Plan Now or Pay Later: The Role of Compliance in Criminal Cases

I. INTRODUCTION II. THE U.S. SENTENCING GUIDELINES A. The Need for Uniform Charging Practices B. United States v. Booker and the Advisory Guideline System III. FEDERAL CHARGING PRINCIPLES AND THE DEVELOPMENT OF COMPLIANCE AS A FACTOR IN CORPORATE CHARGING AND SENTENCING A. General Federal Charging Principles for Both Individual and Corporate Cases B. The Organizational Guidelines and the Rise of Compliance as a Charging Consideration C. Federal Charging Principles Applicable to Organizations IV. CALCULATING A CORPORATE SENTENCE UNDER CHAPTER EIGHT A. Step 1: Determining the Offense Level B. Step 2: Applying the Offense Conduct to the Fine Table C. Step 3: Determining the Culpability Score D. Step 4: Applying the Culpability Score to the Multiplier Table V. 2010 REVISIONS TO THE ORGANIZATIONAL SENTENCING GUIDELINES VI. OECD GUIDANCE VII. KEY CONCEPTS IN CORPORATE COMPLIANCE AND HOW TO USE COMPLIANCE PROGRAMS EFFECTIVELY A. An Overview of Deferred and Non-Prosecution Agreements B. Compliance and Deferred and Non-Prosecution Agreements C. The Emergence of Compliance as the Central Feature in DPAs/NPAs D. Recent DPAs and NPAs Reflect Compliance as a Trend E. The Corporate Monitor As A Compliance Mechanism VIII. CONCLUSION I. INTRODUCTION Compliance failures can cause damage to a corporation's reputation, result in millions of dollars in fines, investigative costs and legal fees, and divert valuable management time and resources. In addition to the economic costs stemming from compliance failures, compliance has become a key corporate charging consideration for federal prosecutors and an important sentencing consideration for companies convicted of violating federal law. Compliance as a charging and sentencing consideration is a natural outgrowth of the concept of treating corporations as legal persons criminally responsible for the acts of their employees and agents. In 2010, the Supreme Court reinforced the idea of the corporation as a person in Citizens United v. Federal Election Commission. (1) And 2009 marked the hundred year anniversary of the Supreme Court's decision in New York Central & Hudson River Railroad Co. v. United States, which first minted the idea that corporations could be held criminally liable for the acts of an employee. (2) Over the past hundred years, courts have steadily expanded the holding of New York Central. (3) The current framework for corporate criminal prosecutions renders a corporation liable for the criminal acts of its employees if the acts are performed within the scope of employment and with at least a partial intent to benefit the employer. (4) Over the past century, it has also become easier for prosecutors to charge and convict corporations. The increased ease in prosecution is largely attributable to the evolution of principles such as respondeat superior, which holds corporations responsible for the misdeeds of employees undertaken to benefit the company in some way, (5) and collective knowledge, which enables prosecutors to aggregate knowledge of a crime to prove corporate criminal liability. (6) These corporate liability principles apply notwithstanding an employee's position in an organization and despite any robust compliance program a company may have in place. (7) In response to these trends, corporate compliance programs have become increasingly vital tools in helping companies detect and prevent unlawful conduct by employees. (8) As corporations began to focus on compliance, so did the United States Department of Justice (DOJ). Indeed, the DOJ has long considered a company's compliance program in corporate charging, even before it issued formal corporate charging guidelines in 1999. …