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Memo Puts New Focus on Execs in Fraud Probes, Analysts Say

Bloomberg BNA - February 8, 2016

Partner and Co-Chair of the Firm's Federal Contracting Group, Michael Payne, was interviewed by David Hansen for his Bloomberg article, "Memo Puts New Focus on Execs in Fraud Probes, Analysts Say." The article was published on the Bloomberg BNA website on February 8, 2016.

By: David Hansen

Federal contractor executives should be concerned about the Department of Justice's (DOJ) new focus on prosecuting individuals in corporate fraud investigations, analysts told Bloomberg BNA.

The development increases the likelihood that officers will be investigated and company ethics plans will be scrutinized, they said.

A Sept. 9 memo by Deputy Assistant Attorney General Sally Quillian Yates announced that the DOJ should “fully leverage its resources to identify culpable individuals at all levels in corporate cases” because it was one of the “most effective” ways to fight corporate crime.

“It deters future illegal activity, it incentivizes changes in corporate behavior, it ensures that the proper parties are held responsible for their actions, and it promotes the public's confidence in our justice system,” she wrote in the memo.

Many innocent managers are trapped in an investigation triggered by the illegal conduct of lower-ranking employees, Cohen Seglias Pallas Greenhall & Furman, PC Partner Michael Payne told Bloomberg BNA Jan. 26. They often don't realize that the DOJ will try to discover if senior management was involved in any way, he said.

“Like any criminal matter, you always try to get the big fish,” he said.

To read the full article, please visit the Bloomberg BNA website.