The lull in FCPA enforcement has greatly reduced the number of companies entering into pre-trial agreements, either deferred or non-prosecution agreements, plea agreements, or declinations with disgorgement. But there’s no detectable lull in federal criminal enforcement against companies for other offenses.
Who are those companies, and what are their federal crimes?
According to data from the U.S. Sentencing Commission, the number of companies sentenced for federal crimes has remained fairly constant for the past five years through FY2022.
In FY2018, 99 companies were sentenced, 118 in FY2019, 94 in FY2020, 90 in FY2021, and 99 in FY2022. Again, these numbers (and the ones that follow) don’t include companies entering into pre-trial agreements.
Most of the companies sentenced in FY2022 were located in the Unites States — 89.9 percent.
A similar percentage were non-public companies — 45.9 percent were closely-held or private, and an equal number were limited liability companies. Just 6.1 percent were publicly traded.
Most of the companies (81.4 percent) had fewer than 50 workers, while 7 percent had 1,000 employees or more.
Recidivists represented 15.8 percent of the corporate defendants sentenced for federal crimes in FY2022, with those companies having a history of misconduct involving any type of previous criminal or civil adjudications.
The most common primary federal offenses were fraud (40.4 percent), environmental (25.3 percent), money laundering (8.1 percent), and import/export (4.0 percent).
A majority of the fraud offenses (57.5 percent) involved mail or wire fraud. Healthcare fraud made up 25 percent of the fraud prosecutions, and false statements accounted for 17.5 percent of the cases.
Most of the federal corporate defendants (91.9 percent) pleaded guilty and the same number were ordered to pay a fine, restitution, or both.
The average fine was $9.4 million and the average restitution was $256.8 million. Just over 7 percent of the corporate defendants were ordered to forfeit money, with the average forfeiture being $22 million.
As part of sentencing, 21.2 percent of the companies were ordered to develop a compliance and ethics programs.
What about individual accountability for the corporate crimes? The DOJ indicted at least one individual in addition to the organization in 61.6 percent of the cases.
Of those individuals, 22.5 percent were owners, 6.8 percent were managers or supervisors, and 3.4 percent were board members.
Most of the indicted individuals — 67.3 percent — were “not high-level officials” and not necessary part of the indicted organization, according to the U.S. Sentencing Commission.