DOJ Announces New Civil Division Guidelines For False Claims Act Cooperation
The Civil Division of the DOJ recently released formal guidance explaining the process for awarding credits to defendants who cooperate during False Claims Act (FCA) investigations. Entities or individuals under investigation seeking maximum credit in a FCA matter should do three things: 1) timely self-disclose and identify individuals who were substantially involved in or responsible for misconduct; 2) fully cooperate with an investigation; and 3) take remedial steps designed to prevent and detect recurrence of similar wrongdoing. Partial cooperation credit can also be awarded if meaningful assistance to the government’s investigation is provided.
While noting that the value of credit awarded varies depending on the facts and circumstances of each case, cooperation credit may include a reduction of penalties or a lower damages multiple sought by the DOJ.
Other factors included in a DOJ attorney’s evaluation of awarding credit in an FCA matter include the following: the nature, seriousness and scope of the violation; the extent of damages; recidivism by a defendant; harm or risk of harm from a violation; whether the national interests are adequately served by a compromise; the ability of a wrongdoer to satisfy a judgment; and litigation risks presented if the matter proceeds to trial.
With regard to “proactive, timely, and voluntary self-disclosure” of misconduct to the DOJ, the Guidelines underscore that this better enables the government to make itself whole from previously unknown false claims and fraud, and/or to enable the preservation and gathering of evidence that might otherwise be lost.
A non-comprehensive list of ten (10) actions that may constitute cooperation with an ongoing investigation is also provided and includes, inter alia, the following: identifying individuals involved in or responsible for misconduct; preserving, collecting and disclosing relevant documents; making officers and employees available for investigatory interviews; and admitting liability or accepting responsibility for misconduct.
With regard to remedial measures, the DOJ will consider actions including analysis of the cause of underlying conduct and steps taken to remediate such a cause, effective compliance program implementation, and disciplinary measures against those identified as responsible for misconduct.
The Guidelines point out that cooperation does not include legally required disclosures, responding to a subpoena, civil investigative demand, or other compulsory request for information, nor is it to be awarded for disclosing information under imminent threat of discovery or investigation. Finally, the Guidelines note that the existence of the internal guidance for the DOJ does not prevent entities and individuals from asserting their legal rights and, unless required by law, they do not have to cooperate with an investigation into FCA violations.
The Guidelines may be viewed here.
