telehealth, telemarketing, or telemedicine services, the OIG has found that many of these companies exploit medical practitioners who may unknowingly become entangled in fraudulent schemes.

The OIG has issued guidance warning practitioners of ways to identify telemedicine companies that may be engaging in illicit activity. The most common element of these schemes involves kickbacks – schemes wherein telemedicine companies pay practitioners in exchange for ordering or prescribing services that are either medically unnecessary or for patients with whom the practitioner has limited interaction.

OIG cautions medical practitioners to exercise extreme caution and be vigilant when entering into agreements with telemedicine companies. It is important that they be cautious because practitioners could ultimately find themselves criminally and civilly liable under multiple federal laws, including the Anti-kickback statute, fraud, and False Claims Act.

OIG has identified several “suspect characteristics” that can alert practitioners to these potentially dangerous and fraudulent arrangements. Those “suspect characteristics” include, but are not limited to, the following:

• Patients identified or recruited by telemedicine companies, a telemarketing company, health fair, or through internet or social media advertising free or low-cost services.
• The practitioner is not provided with sufficient information about the potential patient, that would allow the practitioner to independently assess the medical necessity of the services or items to be prescribed.
• The telemedicine company compensates the practitioner based on volume.
• The telemedicine company does not accept insurance from any other payor besides Federal health care programs.
• The telemedicine company claims to only service individuals who are not Federal healthcare beneficiaries (but may, in fact, bill Federal health care programs).
• The telemedicine company provides only one product or a single type of service, which may potentially restrict the practitioner’s treatment options to a particular type of treatment.
• The telemedicine company does not expect the medical practitioner to follow up with patients after a visit, nor does it provide the practitioner with required information needed for such follow-up.

It is important to note that this is not an exhaustive list, and the presence of one or more of the above characteristics does not in itself create an assumption of wrongdoing on the part of a telemedicine company. However, it is imperative that practitioners protect themselves from unintended consequences of entering into what may initially appear to be a legitimate arrangement with a telemedicine company. The consequences for medical practitioners can be dire – including criminal, civil, and administrative liability. Medical practitioners considering partnerships with telemedicine companies would be wise to consult with an attorney before entering into any such agreement.

The official statement of the OIG can be read here. 

The attorneys at Pietragallo Gordon Alfano Bosick & Raspanti, LLP  are skilled at assisting health care providers in enhancing compliance and responding to government enforcement actions.  We assist clients in all 50 states, the District of Columbia, and abroad.