On October 4, 2023, Deputy Attorney General Lisa O. Monaco, the second-ranking official in the US Department of Justice (“DOJ” or the “Department”), announced a new Safe Harbor Policy for Voluntary Self-Disclosures (“VSDs”) made in connection with mergers and acquisitions (“M&A”) (together, “M&A Safe Harbor Policy”).  The new policy encourages acquiring companies to timely disclose misconduct uncovered during M&A due diligence and harmonizes the DOJ-wide approach to VSDs for M&A transactions.  The implementation of the M&A Safe Harbor Policy is the most recent initiative in the Biden Administration’s efforts to combat corporate crime and has broad implications across DOJ’s Divisions.Continue Reading DOJ Announces “Safe Harbor” Policy for Mergers & Acquisitions

In this blog post, we provide an overview of the updates to the Criminal Division’s Corporate Enforcement Policy (CEP) and discuss the impact of these changes on the corporate enforcement policies for criminal violations of sanctions and export controls, criminal violations of antitrust laws, and civil violations of the False Claim Act.

On January 17, 2023, Assistant Attorney General Kenneth A. Polite, Jr. announced changes to the Department of Justice’s (“DOJ”) Corporate Enforcement Policy (“CEP”), including applying the most recent FCPA Corporate Enforcement Policy to all corporate criminal cases handled by the DOJ’s Criminal Division. The FCPA Corporate Enforcement Policy, codified in § 9-47.120 of the Justice Manual, provides that if a company voluntarily self-discloses, fully cooperates, and timely and appropriately remediates, there is a presumption of declination absent certain “aggravating circumstances involving the seriousness of the offense or the nature of the offender.” The clear goal of this and other recent pronouncements from senior DOJ leadership is to tip the scales in favor of early disclosure by setting forth concrete incentives for corporations that discover potential criminal violations. 

Importantly, the CEP now explicitly states that a company presenting “aggravating circumstances,”1 while not eligible for a presumption of declination, may still obtain a declination if (1) the company had an effective compliance program and system of internal accounting controls at the time of the alleged misconduct, (2) the voluntary self-disclosure was made “immediately” upon the company becoming aware of the allegation of misconduct, and (3) the company provided “extraordinary cooperation” to DOJ investigators. For companies that do not receive a declination but do receive credit, the CEP also increases the available discounts from fines under the U.S. Sentencing Guidelines (“USSG”), both for companies that voluntarily self-disclose and those that do not.

Although the updated CEP heavily emphasizes the benefits of voluntary self-disclosure and cooperation, its implications for companies will largely depend upon the Criminal Division’s application of the policy, including through DOJ prosecutors’ interpretation of important, undefined terms such as “immediate” disclosure and “extraordinary” cooperation.

Moreover, although the CEP applies to the entire Criminal Division, it could potentially have ripple effects on the corporate enforcement policies in place in other DOJ components. For example, the CEP does not revoke or alter the DOJ National Security Division’s (“NSD”) Export Control and Sanctions Enforcement Policy for Business Organizations (the “Export Control and Sanctions Enforcement Policy”). That NSD policy is generally consistent with the CEP, but it does not spell out affirmatively, as the new Criminal Division policy does, the circumstances that a company must demonstrate to be considered for a non-prosecution agreement (“NPA”) rather than a criminal resolution in the face of aggravating factors. Similarly, the Antitrust Division and Civil Division have their own corporate enforcement policies in place, each of which has aspects uniquely tailored to those respective regimes. It therefore remains to be seen whether these other Divisions within DOJ will adjust their corporate enforcement policies to align more precisely with the CEP.  Continue Reading DOJ’s New Corporate Enforcement Policy for the Criminal Division and its Impact on Cases handled by other Divisions

The Department of Justice (DOJ) “KleptoCapture” Task Force (the “Task Force”), launched shortly after Russia’s invasion of Ukraine earlier this year, is characterized by DOJ as a key part of the current Administration’s broader anti-corruption initiative. The role of the Task Force is to support the enforcement of sanctions and export control restrictions imposed against Russia in response to the conflict. Earlier this month, Andrew Adams, the Task Force’s director, discussed its work to date, expected future developments, and implications for private sector companies.[1] Highlights of his remarks are summarized below, along with our comments on key points addressed.Continue Reading Department of Justice KleptoCapture Task Force – Director Andrew Adams Shares Observations on Current Efforts and Expected Developments

In late December, the United States Court of Appeals for the Second Circuit affirmed the conviction of Chi Ping Patrick Ho on seven counts alleging multiple FCPA and money laundering (and related conspiracy) violations.[1] The decision is notable for its construction of various FCPA provisions, and further demonstrates the expansive jurisdictional reach of anti-money laundering laws to dollar-denominated transfers.

Ho, a citizen of Hong Kong, served as an officer and director of the Hong Kong-based non-governmental organization China Energy Fund Committee (CEFC-NGO), which was funded by Shanghai-based energy conglomerate China CEFC Energy Company Limited (CEFC).[2] Ho also served as an officer and director of a CEFC-affiliated US non-profit (US NGO), funded by CEFC NGO.[3]

Ho’s conviction, for which he was sentenced to 36 months imprisonment and a US$400,000 fine,[4] stemmed from two alleged bribery schemes involving (1) an attempted US$2 million cash delivery to the President of Chad (which was purportedly rejected by the President) and (2) a US$500,000 wire transfer to a charity associated with the foreign minister of Uganda.[5] Notably, the US dollar-denominated wire originated from a bank in Hong Kong, which was transmitted through its operating unit in the United States as a correspondent to another bank in New York, which in turn was acting as a correspondent for a beneficiary bank in Uganda for final credit to an ultimate beneficiary NGO. Both acts were allegedly made for the benefit of CEFC’s commercial interests in Africa.[6]

On appeal, Ho challenged his 2018 conviction on a number of grounds.[7]Continue Reading United States v. Ho

(This is a cross-post from Steptoe’s new Investigations and Enforcement Blog.)

In May 2020, the U.K. Financial Conduct Authority, the authority charged with regulating financial firms and maintaining the integrity of the financial markets in the United Kingdom, reported that whistleblowing reports to the Financial Conduct Authority on workplace culture issues in 2019 had

(This is a cross-post from Steptoe’s new Investigations and Enforcement Blog.)

Federal prosecutors recently brought new indictments against U.S. academics in two separate cases involving alleged unreported ties to China. The Department of Justice moved forward its cases against the Harvard and University of Arkansas-affiliated professors as part of a broader push to combat

On June 1, 2020, the US Department of Justice (DOJ) Criminal Division, with little fanfare, issued updated guidance on the Evaluation of Corporate Compliance Programs (2020 Guidance). The document, which was released without any accompanying public announcement or explanation, updates an April 30, 2019 version of the document (2019 Guidance), as discussed in our May 9, 2019 Advisory. The 2019 Guidance updated original guidance published by the Division’s Fraud Section on February 8, 2017 (2017 Guidance), as discussed in our 2017 FCPA Mid-Year Review.

The DOJ’s evaluation of the effectiveness of a company’s compliance program continues to be a relevant factor to charging decisions under the Principles of Federal Prosecution of Business Organizations in the Justice Manual, as well as to an organization’s eligibility to receive a reduction in criminal fines calculated under the US Sentencing Guidelines (USSG); it is also important to the DOJ’s assessment of whether a monitor is warranted.Continue Reading Client Advisory: DOJ Updates Corporate Compliance Program Guidance, Emphasizes Role of Data

The Department of Justice (DOJ) recently announced the formation of the Procurement Collusion Strike Force, which will focus on one of the DOJ’s top priorities: protecting public funds from bid rigging and fraud. As DOJ’s Deputy Assistant Attorney General for Criminal Enforcement stated in a speech just before the announcement, it is DOJ’s view that