On January 12, 2010, the United States Sentencing Commission (USSC) voted to publish for public comment guideline amendments that include proposed changes to the “Sentencing of Organizations” chapter which applies in calculating the appropriate sentence to be rendered to corporations and other business organizations when they have violated federal law.
Corporations should be aware that among the changes, the proposed amendments will:
(1) grant courts express authority to order monitors as a condition of probation, and
(2) allow for mitigation credit when a compliance officer is put in direct reporting contact with the board of directors, even in the circumstance where high-level personnel are involved in the criminal offense.
The public has 60 days, or until March 12, 2010, to submit written comments to the proposed amendments. The USSC will hold its public hearing to discuss the proposed amendments on Thursday, March 18, 2010, in Washington, DC.
Summary of the Relevant Proposed Amendments
In addition to proposing an expansion of the offense level zones (B and C) in the guidelines to make more individuals eligible for sentences not based on incarceration, the USSC proposes some significant changes to the guidelines which could create incentives for corporations to make compliance programs the centerpiece of effective corporate crime prevention and detection. These include amending the language of the guidelines, comments and application notes to:
The USSC will accept written comments related to the proposed amendment as published in the Federal Register until March 12, 2010. The specific question or issue for comment related to corporate sentencing is:
Should the Commission amend §8C2.5(f)(3) (Culpability Score) to allow an organization to receive the three level mitigation for an effective compliance program even when high-level personnel are involved in the offense if (A) the individual(s) with operational responsibility for compliance in the organization have direct reporting authority to the board level (e.g. an audit committee of the board); (B) the compliance program was successful in detecting the offense prior to discovery or reasonable likelihood of discovery outside of the organization; and (C) the organization promptly reported the violation to the appropriate authorities?
For information about Mayer Brown's White Collar Defense & Compliance practice, please visit mayerbrown.com.
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