More Corporate Guilty Pleas Coming Soon, Says US Criminal Chief

The Justice Department’s criminal chief said “a number of guilty pleas” are coming from corporations in early 2024, as DOJ faces bipartisan criticism from Capitol Hill over the pace and toughness of white-collar enforcement.

A series of company settlements following DOJ white-collar investigations “just missed” closing before the New Year, but are now expected in January and February, said Nicole Argentieri, the criminal division’s acting assistant attorney general, in a Dec. 28 interview. She didn’t specify their nature beyond saying they’ll be “impactful” and “involve different industries.”

Lawmakers, former prosecutors, and other critics have pointed to a decline in annual corporate prosecutions and settlements, but Argentieri said the department’s nine corporate resolutions in 2023 reveal a “robust” enforcement record. Newly revised policies to incentivize self-disclosures of company misconduct and a heightened focus on individual accountability are already bearing results, she said.

The number of corporate resolutions per year, which in the previous decade routinely hit double figures before slowing in the past few years, are “not the most important measure,” said Argentieri, who’s run the division on an acting basis since August. Instead, she highlighted the statistics that she said show DOJ is leveraging limited resources to achieve maximum impact.

“When you look at the average loss in cases charged by our fraud section—over $25 million per individual defendant— average penalties in our corporate resolutions—$350 million— those are the highest numbers in years,” Argentieri said. “Those numbers really demonstrate the scale and complexity of our white-collar cases.”

The corporate penalty figure is heavily skewed by the department’s $4.3 billion settlement with Binance, the world’s largest cryptocurrency exchange.

Argentieri spoke following her Dec. 12 appearance at a Senate hearing in which members from both parties knocked the department for going too soft on corporate misconduct, particularly when it comes to prosecuting executives. Senate Judiciary Committee Chair Dick Durbin (D-Ill.) cited numbers from a recent Public Citizen analysis that he said prove “federal prosecutions of corporate crime have reached record lows under both the Trump and Biden administrations.”

Argentieri didn’t directly refute those findings. Instead, she countered that DOJ is “actively focused on bringing cases to hold culpable individuals and corporations accountable.”

She noted that in the majority of the nine resolutions plus three corporate declinations, DOJ prosecuted individuals either before or simultaneous to settling with the company. Overall, the criminal division charged more than 290 individuals in 2023, including 30 executives, she said.

Prosecutors have been adhering to a 2022 directive from Deputy Attorney General Lisa Monaco that they “must strive” to complete investigations into individuals either before or simultaneous to concluding the related corporate probe.

“This was a gut check to remind us all that we need to act with urgency,” Argentieri said. “Individuals have always been front of mind for us, but it’s an additional push so that we’re talking about it at every stage of the investigation.”

Complex Trials

Yet the department, in prepared testimony for last month’s Senate Judiciary Committee hearing, acknowledged that its insistence on corporate guilty pleas and steep jail sentences for executives presents challenges. “Well-resourced white collar and corporate defendants are using every tool available in an attempt to escape accountability,” DOJ stated in materials submitted to the Senate panel.

Asked about that statement, Argentieri said, “What it means, and I think what the numbers show, is that we’re trying more cases than ever.”

There were more than 40 white-collar trials in 2023, coming off a record-high 52 in 2022, as federal courts addressed pandemic-era backlogs.

Policies Working

Over the past year, federal prosecutors and defense lawyers started operating under revised policies in January that offered reduced penalties and a clearer path to avoid prosecution to companies that voluntarily report wrongdoing.

Some white-collar defense lawyers have been skeptical about advising corporate clients to take advantage of DOJ’s increased incentives to self-report when they’ve uncovered potential violations. Losing control of the outcome and costs—and on a matter DOJ may never learn about otherwise—often makes companies reluctant to confess.

Argentieri declined to provide the number of company self-reports in 2023.

“What I can say to you is we’re seeing a really healthy number, including self-reporting outside of the FCPA context,” she said.

Results are also coming in from another policy shift in March to provide penalty discounts to companies that claw back compensation from executives responsible for the wrongdoing, Argentieri said.

“Companies have expressed a real interest in availing themselves of this pilot program. You’re going to see additional resolutions next year in which companies try to take advantage of that,” she said.

Those resolutions may not satisfy congressional critics who want guilty pleas, rather than deferred and nonprosecution agreements that they say are too lenient or lack transparency.

More than half of the nine corporate resolutions in 2023 were DPAs or NPAs. Argentieri repeated her forceful defense at the Senate hearing of such settlements, which allow companies to avoid indictment provided they satisfy compliance obligations.

“I cannot say this enough: Deferred prosecution agreements, nonprosecution agreements are not a pass,” she said. “They contain basically almost all of the same requirements as a guilty plea.”