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In United States v. Chastain, No. 23-7038, 2025 WL 2165839 (2d Cir. July 31, 2025), the United States Court of Appeals for the Second Circuit vacated wire fraud and money laundering convictions in what the government described as its first crypto insider trading case. The case involves a former employee of OpenSea, an online non-fungible token (“NFT”) marketplace, who allegedly used confidential information about which NFTs would be featured on OpenSea’s homepage to purchase those NFTs before they were promoted, then sold them after a post-promotion price bump for a profit. At trial, the United States District Court for the Southern District of New York instructed the jury that property protected by the wire fraud statute need not have commercial value, and the defendant could be convicted of wire fraud by failing to abide by societal mores. On appeal, the Second Circuit held that both instructions were prejudicial error that warranted a new trial. The Second Circuit’s decision follows the United States Supreme Court’s recent lead in curtailing the reach of the federal wire fraud statute. The decision also has broader implications for the crypto industry, as it limits the situations in which prosecutors can sidestep the debate of whether a digital asset is a security or commodity by pursuing wire fraud in lieu of securities or commodities fraud charges.Continue Reading Second Circuit Vacates Fraud Conviction in First Crypto “Insider Trading” Case

The U.S. Department of Justice (“DOJ”) Data Security Program (“DSP”) 90-day enforcement grace period ended as of July 8, 2025. While the program became effective April 8, 2025, DOJ implemented a 90-day enforcement grace period until July 8, 2025 for good-faith efforts towards compliance (see our previous blog here). With the expiration of the grace period, the majority of the DSP is now effective and will be enforced.Continue Reading DOJ’s 90-Day Data Security Compliance Grace Period is Over: Are You Compliant?

A federal district court in the Middle District of Florida issued a decision on Sept. 30th that threatens the federal government’s continued reliance on the False Claims Act (“FCA”) as the most powerful weapon in the Department of Justice’s enforcement arsenal. U.S. District Judge Kathryn Kimball Mizelle threw out a case against a group of Medicare Advantage organizations and providers on the grounds that an individual whistleblower suing on behalf of the federal government under the FCA, often called a “relator” in a “qui tam” lawsuit, violates the U.S. Constitution’s “appointments clause.” The Court concluded that relators, who are acting on behalf of the federal government, must be considered officers of the government and appointed in a manner consistent with Constitutional requirements. See U.S. ex rel Zafirov v. Florida Medical Associates, LLC, No. 8:19-cv-1236, 2024 U.S. Dist. LEXIS 176626, ECF No. 346 (M.D. Fl. Sept. 30, 2024).Continue Reading FCA Whistleblowers – No More?

On August 22, 2024, the United States Department of Justice (“DOJ”) filed a Complaint-In-Intervention (the “Complaint”) against the Georgia Institute of Technology (“Georgia Tech”) and Georgia Tech Research Corp. (“GTRC”). The 99-page DOJ Complaint alleges the defendants knowingly failed to meet contractual cybersecurity requirements in connection with various Department of Defense (“DoD”) contracts. The suit raises claims under the False Claims Act and federal common law (including fraud, negligent misrepresentation, breach of contract, unjust enrichment, and payment by mistake). This is the latest DOJ activity relating to its Civil Cyber Fraud Initiative (announced in October 2021), which we previously have written about here, here, and here.Continue Reading DOJ Sues Georgia Tech Entities for Cybersecurity Failures in the Latest Civil Cyber Fraud Initiative (CCFI) Activity

On June 17, 2024, the Department of Justice (“DOJ”) announced the latest settlement under its Civil Cyber-Fraud Initiative (“CCFI”) (previously discussed here).[1] The settlement resulted in a total of $11,300,000 in payments from two consulting companies (Guidehouse, Inc., the prime contractor, which paid $7,600,000; and Nan Kay and Associates, the subcontractor, which paid $3,700,000) to resolve allegations the two companies violated the False Claims Act by failing to meet cybersecurity requirements in federally-funded contracts.Continue Reading Latest Cyber-Related FCA Settlement Underscores the Breadth of DOJ’s Civil Cyber-Fraud Focus

Last week, the Department of Justice (“DOJ”) announced it declined to prosecute Lifecore, a U.S. biomedical company, after Lifecore voluntarily disclosed that a company it acquired paid bribes to Mexican officials and falsified documents both before and after Lifecore’s acquisition.[1] Continue Reading Voluntary Self-Disclosure of FCPA Violations Following Acquisition Avoids Corruption Charges

It has been another busy year for the Department of Justice’s Procurement Collusion Strike Force (PCSF). Formed in 2019, the Department of Justice created the PCSF, a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact government procurement, grant, and program funding at all levels of government – federal, state and local. The PCSF is a constellation of partnerships among the Antitrust Division of the U.S. Department of Justice, multiple U.S. Attorneys’ Offices around the country, the Federal Bureau of Investigation (FBI), and the Inspectors General for multiple federal agencies working together to crack down on unlawful anticompetitive activities in the public procurement process.Continue Reading Government Contracting Companies Beware: DOJ’s Procurement Collusion Strike Force is Global, Growing, and Going Strong

On February 22, 2023, the U.S. Department of Justice (DOJ) announced a new nation-wide policy to incentivize companies to self-report criminal activity. Among the cited benefits of self-reporting are discounts on fines and non-prosecution agreements. This new policy arrives on the heels of the “Monaco Memo,” issued in September 2022 by Deputy Attorney General Lisa Monaco, which directed each prosecutorial DOJ component to review its policies on corporate voluntary self-disclosures and update to reflect the guidance’s core principles. The policy also is in addition to guidance from Attorney General Merrick Garland, who in December 2022 emphasized prosecutorial leniency in criminal cases. Together, these memos show a shift from prior administrations, which emphasized prosecuting the “most serious, readily provable offense,” not leniency for self-disclosures. Notably, the new policy does not impact individual actors, who, since the 2015 Yates Memo, still are a DOJ priority. Indeed, the new policy emphasizes that crediting voluntary self-disclosure by companies will help DOJ “ensure individual accountability” for individual criminal conduct. We break down key elements of the DOJ’s policy below, including our quick thoughts on how this policy may impact corporate decisions going forward. Continue Reading Corporate Voluntary Self-Disclosure (VSD) of Criminal Activity: More of the Same or a Real Sea Change?

A federal court filing by a fintech company revealed that it has been under investigation by the Department of Justice (“DOJ”) in relation to its Paycheck Protection Program (“PPP”) loan approval practices for over a year. This rare disclosure of a pre-indictment DOJ investigation warns that the government is refocusing enforcement efforts to the fintechs and financial institutions that administered PPP loans.Continue Reading Court Filing Reveals that DOJ Is Investigating Fintech’s Administration of PPP Loans

Procurement Collusion Strike Force

The Procurement Collusion Strike Force, formed by the Department of Justice in 2019, is ramping up enforcement pressures against government contractors. The Strike Force brings together the DOJ Antitrust Division criminal offices, state Attorneys General, and federal agencies such as the Department of Defense and Federal Trade Commission.[1] The Strike Force is an effort to crack down on anticompetitive activities in public procurement, which the DOJ views as particularly susceptible to the costs of collusive activity.[2] The Department was already devoting significant resources to public procurement crimes,[3] and the Strike Force represents an intensified, all-hands approach to enforcement.Continue Reading Government Contractors Facing Increased Antitrust Scrutiny

The inattention some companies pay to their ethics and compliance program never ceases to surprise us. You’d think the frequency of DOJ press releases and prosecutions holding companies accountable for employee wrongdoing would be enough to scare any business into directing more resources at prevention. But alas, many businesses, often over the protestations of their under-resourced Chief Ethics and Compliance Officers (CECOs), continue to think they can get by with a minimalist approach to ethics and compliance. Our experience suggests otherwise.
Continue Reading DOJ’s Renewed Focus On Corporate Ethics & Compliance Programs Highlights Importance Of Organizational Integrity