Remarks of Acting Assistant Attorney General Brian C. Rabbitt at the ACI 37th Annual Conference on the FCPA
Remarks as Prepared for Delivery
Good morning and thank you for that kind introduction. It is an honor to be here with you today, even if only virtually. Just a year ago, addressing a conference of this size and importance via video would have seemed unthinkable. Today, it is — unfortunately — normal. I look forward to the time — hopefully, soon — when we can gather again in person. In the meantime, I am grateful for this opportunity to speak with you, and I look forward to my discussion with Kim after my remarks conclude.
It is hard to believe, but I have now led the Criminal Division for almost half a year. When I took the helm in July from my predecessor, Brian Benczkowski, my goal was to ensure stability and continuity so that the talented men and women of the Division could continue their important work unimpeded. With a once-in-a-lifetime pandemic raging, that was no small task.
But it was a critical one. And I firmly believe that, by any measure, we in the Criminal Division have been successful. Despite significant challenges, we have pressed forward over the past year and have enforced the federal criminal laws fairly, transparently, and independently. This is true not only with respect to the Division’s white-collar enforcement work — which I will focus on today — but also in other notable areas, such as violent crime, opioids, and election integrity. I am proud of all that the Division and its various sections have achieved over the past year, and I look forward to that work seamlessly continuing after I depart in January.
With our time today, I would like to focus more closely on the Division’s accomplishments over the past year in terms of white-collar enforcement and the FCPA in particular. It is a body of work that would be significant in any year, but that is all the more impressive given the significant challenges we overcame in 2020.
It is no exaggeration to say that the Criminal Division’s work in 2020 has been historic — both in terms of the results we have achieved and the circumstances under which we have achieved them. Despite the significant obstacles presented by the pandemic, the Division has remained open for business. Indeed, in many respects, our enforcement numbers are at an all-time high. Of course, as I have said before, when it comes to a white-collar enforcement program, statistics can only tell you so much. Numbers frequently vary from year to year based on factors that are often outside of our control, and they do not fully reflect the nature and quality of our cases. But even with those caveats, the Criminal Division’s statistics over the past year demonstrate that our white-collar enforcement work — and our enforcement of the FCPA in particular — has been active and successful in 2020, even in the face of significant headwinds.
Turning first to our corporate enforcement work, as of November of this year, the Criminal Division’s Fraud Section had concluded resolutions with a dozen corporations. While the Section resolved 15 corporate matters in 2019, this year is not yet over, and I expect at least several more significant corporate resolutions by year’s end — including one FCPA matter that we expect to announce later today. Moreover, the Fraud Section’s resolutions so far this year have been significant in size, totaling approximately $8.75 billion in global monetary amounts paid by companies, a significant increase from $3.21 billion in 2019 and one of the highest amounts ever achieved in a single year. Notably, many of our corporate resolutions in 2020 included coordination with one or more foreign enforcement authorities — an increasingly important aspect of our work. Nevertheless, of the nearly $9 billion companies paid to resolve matters involving the Fraud Section in 2020, almost half — $4.28 billion — was paid directly in penalties and restitution in the United States, which demonstrates our leading role in global white-collar enforcement. This represents a marked increase from last year, when the comparable figure was approximately $2.96 billion.
In addition to the Fraud Section, the Division’s Money Laundering and Asset Recovery Section (MLARS) has also had a productive year. In 2020, MLARS resolved two significant corporate criminal matters — the same number as in 2019. Notably, however, the criminal matters MLARS resolved this year amounted to over $2.3 billion in amounts paid to the U.S. — more than double the approximately $1 billion in amounts paid in connection with MLARS’ 2019 resolutions.
And of course, in addition to corporate resolutions, MLARS continued its important work in other areas in 2020, identifying and forfeiting hundreds of millions of dollars in assets traceable to illicit activity. For example, in connection with the Goldman Sachs 1MDB FCPA matter that I will return to shortly, MLARS has identified and forfeited over $1.1 billion in assets. Of that, the Department has already returned, or assisted Malaysia in recovering, more than $600 million — and we are hopeful that hundreds of millions of dollars more will be returned in the near future.
The Criminal Division has been particularly active in 2020 when it comes to enforcing the FCPA. Of the dozen corporate resolutions the Fraud Section has entered into so far in 2020, seven — and, after today, eight — have been FCPA matters — an amount on par with the seven FCPA matters we brought last year. Like our other corporate resolutions, the Criminal Division’s FCPA resolutions in 2020 have been impressive in size and scope, involving approximately $7.76 billion in amounts paid worldwide—a significant increase from the approximately $2.83 billion paid in 2019. Of that amount, approximately $3.21 billion was paid to U.S. authorities, up slightly from 2019. Our FCPA resolutions this year have also involved almost $2.25 billion in U.S. criminal monetary penalties, another increase from 2019, when the comparable figure was $1.62 billion.
Ensuring individual accountability for corporate wrongdoing has been a hallmark of our white-collar work in recent years, and 2020 was no exception. This past year saw the Fraud Section publicly charge almost 300 individuals, including over 20 individuals charged in connection with corporate matters resolved during the year. Some of our most-significant FCPA resolutions — such as Goldman Sachs, Herbalife, and Sargeant Marine — also included individual charges. In fact, in 2020 the Fraud Section publicly charged 29 individuals in connection with FCPA matters — the third-highest number ever recorded in a calendar year, behind only the 34 individuals publicly charged in 2019 and the 31 individuals charged publicly in 2018.
Beyond numbers, what really stands out about our FCPA enforcement efforts in 2020 is the nature, quality, and scope of the cases we have resolved. Indeed, 2020 was bookended by two of the most significant FCPA matters in the Department’s history — the Airbus resolution in January and the Goldman Sachs 1MDB matter that we resolved in October.
The Airbus matter addressed an egregious, long-running scheme that involved hundreds of millions of dollars in bribes and profits, as well as conduct that spanned China, Malaysia, Sri Lanka, Taiwan, Indonesia and Ghana. The resolution included coordination with our partners in the U.K. and France and was, at the time it was announced, the largest global foreign bribery matter ever brought by the Department of Justice.
The Department’s recent Goldman Sachs 1MDB resolution was an equally important milestone in our FCPA enforcement efforts. In connection with the resolution, the Malaysian arm of Goldman Sachs pleaded guilty to criminal FCPA charges. The bank also agreed to pay over $2.9 billion and admit wrongdoing in connection with its role in a massive scheme that saw billions of dollars looted from the 1MDB fund and approximately $1.6 billion in bribes paid to corrupt foreign officials. The case was record-setting in several respects. In terms of FCPA cases, it involved: the largest-ever bribe amount paid; the largest-ever loss charged; one of the largest-ever profit amounts realized; the largest-ever monetary penalty paid to the United States; and coordination with the largest-ever number of foreign authorities.
Any year that included landmark resolutions such as Airbus and Goldman Sachs would be a banner year for the Department’s FCPA enforcement program. But the Criminal Division also resolved a number of other significant FCPA matters in 2020. Taken together, these cases demonstrate our enduring commitment to combatting corruption around the world and the broad-ranging scope of our efforts — a commitment recently recognized by the OECD, which in a November 2020 report lauded our “strong enforcement of the . . . FCPA,” noted our “prominent role in the fight against transnational corruption,” and observed that U.S. FCPA enforcement “has increased remarkably” in recent years.
Indeed, our FCPA cases in 2020 spanned industries, covering everything from the Goldman Sachs and Airbus matters — which involved the financial services and aerospace industries, respectively — into the energy, construction, consumer products, agriculture, and healthcare industries. Our cases were also geographically diverse. Our FCPA enforcement efforts have, in recent years, focused on regions such as South America — and that remained true in 2020. But our cases this year spanned the globe, touching the U.S., Europe, Africa, the Middle East, and Asia as well.
I’d like to conclude by making two high-level observations about the Criminal Division’s work thus far in 2020.
First, our results demonstrate that our white-collar enforcement efforts have remained quite active in 2020, despite the significant challenges presented by a once-in-a-generation global pandemic that has had profound effects on everything we do. Despite this, our corporate enforcement results — and our FCPA results in particular — have met or exceeded our work from last year — both in terms of numbers and the nature and quality of the cases we have brought. That would be a noteworthy achievement any year, but it is remarkable in 2020 given the challenges we have faced. And it is due in no small part to the hard work and dedication of the women and men of the Criminal Division.
Second, our results this year — and in prior years — should conclusively put to rest the canard that white-collar enforcement — and FCPA enforcement in particular — has been lackluster during this administration. Nothing could be further from the truth.
In the two years I have had the privilege of serving at the Justice Department, the Criminal Division’s Fraud Section has — so far — criminally resolved 27 white-collar corporate cases consisting of 9 corporate guilty pleas; 16 corporate deferred prosecution agreements; and 8 corporate non-prosecution agreements. These cases collectively involved over $14 billion in charged losses and resulted in nearly $12 billion in global payments and amounts, over $7 billion in U.S. payments and amounts, and over $4.5 billion in U.S. criminal payments and amounts. These results have been achieved in traditional areas, such as the FCPA, as well as new areas of focus, such as our initiative to combat the unlawful practice of “spoofing” in commodities markets.
Importantly, our focus on corporate enforcement has not come at the expense of our other white-collar enforcement work. During this same period, the Criminal Division has begun or continued several key initiatives intended to target widescale criminal conduct.
For example, earlier this year, at the outset of the pandemic, the Criminal Division launched an initiative to combat fraud against the Paycheck Protection Program. Our work has been enormously successful in protecting the U.S. fisc and ensuring the integrity of this critical program, resulting so far in 62 cases and charges against nearly 90 individual defendants involving over $130 million in actual losses.
At the same time, the Criminal Division has also maintained our focus on other areas, such as fighting opioid abuse and healthcare fraud. Earlier this fall, for example, we announced the largest-ever national healthcare fraud takedown, which involved charges against almost 350 individual defendants who collectively submitted more than $6 billion in false and fraudulent claims to health care programs.
Put simply, our work this year — and in prior years — demonstrates that white-collar enforcement has remained a top priority for the Criminal Division. This is true not only in terms of FCPA enforcement, but also in other key areas, where the Division has emerged as a clear leader within the Department in the white-collar enforcement space. And while the Division’s areas of focus may change in the coming years, I expect that corporate enforcement will continue to be a priority for the Division and the Department of Justice, no matter who is in charge.
Thank you very much for the opportunity to be here with you today. It has been the honor of a lifetime to serve at the Department of Justice and to lead the talented women and men of the Criminal Division. It has also been a privilege to join you today to speak about their important work. What the Division has achieved over the past year on behalf of the American people in the face of the pandemic has been truly remarkable, and I am proud to have played a very small part in it.
Updated December 3, 2020