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. 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. 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. The Department was already devoting significant resources to public procurement crimes, 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
On March 8, 2022, just five months after the creation of the Department of Justice’s (“DOJ”) new Civil Cyber-Fraud Initiative (previously discussed here), the DOJ announced its first settlement of a cyber-related fraud case. Under the settlement agreement, Comprehensive Health Services LLC (“CHS”) will pay $930,000 to resolve whistleblower allegations that it violated the False Claims Act by (among other things) failing to properly store and handle confidential information. This likely is just the start for increased cyber-related enforcement actions.
On March 2, Deputy Assistant Attorney General Richard Powers laid out a significant and aggressive criminal enforcement agenda for the Antitrust Division of the Department of Justice. While speaking at the the ABA National Institute on White Collar Crime in San Francisco, CA, Powers began his remarks by noting that the Division’s Criminal Section currently had 18 indicted cases against 10 companies and 42 individuals, including 8 CEOs or Presidents. DAAG Powers also noted that the Section had 146 open grand jury investigations – more than at any time in the last thirty years and “expect[ed] to stay busy this year and beyond.”
Continue Reading Executives Beware: DOJ Antitrust Division is Taking a Hard Look at a Wide Spectrum of Potential Criminal Violations
On Wednesday, October 6, 2021, the Department of Justice (“DOJ”) announced a new Civil Cyber-Fraud Initiative to enforce cybersecurity standards and reporting requirements. The Initiative will use DOJ’s civil enforcement mechanisms, namely the False Claims Act, to pursue government contractors and federal grant recipients that “knowingly provid[e] deficient cybersecurity products or services, knowingly misrepresent their cybersecurity practices or protocols, or knowingly violat[e] obligations to monitor and report cybersecurity incidents and breaches.” DOJ will not limit enforcement to entities; individuals also can be held accountable for cybersecurity-related fraud. Under the False Claims Act, penalties for such violations could be substantial, including treble damages.
Continue Reading DOJ Announces Civil Cyber-Fraud Initiative To Enforce Contractor Cybersecurity Compliance