When a legal team needs to find the facts behind fraud and corruption allegations in a government investigation, technology can drive substantial new efficiencies. By filtering and evaluating vast amounts of information, artificial intelligence can effectively sort text messages, audio files, emails and other unstructured data into manageable groups; identify potential relationships between parties accused of fraud or corruption; and recognise patterns of frequency or timing, which may support a client's defence.
Compliance officers often report to the legal department or are staffed with qualified lawyers, making it difficult to distinguish when the compliance officer is serving in a legal capacity, rather than a compliance one. However, drawing a clear distinction between these functions, conducting internal investigations under the direction of counsel and making the legal purpose of communications or documents clear will make the best possible record to show that documents should be protected by privilege.
With few Foreign Corrupt Practices Act (FCPA) corruption investigations resolved under the Trump administration's watch, it is too early to weigh up how the administration will affect enforcement or settlements in the long term. On its face, the new FCPA Corporate Enforcement Policy signals a more business-friendly approach by removing the spectre of a monitor in many situations and by committing to a presumption of a declination in certain circumstances.
Companies now have even greater incentives to have strong, meaningful Foreign Corrupt Practices Act compliance programmes. When the deputy attorney general recently announced the new enforcement policy that will guide the US Department of Justice, he made it clear that the government wants to create incentives for companies to police themselves when it comes to bribery and corruption.
Two recent cases before the Department of Justice (DOJ) have sent a signal that the DOJ may become more proactive in combating small-business contracting fraud. These cases underscore the importance of ensuring that small-business eligibility representations are accurate, as the penalties for misrepresentation can be severe.
For energy, mining and resources companies, the cost of corruption – and getting caught – is real. Energy and mining companies, along with other resources companies, remain a major focus of bribery and corruption investigations worldwide. The government wields a potent weapon against bribery and corruption in the form of the Foreign Corrupt Practices Act.
In the past, compliance and remediation in the context of healthcare investigations were typically seen as afterthoughts. However, compliance efforts are now being more closely scrutinised by prosecutors. The Department of Justice recently issued an 11-part series of questions styled as guidance on corporate compliance programmes. Interestingly, it is a series of questions, not a series of answers. Companies are going to have to work the answers out themselves with their compliance departments and counsel.
In recent years, US and Western European military spending has decreased as military spending in other parts of the world has risen. As a result, aerospace, defence and government services companies increasingly rely on sales to foreign governments to grow business revenue and are thus at a more significant risk of investigation for violations of the Foreign Corrupt Practices Act.
To undergo a Foreign Corrupt Practices Act investigation entails significant risk. Since 2008 at least 10 corporations have agreed to pay more than $300 million in penalties to resolve such investigations. Defence costs associated with a global bribery or corruption investigation can also run into the millions before any penalties are assessed. A number of developments that emerged during 2016 will have broad implications for the coming year.
As the Senate prepares to confirm Senator Jeff Sessions as the new attorney general and to consider nominations for other high-level positions in the Justice Department, there are many questions – and few answers – about how the new leadership in the Justice Department will approach the prosecution of white collar crime during the Trump administration.
The Department of Justice (DOJ) recently announced a landmark resolution concerning violations of the Foreign Corrupt Practices Act. The DOJ and the Securities and Exchange Commission entered into a $413 million settlement with one of the world's largest hedge funds. This settlement indicates that the DOJ intends to enforce the act strictly with little regard for the industry involved or the financial consequences.
Since January 2009, the government has recovered more than $30 billion through False Claims Act cases, more than half of which was recovered from cases involving alleged fraud against federal healthcare programmes. False Claims Act cases are now more complex, lucrative and healthcare focused than ever – a far cry from the act's humble beginnings as a solution to the problem of fraudulent sales to the military during the American Civil War.
To understand how the government will regulate companies in the future, it is important to understand the problems it is currently trying to solve. In its efforts to enforce the Foreign Corrupt Practices Act, the US Justice Department faces a particularly difficult problem: how to incentivise companies to volunteer information about their own illegal conduct while retaining its ability to punish those companies for breaking the law.
With the publication of the Yates Memorandum, the Department of Justice has reinforced its focus on seeking accountability from individuals. Employees may thus be at greater risk from corporate investigations, particularly with respect to their work emails and other documents, and company counsel may receive more requests from individual counsel regarding the production of employees' documents.
The Yates Memorandum announced a new US Department of Justice (DOJ) policy that focuses DOJ attorneys on pursuing the individuals responsible for corporate wrongdoing. In considering the practical effects of the new policy, a question arises about the potential for it to increase the pressure on companies to provide legally privileged information to the DOJ in hopes of receiving cooperation credit.
The Department of Justice's (DOJ) Yates Memorandum aims to hold individuals, not just corporations, accountable for corporate misconduct, in response to criticism that it fails to punish executives who precipitate wrongdoing. However, it remains to be seen whether the policy will advance the DOJ's law enforcement interests or hinder them, as there may be unintended consequences for companies, employees and the DOJ itself.
The US Department of Justice recently announced a formal policy that provides for the vigorous prosecution of culpable individuals who are responsible for corporate wrongdoing, which is consistent with shifting trends in prosecution. An increased effort to prosecute high-ranking executives would result in significant changes to how investigations affect companies and how companies respond to investigations.
The recent Supreme Court decision in Kellogg Brown clarifies that the Wartime Suspension of Limitations Act will not toll the statute of limitations for civil claims during times of war or the authorisation of military force. This reverses the trend that had permitted the use of the act in civil False Claims Act matters and protects defendants from indefinite tolling in civil matters.
There are many subtle ways in which a law-abiding citizen can commit a federal felony under US law in a matter of minutes. The pressures of life can put people in situations where they take morally questionable actions that are prohibited by federal criminal law leading to criminal penalties. The average citizen should thus realise how broad US criminal law can be and how it can be applied to him or her.
Although the government has added new players to its line-up, the game seems to be the same in the world of Foreign Corruption Practices Act enforcement, as the Department of Justice (DOJ) and the Securities and Exchange Commission continued to push for strong enforcement in 2014. As in 2013, the DOJ continued to emphasise the importance of corporate compliance and cooperation with investigators.