New Initiative Emphasizes Fraud as Priority for Administration
Earlier this month, the Department of Justice’s (“DOJ”) new National Fraud Enforcement Division issued Directive 26-12, “Corporate Enforcement in the Fight Against Fraud.” The five-page memorandum, signed by Assistant Attorney General Colin M. McDonald, outlines how the department and prosecutors around the country should choose corporate targets, what facts and circumstances will push an investigation toward criminal charges, and how these changes should result in a record number of cases in the near future. Although it is technically addressed to DOJ prosecutors, business owners and those in industries targeted by the policy explicitly mentioned, namely “health care, government, tax, and trade fraud” should take note.
In the memorandum accompanying the new policy, it lists multiple factors which prosecutors, “must place great weight” when deciding whether or not to bring charges after an investigation and what agreements should be put in place for any plea or negotiation with a company and/or its executives and employees. These include how much was known of the purported scheme, if efforts to conceal the fraud were taken, how long the scheme existed, did it lead to large loss amounts/impose financial hardship on an aggrieved party, and the nationality/immigration status of the perpetrators, amongst others. None of these factors are necessarily dispositive on their own, and any parties who think they may be in trouble should consult with their own attorneys who can look at the initiative and understand what areas could cause the most trouble under this new published policy. Critically, given the stress that the purpose of this corporate enforcement “furthers individual prosecutions,” there may be instances when an individual and their employer have divergent interests in working with prosecutors once an illegal scheme has been discovered, meaning its important for any employee to retain their own counsel who can ensure their needs are being accounted for and not in conflict with the corporations. The directive reports that the Fraud Division, through its National Fraud Detection Center and partner agencies, is using data analytics to proactively generate leads and open new individual and corporate investigations “at a rapid pace.” Given this Administration’s public positions, it is likely they will almost certainly be relying on artificial intelligence to play a role in uncovering fraud across the country, though it also stresses that it wants the investigations to incentive whistleblowers, including those who “participated in the criminal conduct” to come forward and work with the federal government. If you, your business, or someone you know is under investigation or has recently uncovered some aspect of a fraud, you should first consult with your own federal criminal defense attorney who can help guide you through the complexities of a federal fraud investigation and most importantly preserve your freedom.
