DOJ Issues Guidance on "Inability-to-Pay" Claims

DOJ provided guidance for prosecutors evaluating claims from a business organization that it is unable to pay a proposed fine or penalty, despite agreeing that the amount is otherwise appropriate to settle the matter.

According to the memorandum by Assistant Attorney General Brian Benczkowski, when settling a corporate criminal case, prosecutors must evaluate a business organization's claim of being unable to pay a fine by considering (i) certain statutory sentencing factors and (ii) the DOJ Manual's principles on collateral consequences. He added that a business organization is responsible for establishing an inability to pay, and must make company personnel available for interviews.

The guidance outlined several factors that will be determined by analyzing a business organization's response to questions on the attached Inability-to-Pay Questionnaire, including:

  • what led to the business organization's financial condition;
  • the business organization's ability to raise capital through current or new credit facilities;
  • adverse collateral consequences; and
  • whether the penalty amount will affect the business organization's ability to pay restitution to victims involved.

Tags