New Enforcement Plan Announced by DOJ
As we have previously covered, from the outset of the new Trump Administration’s Department of Justice (“DOJ”), it had announced sweeping changes to who and what it would prioritize for criminal prosecutions and what methods they would use to effectuate these goals. In keeping with these changes, the Head of the Criminal Division, Matthew R. Galeotti recently announced a new policy shift in how the DOJ would enforce the law in a speech at the Securities Industry and Financial Market’s Association’s annual Anti-Money Laundering & Financial Crimes Conference. The Enforcement Plan, formally labeled “Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime” in the accompanying memorandum, seeks to focus the Department’s investigations and efforts on the Administration’s larger “America First” priorities in the realm of white-collar crime enforcement, including crimes that exploit federal programs such as health care fraud, tariff evasion, complex money laundering by foreign organizations, and overall “threats to the U.S. economy, American competitiveness, and our national security” among others. Seeking to make sure, “The Criminal Division is laser-focused on the most urgent threats to our country, our citizens, and our economy,” Galeotti listed specific areas of enforcement that the new plan would prioritize, including, “Fraud perpetrated against Americans as individuals, as taxpayers, and as recipients of government services are core to this focus…dishonest actors seek to take advantage of our government and enrich themselves through waste, fraud, and abuse. Those that defraud Medicare, our defense infrastructure, and other public benefit programs and government agencies…Criminals also seek to exploit our financial system…[such as] dangerous cartels, hostile nation states, and terrorists seek to exploit that system to further their heinous crimes and threaten our economy and our national security.” Although this does not mean it will be abandoning its traditional areas of focus for white-collar crime enforcement, it does reflect a shift in priorities and likely resources.
“Fairness” and “Efficiency” Stressed for Self-Reporting for Companies
The plan also announced streamlined enforcement actions for U.S. companies that self-report any potential criminal conduct within their organization, with meaningful changes that seek to make it simpler for companies and whistleblowers to come forward and work with the DOJ in a way that seeks to lessen the burdens imposed on any such company. Emphasizing the benefits for companies that self-report, Galeotti said that, “Companies that are ready to take responsibility should not be overburdened by enforcement. The revised policies are aimed at incentivizing you to come forward, come clean, reform, and cooperate with the government in efficient investigations and prosecutions of the most culpable actors.” The new policy prioritizes cost-effective and efficient solutions, with revisions to the Fraud Section and the Money Laundering and Asset Recovery Section Criminal Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy (“CEP”) which, according to Galeotti, “had gotten unwieldy and hard to navigate.” Due to this complexity, it is believed that companies were reluctant to self-report because it could lead to, “burdensome, years-long investigations that inevitably end in a resolution process in which the company feels it must accept the fate the Department has ultimately decided.” By freeing up the DOJ’s resources for self-reporting violations, the new policy hopes to focus its resources on the more egregious abusers rather than a company willing to work with the DOJ through self-reporting. To be clear, companies still need to meet the requirements of CEP including, and per the policy those that “voluntarily self-disclose to the Criminal Division, fully cooperate, timely and appropriately remediate, and have no aggravating circumstances—will not be required to enter into a criminal resolution.” A meaningful change in the new policy is that it will take the guess work out of self-reporting for some companies, such as guaranteeing a declination of charges for those who qualify, allowing companies to voluntarily disclose in good-faith even if, unbeknownst to them, that the DOJ was already aware of the conduct (a previous potential disqualifier) and reducing the use of monitors for companies in non-prosecution agreements when feasible. The hope is that the streamlined process will have more companies come forward and help the economy over the long term.
