Photo: Diego M. Radzinschi/ALM

In the years since the 2008 financial crisis, it has become fashionable to point out that no executives were prosecuted for the questionable financial practices that led to the meltdown. The scarcity of prosecutions has served as a potent rallying cry for populist politicians and a cudgel for critics of the Justice Department.

It also likely explains much of the attention aroused by a recent book about how the DOJ lets corporate criminals off easy. “The Chickenshit Club: Why the Justice Department Fails to Prosecute Executives,” by Jesse Eisinger, makes the case that federal prosecutors are afraid to take complicated white-collar cases to trial, primarily because they are afraid to lose.

Corporate fraud is complex and hard to prove, and federal prosecutors like to be able to say they have never lost a case, Eisinger reports. So, when federal prosecutors are presented with evidence of corporate fraud, they often take the easy route—either offering lenient plea bargains or letting the companies off with deferred prosecution agreements.

We are not here to quibble with the book’s conclusions. We have served as federal prosecutors and as presidentially appointed, Senate-confirmed U.S. attorneys, so we can attest that the club Eisinger describes is real.

So if the barriers to corporate prosecutions are so high, can executives rest easy, figuring that if somebody in their organization is involved in fraudulent activity, it is unlikely to result in a prosecution? Moreover, does it still make sense for companies to throw so much money at expensive compliance efforts—software, training, policies, processes, outside counsel?

In reality, federal prosecutors around the country are increasingly focused on corporate crime. While those cases definitely present more challenges than other, less sophisticated, crimes, the DOJ is not only pursuing sophisticated criminal fraud schemes, it is also getting better at prosecuting them.

We have seen this from both sides, as U.S. attorneys supervising prosecutors, and as outside counsel advising clients on compliance matters. Drawing on that experience, and in support of the above observations, here are four good reasons to invest in and focus on compliance.

The Yates Memo

In the past two years, the DOJ has made a deliberate effort to shift away from prosecuting organizations and toward pursuing cases against the individuals responsible for corporate fraud. Former Deputy Attorney General Sally Yates codified that intent in an agency-wide directive two years ago.

Yates left the DOJ in January, but U.S. Attorney General Jeff Sessions has since affirmed the DOJ’s intention to follow the Yates memo’s focus on personal criminal liability in pursuing corporate crimes. Indeed, the line prosecutors in the 94 U.S. attorney offices are certain to keep pursuing these cases—no matter who is in the White House.

The FBI

Corporate fraud is prosecuted by U.S. attorneys’ offices, but it is investigated by the FBI. That means if the DOJ suspects your company is breaking the law anywhere in the world, it will be in the crosshairs of the world’s largest, most effective police force. An assignment of a complicated investigation to a marginally skilled assistant U.S. attorney will provide little solace because your company will have to contend with the FBI’s formidable investigative prowess, which can mask the shortcomings of any prosecutor.

The Expense

When federal law enforcement comes knocking, your first call will likely be to your outside compliance counsel. From that point, you will want counsel involved in every decision, communication and interaction with the DOJ. The expenses will accumulate even in the absence of a trial. They will not only involve legal fees but also lost productivity. In addition, a federal investigation can do extensive damage to commercial sales, public stock prices and customer relationships. Thus, even when an investigation concludes that no laws were violated or prosecution is not warranted, it will be very expensive.

The Risk

Of course, in a criminal fraud investigation, there is far more than money at stake. Jail time may be less of a concern if prosecutors are loath to bring corporate fraud cases to trial. However, it does not take a conviction, or a trial, to ruin reputation or standing in an industry. The mere accusation of corporate fraud can prove ruinous, destroy a career or traumatize a family.

Prosecutors are well aware of that. As U.S. attorneys, we always admonished our prosecutors to be mindful of the damage they could inflict just by launching an investigation. However, we never stopped them when the facts pointed toward a crime. Readers can be certain that these conversations are happening today at U.S. attorneys’ desks across the country.

Barnes & Thornburg partners Michael Battle and Roscoe Howard and of counsel Patrick Miles are former U.S. attorneys. Battle served as U.S. attorney in the Western District of New York, and Howard served as U.S. attorney in the District of Columbia under President George W. Bush. Miles was the U.S. attorney for the Western District of Michigan under President Barack Obama. This column should not be construed as legal advice.