Remarks as Prepared for Delivery
Thank you—Joe and Bruce—for the very kind invitation to be here today.
It’s wonderful to speak with you here this morning. And I’m sorry we can’t do this in person.
But I’m still delighted to have the opportunity to be here to say a few words about white-collar criminal enforcement, albeit virtually.
I’m appearing here today in my capacity as Acting Deputy Assistant Attorney General in the Department’s Criminal Division.
My responsibilities include helping to oversee the Criminal Division’s Fraud Section.
For over a decade, I’ve had the honor and privilege of working alongside my close friends and colleagues in the Fraud Section.
It’s a place I love, it has an incredibly important mission, and I’m proud to report that the Section continues to produce results in ways the American people should be tremendously proud of.
We’ve had an incredibly busy year, notwithstanding the obvious difficulties associated with the pandemic.
We’ve continued to bring impactful white-collar cases all across the country, both against offending individuals and corporate entities.
I thought I’d start off today by reflecting on our body work this year. I do so for three reasons.
First, because it’s important that the Division is held accountable by the public for its work—both good and bad.
Second, because we’ve had an extraordinarily productive year.
And I’ll never pass up the opportunity to highlight the work of the tremendously talented and hard-working women and men of the Fraud Section.
And finally, because in looking back over our work this year, two themes emerge that I want to emphasize—cooperation and coordination.
And it’s these two themes that I’d like to offer a few words on today.
So, first, our year in review.
While the year is not yet over and more is certainly left to be done, the work of the Fraud Section to date has been remarkable.
This year, again, has seen the Fraud Section help set the pace for federal white-collar criminal enforcement in the United States, judged by any measure—whether by number of cases charged, size of cases charged, significance of cases resolved, or any number of other metrics.
In a year where many have lamented a perceived downturn in white-collar enforcement, we at the Fraud Section have seen no such downturn; in fact, just the opposite.
Production continues to be high and our results speak to that, notwithstanding the limitations we all have faced by virtue of the pandemic.
So, let’s turn to the numbers.
From January 1 of this year to this past Monday, the Fraud Section has publicly:
- Charged 303 individuals with various federal crimes;
- Convicted 198 individuals of various federal crimes; and
- Reached criminal resolution with 13 different corporations for various violations of federal criminal law.
With respect to these 13 corporate criminal resolutions, they include:
- Over $8.9 billion in global monetary amounts—an all-time high-water mark for the Fraud Section;
- Over $4.4 billion in U.S. monetary amounts;
- Nearly $3 billion in U.S. criminal amounts; and
- Criminal charges against well over 20 individuals for their roles in the underlying schemes upon which corporate criminal liability is based.
These corporate cases have been brought across a range of industries, from aircraft manufacturing, to financial services, to the pharmaceutical industry.
They have involved conduct in countries around the world, from Brazil, to Venezuela, to the United Kingdom, to France, to Singapore and Malaysia, and of course right here in the United States.
The Fraud Section’s individual and corporate cases, taken together, address conduct that has profoundly devastating consequences at home in the United States and, indeed, around the globe.
Conduct ranging from international corruption to prescription opioid abuse; from widespread market manipulation to health care fraud; from investment swindles to government procurement fraud; and everything else in between.
Our prosecutions this year have brought accountability to the highest ranks of company management.
They’ve involved some of the biggest and most well-known corporate entities in the world.
Which matters, because this type of accountability reminds companies and individuals that no person, and no company, is above the rule of law.
The Fraud Section has been busy at work protecting the public, and our actions this year speak more loudly than any words I can offer to you here today.
This year also saw the Fraud Section utilize data in innovative and creative ways to identify, detect and, where appropriate, charge federal crimes.
We have embraced, wholesale, the proposition that data can and does serve as a significant indicator of fraud, foreign bribery, and other white-collar offenses.
We have invested in data analysis and used data to initiate many of our criminal investigations—often covertly—to obtain evidence while the underlying offense is still being committed and without the criminal offenders’ knowledge of our investigation.
Our efforts using data to identify criminal conduct have yielded considerable cases and results.
Expect the Fraud Section to do more on this front in the coming months and years.
Under the creative and dynamic leadership of Fraud Section management, I have every expectation that the Section will find new and smarter ways to identify, detect, investigate, and prosecute significant white-collar criminal offenses based on leads generated through data analysis.
This year also saw the Fraud Section stand up a first-of-its kind Unit—the Special Matters Unit.
This Unit was established to focus on issues related to privilege and legal ethics.
It conducts privilege reviews on behalf of the Section to ensure that prosecutors on the case team are not exposed to potentially privileged material.
The Unit litigates privilege-related issues in connection with the Fraud Section’s cases in federal court.
These efforts, among many other things, include handling evidentiary hearings related to privilege issues and litigating matters related to the crime-fraud exception to the attorney-client privilege.
The Unit also provides training and guidance to Fraud Section prosecutors on matters relating to privilege and evidence handling.
The Special Matters Unit was formally established this year to, on the one hand, help safeguard the rights of those under investigation; and on the other, to help ensure the Section’s investigations and prosecutions are not jeopardized by reviewing errors.
Going forward, expect this Unit to be a leader in the Department’s efforts to properly handle matters relating to the attorney-client privilege.
This year also saw a spate of individual criminal charges brought by Fraud Section prosecutors against health care defendants.
On September 30 of this year, and in connection with our annual healthcare fraud takedown, the Fraud Section secured charges against 140 defendants in cases involving over $2.9 billion in charged losses.
The conduct alleged included false billings, forged documents, the payment of bribes and kickbacks, and the unlawful distribution of prescription opioids, among others.
We estimate that our efforts to combat healthcare fraud across the United States have saved billions for the federal fisc.
And we also are confident that our criminal enforcement efforts directly contribute to the provision of better healthcare to Americans across the country.
Expect our efforts in this respect to continue, at pace, for the foreseeable future.
Finally, this year saw the Fraud Section stand up, in what must be record time, a criminal enforcement program to investigate and prosecute fraud in connection with the Paycheck Protection Program, or PPP—that is, the program established by Congress under the CARES Act to provide relief monies to small businesses and their employees during a period of national emergency.
We did this because, when the CARES Act was passed we, at the Fraud Section, hoped for the best, but knew we had to prepare for, and protect against, the worst.
We hoped individuals and related businesses would submit honest applications for money that they deserved.
But we had to prepare for, and protect against, those who would take advantage of this program by submitting false declarations and dummy documents to justify their receipt of PPP monies.
Our preparation was not in vain.
Within weeks of the first wave of PPP monies being distributed, we charged our first case.
Since that time and to date, the Section has secured charges against over 90 individuals in cases involving alleged losses totaling over $250 million.
We are proud of our efforts to safeguard this important government program and will continue to investigate and prosecute these cases moving forward.
With that background, I’d also like to talk about two key points that are reflected in the Section’s work, particularly with respect to our corporate criminal enforcement efforts.
They are the value of cooperation and the importance of coordination.
First, let me touch on the value of cooperation.
Department policy is clear.
Under the Principles of Federal Prosecution of Business Organizations, a company may receive cooperation credit if the company “identif[ies] all individuals substantially involved in or responsible for the misconduct at issue, regardless of their position, status or seniority, and provide[s] to the Department all relevant facts relating to that misconduct.”
And under the Department’s FCPA Corporate Enforcement Policy—which the Division applies to all corporate matters within the Fraud Section—a company is entitled to a significant percentage reduction off the low-end of the otherwise appropriate advisory Sentencing Guidelines range, so long as the company satisfies certain criteria set forth in the policy.
Taken together, these policies (1) establish what cooperation is, (2) provide a baseline and threshold to obtain cooperation credit, (3) provide specific guidance regarding how to go about obtaining cooperation credit, and (4) go so far as to articulate specific reductions based on the quality of a company’s cooperation.
We, at the Fraud Section, have been consistent in our application of these principles and policies in our work.
And we are public and transparent in how we apply these principles and policies to our resolutions.
You have seen this in our cases this year.
In the Section’s corporate resolution papers this year, you saw companies of widely different types, in widely different industries, receive significant cooperation credit under Department policy.
Specifically, you saw:
- Airbus received a 25 percent reduction off the low end of the Guidelines range for its full cooperation in an FCPA case;
- Herbalife received a 25 percent reduction off the low end of the Guidelines range for its full cooperation in an FCPA case;
- Novartis and Alcon received 25 percent reductions for their full cooperation in their FCPA cases;
- Sargeant Marine received a 25 percent reduction off the low end of the Guidelines range for its full cooperation in an FCPA case;
- And Vitol received a 25 percent reduction off the low end of the Guidelines range for its full cooperation in an FCPA case.
When companies cooperate with the Fraud Section in connection with its investigations and prosecutions, there are benefits.
For one, if criminal liability is established, cooperation may affect the ultimate form of resolution—be it plea agreement, deferred prosecution agreement, or non-prosecution agreement.
Second, cooperation certainly will affect how much a company is required to pay, or not pay, assuming criminal liability has been established.
Cooperation reductions can be, and often are, significant—routinely totaling tens of millions of dollars.
So, cooperation matters.
And the Fraud Section faithfully applies Department policies on cooperation, crediting it when it happens and taking note when it does not.
The second point I want to highlight is the importance of coordination, both to the Department and to those we investigate.
Under the Department’s “Anti-Piling On” policy, prosecutors “should  endeavor, as appropriate, to coordinate with . . . other federal, state, local, or foreign enforcement authorities that are seeking to resolve a case with a company for the same misconduct.”
And at the Fraud Section, we have been clear and consistent in our application of this Department policy.
This year, we applied the “Anti-Piling On” policy to many of our corporate criminal resolutions.
These resolutions included cases involving multiple U.S. enforcement authorities and cases involving U.S. and foreign enforcement authorities.
In these coordinated resolutions, we credited certain amounts paid to other authorities.
In performing our crediting analysis, we carefully considered the equities of the authorities involved as well as the respective national interests of the authorities involved.
And we did so because the offending corporation, in every instance, made a good faith, bona fide effort to coordinate and assist the relevant authorities in achieving a global resolution.
Which brings me to a key point—the difference between what the “Anti-Piling On” policy is, and what it is not.
In our view, the policy is an attempt by the Department to ensure an appropriate and fair outcome for an offending company.
This is achieved, through the policy, by advising Department attorneys to coordinate, as appropriate, with different federal, state, local, or foreign enforcement authorities before resolution to achieve an overall equitable result for the company that avoids unnecessary and unwarranted duplication.
In our view, the policy is not something to be used offensively or tactically by corporations or counsel.
What I mean by that is that the policy is not intended to be exploited by companies to strategically resolve with other enforcement authorities first, often on an incomplete record and with no acceptance of responsibility or admission of liability.
Only later to be used against the Department in subsequent criminal resolution discussions in support of an argument that any further criminal enforcement action by the Department should be precluded or mitigated because of the prior uncoordinated resolution.
Unfortunately, on occasion we see just that: attempts to use this policy—one that is meant to protect companies from unfairly duplicative penalties—against the Department.
Let me also underline one aspect of this policy that may seem obvious but bears special emphasis—coordination requires effort from all sides.
From the Department, from its enforcement authority counterparts and, of course, from the offending company.
And to achieve meaningful coordination—indeed, to enable coordination to occur at all—companies must attempt to coordinate with the Department.
If a company wants Section prosecutors to give any weight to a request that they should credit some, or all, of a preceding resolution with another enforcement authority, that coordination, or attempts to coordinate, must occur well before any agreement is reached with another enforcement authority.
From our perspective, this is how the policy operates, in both theory and practice.
And I hope these remarks offer some helpful clarity on the Fraud Section’s application of this important Department policy.
Before I wrap up, I want to return to something I touched on earlier.
That’s the outstanding work of the women and men of the Fraud Section.
It’s been the honor and privilege of my professional life to work in the Fraud Section.
The men and women of the Fraud Section are unrivaled in their talent, dedication, and vision, especially when it comes to white-collar criminal enforcement.
And of course, their work, and the results they have delivered this year, are all the more remarkable when you consider they have been achieved amid this National Emergency.
Which has forced us, like all of you, to completely rethink and redesign how we do our jobs.
Nearly everything we do has been impacted by current restrictions.
Travel. Face-to-face interviews. Court proceedings. Grand jury appearances. Trials.
We’ve had to find new, different, and creative ways to accomplish our mission.
But as you can see from the work and figures I mentioned earlier, we have not slowed down.
If anything, we have ramped up and done more.
The American people rightly expect much of the Department of Justice, and we in the Criminal Division’s Fraud Section will continue to work each and every day to deliver for them.
Thank you again for the opportunity to speak with you this morning, and I wish you well with the remainder of your program today.