- Euro-criminals love bitcoin
- Speaking of love, Valentine’s Day idea for next year: pick her up in a rented helicopter and pretend you’re a general on a classified mission
- Meanwhile, after a real general was placed in confinement for 21 days, the Gitmo military judge on the USS Cole may now make the Secretary of Defense testify
- ICE made the news this week – a special agent was sentenced to 36 months in prison for accepting bribes from a fugitive drug lord
- And here in Seattle, ICE’s top lawyer was charged with stealing immigrants’ identities, coming on the heels of the Seattle ICE agent who pulled a gun on her supervisor after she was placed on a performance improvement plan
- Also here in Seattle, Amazon and the EPA reached a $1.2 million settlement over online sales of illegal pesticides
- Two former Greek prime ministers and eight other former ministers implicated in corruption investigation involving Novartis
- Russian hackers known as “Fancy Bear” apparently tricked government contract workers into exposing their email to theft
- Even in the midst of a market correction, an announcement that the DOJ has closed an investigation will send a stock up
- Rabobank’s California subsidiary pled guilty to conspiracy in an attempt to conceal anti-money laundering deficiencies from the Treasury Department
- Porn actor’s assertion that extortion really isn’t extortion fell flat at the Ninth Circuit
- Here in Washington, airlines have brought suit challenging the constitutionality of the new paid sick leave law as it applies to pilots
- That’s it for the week — it’s not easy being a thought leader . . .
- Miami businessman agrees to pay $81M for EB-5 visa program fraud
- The Commodity Futures Trading Commission (CFTC) apparently sent subpoenas to cryptocurrency platforms
- Meanwhile, the SEC obtained a court order halting an allegedly fraudulent initial coin offering
- Closer to home, the Ninth Circuit expanded the scope of activities subject to Clean Water Act permitting requirements
- Even closer to home, the U.S Attorney’s Office in Oregon filed a case alleging visa fraud and forced labor
- And our own Harold Malkin was published in Law360 regarding the new DOJ policy on dismissing False Claims Act cases
- Next week Harold will continue with his investigation into crimes against the bald …
You’re relieved. After a long investigation concerning some troubling conduct throughout the Pacific Northwest that may have led to the United States being defrauded by one of its contractors, you’ve brought this stressful period to a close. You’ve entered a Non-Prosecution Agreement with the U.S. Attorney’s Office for the Western District of Washington. Perhaps the agreement even includes a civil settlement as well, resolving several parallel investigations.
But not two weeks later, an Assistant U.S. Attorney (“AUSA”) for the District of Oregon informs you that you’re the target of a criminal probe concerning the exact same conduct. How is this possible? As unfair as it seems, it has long been the position of federal agencies and DOJ components that other DOJ components are not bound by an agreement unless the agreement provides as much.
Consider the case of Prime Partners, a Swiss asset management firm accused of aiding U.S. taxpayers in New York and elsewhere of evading their federal income taxes. In August, the U.S. Attorney’s Office for the Southern District of New York entered a Non-Prosecution Agreement with Prime Partners in exchange for extraordinary cooperation with the Office’s investigation and the firm’s institution of substantial changes to its practices. The agreement states:
It is further understood that this Agreement does not bind any other federal, state, or local prosecuting authorities other than this Office and the [DOJ] Tax Division. If requested by Prime Partners, this Office and the Tax Division will, however, bring the cooperation of Prime Partners to the attention of such other prosecuting offices or regulatory agencies.
Parties caught up in such a situation should consider a few things:
- Beware of the kind of limiting language in the Prime Partners agreement, which is common in government settlements.
- Insist on language in any plea or other settlement agreement that to the effect that it binds other federal agencies, or at least all other components of the Department of Justice.
- If you find yourself caught up in the kind of bind I describe at the beginning, consider an appellate challenge.
Healthcare news and information site RACmonitor reported with some fanfare in early November of last year that DOJ Civil Fraud Section Director Michael Granston (a friend and former DOJ colleague) had announced at a conference on October 30 that DOJ would begin to seriously consider urging courts to dismiss meritless qui tam or whistleblower actions brought under the False Claims Act at or shortly after the government had reached its intervention decision.
On November 17, Law360 reported that DOJ, in response to RACmonitor’s reporting, had denied adopting a more aggressive stance towards seeking dismissal of qui tam actions it had determined to be lacking in merit.
Now we learn that DOJ’s denial of a policy change to Law360 back in November was not entirely accurate. Indeed, on January 10, the same Michael Granston quoted by RACmonitor issued an internal memorandum marked “Privileged and Confidential; For Internal Government Use Only” announcing a general framework for evaluating when to seek dismissal of qui tam actions, pursuant to 31 USC § 3730(c)(2)(A)—something DOJ has only sparingly done over the last 30 years since the FCA was substantially amended.
- Some former DOJ attorneys start blogs; others use more innovative methods to develop business: Ex-Justice Dept. lawyer offered to sell secret U.S. whistleblower lawsuits to targets of the complaints
- Not to be outdone by any attorney: Six CPAs Accused of Rigging Audit Inspections
- Lobbying groups apparently want to join the party too: GAO Will Probe ‘Fake Comments’ to Regulatory Agencies
- A look behind the assistant to Goldman Sachs’ president, who stole $1.2 million in wine and took a trip around the world: Looking for the Real ‘Nicolas De-Meyer,’ Mysterious Goldman Sachs Wine Thief
- In local news, be sure to get a license before you attempt to ship weapons to Kurdish fighters in Iraq
- Also, beware of an investment group that claims the United Nations “is just a front for what we want to do”
- Finally, ‘Dirty Money’ on Netflix should be good
Hypothetical Bad News. You or your company has been served with a civil investigative demand requiring you to produce documents and answer questions from the government. The Department of Justice (DOJ) is investigating you for suspected violations of the False Claims Act, or perhaps for participating in a price-fixing conspiracy in violation of the antitrust laws. The investigation could drag on for years and—if you’re found liable—you may be on the hook for millions of dollars.
Hypothetical Worse News. Government agents have also inspected your premises pursuant to a search warrant, and you learn that associates of yours have been subpoenaed to testify before a grand jury. You are the target—or at least the subject—of a criminal investigation. For a company, a criminal conviction and associated fines could be devastating. For an individual, it could result in the loss of your liberty.
To provide a more concrete example, there have been dozens of administrative and criminal proceedings over the last few years that grew out of a massive public corruption scandal involving the bribing of dozens of Navy officials in exchange for participating in or turning a blind eye to baseless bills from an overseas defense contractor. Many participants have been criminally prosecuted, but the criminal investigation (which remains ongoing) has also coincided with administrative enforcement actions that resulted in the debarment of numerous contractors, permanently preventing them from doing business with the government.
More and more, government officials and agencies bring to bear all of the enforcement tools—civil, criminal, and administrative—in parallel investigations and proceedings to put a stop to unlawful conduct. If you’re the target of parallel investigations, you and your lawyer will need to be mindful about the different discovery tools available to the government, the risks of compromising your rights in one investigation through your response to another, and the need for a global settlement with the government.
All of that could fill a treatise, so I won’t try to cover it here. Instead, I’ll cover:
- A brief overview of the DOJ’s approach to parallel investigations and proceedings (they’re favored).
- Your chances of halting either a civil or administrative proceeding pending resolution of the criminal case (spoiler alert: not great).
- The importance of thinking strategically at every stage of your response—not just about the individual request or process you’re responding to—but also about how it affects the other investigations (it’s really important).