The United States Department of Justice (DOJ) has issued new guidelines regarding cooperation and credit for self-disclosure specifically in False Claims Act matters. Such guidelines provide an overview of factors to be considered and the credit that may be provided by DOJ attorneys to entities/individuals that “voluntarily self-disclose misconducts that could serve as the basis of False Claims Act (FCA) liability and/or administrative remedies, take affirmative steps to cooperate with FCA investigations and settlements, or take adequate and effective remedial measures.”

Once again DOJ is issuing guidelines which appear to reflect DOJ’s interest in incentivizing companies and individuals who voluntarily disclose misconduct to the government.

These guidelines highlight some of the following activities which DOJ may take into account in determining whether an entity/individual under a FCA investigation qualifies for cooperation credit. Such factors include, but are not limited to:

  • identifying individuals substantially involved in or responsible for misconduct, disclosing relevant facts and identifying opportunities for the government to obtain evidence relevant to government investigation that is not otherwise known to the government,
  • disclosing relevant facts to the government’s investigation gathered during an entity’s independent investigation,
  • admitting liability or accepting responsibility for wrongdoing,
  • making officers and/or employees who possess relevant information available for interviews or depositions
  • assisting the DOJ in the determination of discovery of the losses caused by the organization’s misconduct.

DOJ acknowledged the taking of appropriate remedial actions in response to FCA violation may also earn credit for an entity or individual. Such remedial measures include: performing a thorough analysis of the underlying conduct, implementing or improving an effective compliance program designed to ensure the misconduct does not reoccur, and appropriately disciplining or replacing those identified by the entity as responsible for the misconduct either through direct participation or failure in oversight.

The guidelines, however, ascertain that disclosure, cooperation and remediation credits are still at the total discretion of the DOJ. The value of credit awarded to an entity or individual by the DOJ will vary depending on the facts and circumstances of each case.

While the new guidelines will be important for individuals and corporate entities under an FCA investigation or that may potentially be investigated, the guidelines do not provide a private right of action; but rather serve as a guide to DOJ attorneys in using their discretion to credit disclosure, cooperation or remediation. Also, the guidelines do not change any pre-existing obligation an entity or individual has under the law to report or cooperate with the government. Lastly, the guidelines’ eligibility for credit for voluntary disclosure or other forms of cooperation does not require an individual or entity to waive attorney-client privilege or work product protection, and does not require individuals to give up their substantive and/or procedural rights.

This alert does not purport to be a substitute for advice of counsel on specific matters.

Harris Beach has offices throughout New York State, including Albany, Buffalo, Ithaca, Melville, New York City, Rochester, Saratoga Springs, Syracuse, Uniondale and White Plains, as well as New Haven, Connecticut and Newark, New Jersey.