Assistant Attorney General Lanny Breuer today heralded what he called a "new era" in white-collar criminal enforcement at the Department of Justice, marked by increased resources, new investigative techniques and strong penalties for corporations and individuals.
The Obama administration is pumping money into fighting financial fraud, Breuer said in a speech at the annual Compliance Week conference in Washington. And DOJ is bolstering the Fraud Section by hiring additional prosecutors to tackle securities fraud and Foreign Corrupt Practices Act violations, among other areas.
“This is a very real and a very tangible commitment, and a very real and tangible focus,” Breuer said. (Click here for a copy of Breuer's prepared remarks.)
He touted the department’s aggressive focus on FCPA enforcement, noting the use of investigative techniques that are not common in fighting white-collar crime. With an undercover sting and wiretaps, DOJ built a massive FCPA case against 22 executives in the firearms and weapons industry.
“To my mind, the techniques that have been used historically to go after organized crime or blue-collar crime need to be used at times in white-collar crime because the American people expect no less,” Breuer said.
These techniques, however, remain untested in the FCPA realm. The prosecution of the 22 arms-industry executives is pending in the U.S. District Court for the District of Columbia. Several defense lawyers have raised questions about the department’s investigation.
Since 2004, DOJ has reaped fines of more than $1.5 billion in more than two dozen FCPA cases, Breuer said, and more than 80 individuals have been charged. Breuer said charging individuals is a deliberate enforcement strategy. “Holding individuals accountable, I think, is essential and critical and something that my Fraud Section knows that I expect,” he said.
Breuer also touted the department’s increased cooperation with the Securities and Exchange Commission, noting that the SEC is now using cooperation agreements and deferred prosecution agreements—staples of the Justice Department.
Acknowledging a concern in the white-collar defense bar, Breuer said how best to encourage voluntary disclosure of criminal conduct is a difficult question. “I was in the private practice for many years, and I grappled with these issues when representing clients,” Breuer said. “So I understand it’s a real question.”
Companies that come forward and cooperate with DOJ in these fraud and FCPA investigations will receive what Breuer called “meaningful credit.” DOJ, however, is not promising amnesty.
Breuer spotlighted the Siemens foreign corruption case in federal district court in Washington, calling it the “most egregious” example of systemic foreign corruption ever prosecuted by the Justice Department. Siemens cooperated with the department but did not, at the start, voluntarily disclose corrupt activities.
The guideline range of $1.35 billion to $2.7 billion in penalties, Breuer said, was taken off the table because of the company’s work with Justice. Siemens resolved the case with a $450 million fine to the Justice Department.
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