DOJ Guidance a Measuring Stick for Compliance Programs

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By Eric Topor

The DOJ recently provided health-care fraud attorneys with a detailed view of how the agency evaluates corporate compliance programs in fraud investigations, providing much-needed practical guidance for the industry.

The guidance, titled Evaluation of Corporate Compliance Programs, was published Feb. 8 by the Department of Justice’s Criminal Division. It consists of a series of questions federal prosecutors “may ask in making an individualized determination” of how to judge a corporation’s compliance efforts in a fraud investigation.

Michael W. Peregrine, a partner with McDermott Will & Emery in Chicago, told Bloomberg BNA Feb. 22 that compliance attorneys have been waiting for this type of practical guidance from the DOJ. Peregrine, who focuses his practice on corporate governance, said the document was “conduct-focused,” and provides corporate boards and general counsels with “practical, nuts and bolts” guidance. “It’s the most detailed thing we’ve ever had” from the DOJ, Peregrine said.

New Attorney General

Melissa L. Jampol, with Epstein Becker & Green, saw a connection between the timing of the guidance and the confirmation of Jeff Sessions as attorney general on Feb. 8. Jampol, a New York member in the firm’s life sciences practice, told Bloomberg BNA Feb. 22 the guidance’s release signals the DOJ’s intention to continue its current course of pursuing health-care fraud, especially in light of the monetary return generated from health-care fraud enforcement and the growing share of the economy devoted to health care.

The effectiveness of an existing corporate compliance program is one of the factors that DOJ attorneys use in deciding whether to bring fraud charges against a corporation accused of fraud, pursuing other types of corrective actions or deciding against bringing charges at all. The guidance isn’t specific to any industry, and draws extensively from the agency’s Foreign Corrupt Practices Act Guide, released in 2012.

Although the document explicitly applies to criminal investigations, Jampol said the questions it asks of compliance programs “could also apply to civil investigations, and civil negotiations” with the DOJ.

Jampol added that corporate attention to DOJ compliance concerns can pay dividends “in terms of the resolution you get with the DOJ.” Cooperation “is definitely rewarded” by the DOJ, Jampol said, and this guidance “provides a roadmap for discussions with the DOJ.”

Essential Reading

Peregrine said the guidance was “important reading for general counsels, compliance officers and audit compliance committees,” and provides a standard for a corporation to compare to its own compliance program and efforts.

The guidance covers a broad range of topics, from internal investigations to program design to merger and acquisition concerns. Peregrine noted that not all of the guidance is applicable to all corporations or industries, and it’s up to a corporation’s general counsel and audit compliance committee to interpret the guidance and determine which portions are relevant to its own situation.

Jampol said the DOJ wants companies to undertake “vigorous internal investigations,” the subject of the first section of the guidance (Analysis and Remediation of Underlying Misconduct), and shows an “emphasis on proactive, not reactive” compliance protocols. “You need to have a game plan in advance” on how to handle a problem, Jampol said, and be able to respond to agency search warrants and civil investigative demands, and to put necessary litigation holds on electronic records in place.

The guidance also outlines agency concerns for “Confidential Reporting and Investigation,” which could be applicable to how a corporation responds to whistle-blowers who are ringing internal alarm bells about questionable corporate conduct. Jampol said there has been a trend of compliance officers filing whistle-blower actions under the False Claims Act after their concerns were spurned.

To contact the reporter on this story: Eric Topor in Washington at

To contact the editor responsible for this story: Peyton Sturges at

For More Information

The guidance is at

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