The Department of Justice has spent the second half of 2021 implementing policy changes and enforcement initiatives aimed at fostering a tougher approach towards white collar enforcement. More specifically, Deputy U.S. Attorney General Lisa Monaco laid out three initiatives to send a strong message that the DOJ is ready – now more than ever – to prosecute corporate crime to the fullest extent of the law.[1]

Corporate Enforcement

Monaco revealed her plan for tighter regulations concerning corporate cooperators, past malfeasance and tighter settlement conditions at the American Bar Association’s 2021 White Collar Crime National Institute Summit last October.[2]

First, Monaco noted it will no longer be sufficient for companies to limit disclosures on those they assess to be “substantially involved” in the misconduct. Such distinctions rely too heavily on self-policing rather than “proactive policing.” This raises concerns for attorneys that individuals will be tied down to certain investigations even though they are not meaningfully connected to the malfeasance at issue. However, there is a continued emphasis that low-level employees of corporations possess valuable information that could make or break an investigation.[3]

Second, the DOJ is taking a harder line on companies with a history of wrongdoing. Monaco emphasized all past conduct would be considered by prosecutors when deciding the resolution of a corporate case, even if that wrongdoing is unrelated to the matter at issue. This statement stems from the DOJ statistic that 10% to 20% of companies that had resolved a case with the DOJ had earlier cases resolved with the DOJ in the past. The extent to what percentage of previous misconduct will be considered in new investigations remains ambiguous and raises red flags for attorneys.[4]

Corruption

President Biden issued a memorandum in early June calling for new strategies to enforce U.S. anti-corruption laws internationally by cracking down on foreign tax havens and illicit financing. The plan calls for tighter enforcement on siloed agencies who don’t always share information or use their unique enforcement tools in concert with one another. When this occurs between companies, more sophisticated crimes occur, leaving more room for the flow of dirty money around the world.[5]

For much of the past year, the Justice Department’s Foreign Corrupt Practices Act unit has been caught up in pandemic-related travel restrictions that have limited global corruption probes. If our nation is to see the White House’s strategic objective succeed, the deployment of resources within relevant agencies, including the DOJ, and further financing are critical.[6]

Cybercrime

There is a continued push to combat cybercrime and ransomware attacks as the number of cases continue to rise into the new year. In fact, the US Treasury Department has tied $5.2 billion in BitCoin transactions to ransomware payments.[7]

Back in October, Monaco revealed a civil cyber-fraud initiative that will use the False Claims Act to penalize government contractors and grant recipients who knowingly provide deficient information security service, misrepresent their information security protocols or violate their duty to monitor and report breaches.[8]

Additionally, the creation of the National Cryptocurrency Enforcement Team is yet another measure to tackle complex investigations and prosecutions of criminal misuses of cryptocurrency and money laundering infrastructure actors.[9] The formation of this team builds on the government’s efforts to better track and claw back cryptocurrency ransom payments. One notable action by the DOJ was the seizure of 63.7 bitcoins valuated at $2.3 million which represented the proceeds of a May 8, 2021 ransom payment to individuals known as Darkside, who had targeted Colonial Pipeline, the largest pipeline system for refined oil products in the U.S.[10]

Acting U.S. Attorney for the Northern District of California, Stephanie Hinds, summed up Monaco’s goals succinctly by saying, “Cyber criminals are employing ever more elaborate schemes to convert technology into digital extortion…We need to continue improving the cyber resiliency of our critical infrastructure across the nation, including in the Northern District of California. We will also continue developing advanced methods to improve our ability to track and recover digital ransom payments.”[11]

Conclusion

With stronger guidance from the Department of Justice as well as President Biden, governmental agencies are ready to push through the remainder of pandemic-induced backlogs and move full-steam ahead into aggressively addressing corporate malfeasance, corruption, and cybercrime in the new year.


[1] Jack Queen, 3 White Collar Trends To Watch in 2022, LAW360 (Jan. 3, 2022, 12:03 PM) https://www.law360.com/securities/articles/1446910/3-white-collar-trends-to-watch-in-2022- (“White Collar Trends Article”).

[2] Stewart Bishop, Deputy AG Unveils New Tacks For White Collar Enforcement, LAW360 (Oct. 28, 2021, 5:23 PM) https://www.law360.com/articles/1435544/deputy-ag-unveils-new-tacks-for-white-collar-enforcement.

[3] White Collar Trends Article, supra.

[4] Id.

[5] Dorothy Atkins, Biden Unveils Plan To Track Down on Corruption, Tax Havens, LAW360 (June 3, 2021, 9:05 PM) https://www.law360.com/articles/1390680/biden-unveils-plan-to-crack-down-on-corruption-tax-havens.

[6] White Collar Trends Article, supra.

[7] Chuck Brooks, More Alarming Cybersecurity Stats for 2021!, Forbes (Oct. 24, 2021, 8:30 PM) https://www.forbes.com/sites/chuckbrooks/2021/10/24/more-alarming-cybersecurity-stats-for-2021-/?sh=4251d0a34a36.

[8] White Collar Trends Article, supra.

[9] DOJ Press Release, Deputy Attorney General Lisa O. Monaco Announces National Cryptocurrency Enforcement Team (Oct. 6, 2021), https://www.justice.gov/opa/pr/deputy-attorney-general-lisa-o-monaco-announces-national-cryptocurrency-enforcement-team (“National Crypto Enforcement Team Article”).

[10] DOJ Press Release, Department of Justice Seizes $2.3 Million in Cryptocurrency Paid to the Ransomware Extortionists Darkside (June 7, 2021) https://www.justice.gov/opa/pr/department-justice-seizes-23-million-cryptocurrency-paid-ransomware-extortionists-darkside.

[11] Id.