Recently Acting Assistant Attorney General Brian Rabbitt delivered this virtual speech to a White Collar Crime workshop.
As excerpted below, Rabbitt touched upon a variety of white-collar crime topics including individual accountability, DOJ policy, and data analytics.
Regarding white-collar crime generally, Rabbitt stated:
“[W]hite-collar crime comes in a variety of forms. Our experience has shown us that corporate criminal activity is increasingly sophisticated and also increasingly global. Because of this, the Criminal Division has in recent years sought to leverage all the considerable resources and law enforcement tools at our disposal to tackle white-collar crime. Equally important, we have developed and relied on strong relationships with law enforcement partners around the globe to investigate and prosecute corporate criminal misconduct no matter where it occurs.
As you likely are aware, our white-collar enforcement work has kept up with, and by many measurements exceeded, our pace in recent years. For example, as of the middle of this month, the Criminal Division’s Fraud Section had publicly charged nearly 300 individuals, convicted over 180 criminal defendants, and entered into 12 corporate criminal resolutions—which, combined, have involved over $8.75 billion in global fines, penalties, restitution, and disgorgement. In addition to our Fraud Section, the Division’s Money Laundering and Asset Recovery Section—which is an equally important part of our white-collar enforcement work—has had an incredibly productive year as well, concluding a number of significant resolutions with major U.S. and international financial institutions.”
These matters have covered the waterfront in terms of subject matter, involving everything from international bribery cases brought under the Foreign Corrupt Practices Act, to investment and consumer fraud cases, to manipulation of public U.S. financial markets, to money laundering. Taken together, they show that the Criminal Division has been pressing forward on all fronts over the past year when it comes to white-collar criminal enforcement.
I will also note something that, I am sure, all of you know too well: our work this year has come in the midst of an ongoing global pandemic that has significantly disrupted the legal industry along with the rest of the world. While COVID-19 has undoubtedly impacted our work, the dedicated women and men of the Criminal Division have not let it stop them from pursuing and fulfilling our mission. I have said many times over the past year that the Criminal Division remains “open for business.” That remains true. As our results show, 2020 has been an incredibly busy year for us—even with COVID-19—and we’re not done yet.”
Rabbitt then discussed a few “key aspects” of the DOJ’s white-collar enforcement work over the past year.
“First are the significant, high-impact corporate prosecutions we’ve brought over the past year. Among them are some of the most significant corporate criminal matters ever prosecuted by the Justice Department. Indeed, 2020 was bookended by the two largest FCPA-related resolutions in history—the Airbus case, which we resolved in January, and the Goldman Sachs 1MDB case, which we announced just a few weeks ago. Both of these matters were landmark resolutions for the Criminal Division, and they—along with our other FCPA matters—clearly demonstrate that combatting international corruption remains a priority for the Criminal Division. Both cases also involved significant cooperation and coordination with key international partners, and they reflect our commitment to working with other law enforcement authorities around the world to tackle large-scale white-collar criminal misconduct that crosses borders.”
Regarding individual accountability, Rabbitt stated:
“A second highlight of our work over the past year has been our continued focus on ensuring meaningful individual accountability for white-collar criminal wrongdoing. Earlier, I mentioned the hundreds of individuals whom we have publicly charged this year. It is important to note that many of these individuals were charged in connection with some of our most-significant corporate cases. For example, in the Goldman Sachs 1MDB case that I mentioned a short while ago, a senior banker has pleaded guilty, another is awaiting trial, and a third individual has been indicted and remains a fugitive. We have similarly charged a significant number of individuals in connection with our spoofing matters.
Why do we focus on individual accountability in addition to pursuing corporations? Because we understand that corporations necessarily act through their officers and employees, and that to have a truly meaningful deterrent effect, our work must focus on not only entities, but also individuals where appropriate. As our individual prosecutions over the last year show, the Criminal Division will continue to hold culpable individuals accountable for their roles corporate criminal wrongdoing in appropriate circumstances, even where doing so requires us to pursue an organization’s senior personnel.”
As highlighted in this prior post, in recent years approximately 80% of corporate DOJ FCPA enforcement actions have lacked any related FCPA charges against company employees.
Rabbitt next talked about how the DOJ is adapting and responding to “new and evolving challenges with innovative tools and solutions.”
“For example, the Division has increasingly used data analytics to identify suspicious activity by individuals and entities in a number of areas, including the healthcare and financial services industries. The spoofing matters that I mentioned just a few minutes ago, for example, were an outgrowth of the Division’s pioneering use of data analytics to detect and investigate sophisticated criminal activity in the financial markets. While we still rely on traditional investigative tools to develop and prove our cases, data analytics can help us spot and respond to suspicious trends that might otherwise go unnoticed. In other words, it can help us find the proverbial “needle in the haystack.” Data analysis is a powerful tool that we first developed through our work in the healthcare fraud space before adapting it for other areas, such as the financial markets, and I expect that it will play an increasingly important role in our work in the years ahead.”
Regarding DOJ policy, Rabbitt stated:
“In addition to our work prosecuting corporate criminal misconduct, the Department’s Criminal Division has also focused in recent years on developing and implementing a number of policies intended to ensure transparency and predictability on our approach to white-collar criminal enforcement. This past year—in which we revised and updated two key Criminal Division policies—was no exception.
First, this summer, we announced key updates to the Division’s Evaluation of Corporate Compliance Programs guidance. Corporate compliance programs have become increasingly important in recent years, and they can have a significant impact on how we evaluate and resolve cases involving corporate defendants. This summer’s updates provide the Criminal Division’s latest thinking on this important topic. When considering whether and how to resolve corporate criminal cases, we will consider the state of a corporate defendant’s compliance program at the time of the offense and at the time of the proposed resolution. The updates that we released earlier this year built on our prior guidance and emphasized, among other things, that in the Division’s view, corporate compliance programs need to be both well designed and well implemented. As we explain, it is not enough for a company to simply have a good compliance program on paper. The program must also be adequately resourced and function effectively in practice.
This year, we also published an updated and revised edition of our Resource Guide to the Foreign Corrupt Practices Act. This joint DOJ-SEC publication has become a key resource for DOJ attorneys and FCPA practitioners worldwide, and it provides a comprehensive overview of the Criminal Division’s approach to FCPA enforcement. This year’s revisions addressed a number of changes in the FCPA space that have occurred since we first published the Guide in 2012.
Since their original issuance, these policies have become critical tools for the Division, corporate actors, and counsel. In updating them this year, we sought to stay current with developments in the law and provide guidance where appropriate, all with the overarching aim of ensuring consistency and transparency—and, ultimately, fairness—in our enforcement efforts.”
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