Impact of the Yates memo

Businessman in handcuffs with his back turned
(Getty/Image Source)

Perhaps the biggest enforcement initiative of 2015 was the release of the Yates memo, which called for more individual accountability in both civil and criminal white-collar cases. The impact was almost immediate.

Two cases in 2016 sought to test the legal resolve of the Justice Department’s new policy, and in both, federal prosecutors came up short.

After much anticipation, Warner Chilcott CEO W. Carl Reichel was acquitted of charges that he oversaw a kickback scheme, instructing sales reps to lure physicians with free meals and speaking fees (although two Warner Chilcott managers were sentenced for their involvement). Likewise, former Acclarent CEO Bill Facteau was acquitted of 14 felony charges that he improperly marketed the company’s sinus surgery devices (although he was found guilty of 10 misdemeanor counts, which he has appealed).

Experts have said that the Yates memo will keep executives in the crosshairs and shape fraud enforcement in the coming years. This directive highlighting individual accountability probably isn’t going away, but the two verdicts underscored important challenges inherent in the Yates memo and the difficulty of prosecuting these cases. Gejaa Gobena, a partner at Hogan Lovells and the former deputy chief of the fraud section in the DOJ's criminal division, said that going forward, prosecutors will need to rely on documentary evidence in order to link fraud charges to a specific individual.

Impact of the Yates memo