Month: April 2022

Source: United States Department of Justice Criminal Division

Remarks as Prepared for Delivery

I have been fortunate in my career to have served as a prosecutor, as a defense attorney, and to work as a chief compliance officer of a Fortune 500 company. The detection and prevention of criminal conduct has been a constant across these three roles. Perhaps the most challenging of the three roles has been serving in compliance.

I know the resource challenges. The challenges you have accessing data. The relationship challenges. The silo-ing of your function. You are called upon to be a resource for information, an enforcer of law and policy, and somehow the primary architect of your company’s ethical culture. I have seen first-hand how a strong compliance program can ward off misconduct and empower ethical employees. Although I am the head of the Criminal Division, I believe that enforcement, while a critical tool, is not our only one. I believe that the number of prosecutions we bring is not necessarily the most accurate measure of our success.

Having served in these three positions, I know that your compliance role is perhaps the most impactful, because you have a direct role in utilizing the most effective tool in addressing crime – you are trying to prevent it in the first place. That is why we closely evaluate corporate compliance programs during our corporate investigations and after our corporate resolutions, and give significant credit to companies that build strong controls to detect and prevent misconduct.

Today, I want to describe in detail about how we evaluate corporate compliance programs to ensure that companies are designing and implementing effective compliance systems and controls, creating a culture of compliance, and promoting ethical values. As our Evaluation of Corporate Compliance Programs guidance makes clear, we expect an effective corporate compliance program to be much more than a company’s policies, procedures, and internal controls. We expect companies to implement compliance programs that: (1) are well designed, (2) are adequately resourced and empowered to function effectively, and (3) work in practice.

First, when we say that we expect a company’s compliance program to be well designed, we closely examine the company’s process for assessing risk and building a program that is tailored to manage its specific risk profile. We want to see whether the company has implemented policies and procedures that are designed to address the key risk areas identified in its risk assessments, and that those policies and procedures are easily accessible and understandable to the company’s employees and business partners. We want to know how the company is training employees, management, and third-parties on the risk areas and responsibilities applicable to those individuals. Policies, training, and other processes should address relevant high-risk elements of the company’s business model, such as third-party relationships or mergers and acquisitions. We want to see that the company has established a process for reporting violations of law or company policy that encourages employees to speak up without fear of retaliation, and that those reports are taken seriously, appropriately documented, investigated, and—if substantiated—remediated.

Second, when we are evaluating whether a compliance program is adequately resourced and empowered to function effectively, we want to know more than dollars, headcount, and reporting lines. We will review the qualifications and expertise of key compliance personnel and other gatekeeper roles. We want to know if compliance officers have adequate access to and engagement with the business, management, and the board of directors. We seek to understand whether and how a company has taken steps to ensure that compliance has adequate stature within the company and is promoted as a resource. A company’s commitment to promoting compliance and ethical values at all levels—from the chief executive on down to middle and lower-level managers—is critical.

Third, we want to see evidence that the compliance program is working in practice. We look at whether the company is continuously testing the effectiveness of its compliance program, and improving and updating the program to ensure that it is sustainable and adapting to changing risks. We want to know that a company can identify compliance gaps or violations of policy or law. Equally importantly, we want to see how the company addresses the root causes of these gaps or violations and finds ways to improve its controls and prevent recurrence of issues. We want to see examples of compliance success stories— the discipline of poor behavior, the rewarding of positive behavior, the transactions that were rejected due to compliance risk, positive trends in whistleblower reporting, and the partnerships that have developed between compliance officers and the business. We are also interested in how a company measures and tests its culture—at all levels of seniority and throughout its operations—and how it uses the data from that testing to embed and continuously improve its ethical culture.

There is a separate question of whether a company is demonstrating an ethical culture in practice. Do employees feel empowered to bring issues and questions to the management’s attention? Are managers and compliance officers providing ethical advice to salespeople even though such advice may mean loss of business? Just as we use data analytics to detect and combat criminal schemes, we urge corporations to consider what data analytic tools they can use to monitor compliance with laws and policies within their operations and to ferret out wrongdoing when it occurs.

In addition, whether and how the company responds to prior misconduct speaks to its commitment to compliance and an ethical culture. Companies that have effectively deployed capabilities to conduct independent monitoring and testing of all elements of their compliance program, not just their financial controls—for example, testing effectiveness of training, communications, and compliance culture—and made improvements to the compliance program as a result, set themselves apart. I know that many of you are working at or on behalf of companies to help them design and implement compliance programs, and some of you may be making compliance presentations to our prosecutors in the future. On a practical level, when communicating with us, it is important to demonstrate how a compliance program has been upgraded to address the root cause of the misconduct, and how it is being tested and updated to ensure that it is sustainable and adaptable to changing risk.

We prefer not to hear a ‘check-the-box’ presentation from outside counsel. We like to see the Chief Compliance Officer leading the compliance presentation and demonstrating knowledge and ownership of the compliance program. Not for show, but because we want to empower these teams. Other senior management should also participate, taking ownership of their role in the compliance program and demonstrating commitment to compliance. Based on what we learn about the company’s compliance program, we determine whether an independent compliance monitor should be imposed. We believe that monitorships are effective tools for strengthening corporate compliance programs in companies where there were compliance weaknesses that resulted in criminal conduct. Monitors can be allies to compliance officers in making recommendations that create lasting, sustainable change in corporate culture.

As the Deputy Attorney General discussed last October, we can expect to see the Department imposing independent corporate monitors whenever it is appropriate in order to satisfy our prosecutors that a company is living up to its compliance and disclosure obligations under a non-trial resolution.

When a monitorship is imposed, we follow the Criminal Division’s well-settled selection procedures. When proposing their three monitor candidates to the Division, we encourage companies to not only ensure that the candidates are eminently qualified with deep compliance experience but also that the candidates are diverse both in terms of their types of experience as well as background, in keeping with the Department’s commitment to diversity, equity, and inclusion. Monitors, of course, are not appropriate in every case. For example where a company:

• has invested—not just from a financial perspective, but from a concerted commitment from the top down—in implementing a strong compliance program;
• has been able to test its controls and demonstrate they are effective;
• has made relevant updates to its program to adapt to changing risks;
• and has cultivated a strong culture of compliance and ethical values, our prosecutors may decide not to impose a monitor.

To ensure that we are equipped with the resources to make these determinations, we have prioritized building a wealth of compliance expertise among our prosecutors and dedicating resources to strengthen our abilities to assess the effectiveness of compliance programs. We recently revamped the Fraud Section’s former Strategy, Policy, and Training Unit into the Corporate Enforcement, Compliance, and Policy (CECP) Unit to align the name with the Unit’s mission, and we’ve announced new management comprised of prosecutors and former compliance and defense lawyers with deep experience in compliance, monitorships, and corporate enforcement matters. We plan to add additional capability to the Unit. This Unit has responsibility for many aspects of the Fraud Section’s corporate criminal enforcement practice.  

When a company comes in to make a compliance presentation to the Fraud Section, it will face tough and probing questions from our compliance specialists. The CECP Unit also provides training on compliance and monitorship matters to prosecutors within and outside the Fraud Section, and works on policy issues. Having these resources helps us to use a consistent approach when evaluating whether a monitor is appropriate. It also allows us to employ appropriate compliance obligations to ensure corporations are maintaining effective compliance programs post-resolution. When we determine that a monitor is not necessary, that does not mean that the company’s obligations to continue to test, improve, and demonstrate the effectiveness of its compliance program end when the resolution is papered. Companies without a monitor are still required to comply with ongoing obligations and report to the Department regarding the status of compliance obligations.

Our CECP attorneys review work plans and self-reports and continue to evaluate a company’s progress—both in reviewing and testing its compliance program and in making the appropriate enhancements to ensure that, at the end of the term of the resolution agreement, the corporation has an effective and sustainable corporate compliance program that is designed to detect and prevent recurrence of criminal misconduct. We are holding companies accountable for failing to comply with their obligations under our corporate resolutions—including obligations to implement an effective compliance program, cooperate, or report allegations of misconduct.

Companies face consequences for violating our agreements, which can and have involved breaches and extensions of the agreements, including extensions of monitorships. Just as we propose charges based on the particular facts and circumstances of a given case, so too with breaches of corporate resolutions: we tailor our proposed sanctions to the nature of any breach, to address the particular facts and circumstances at bar. Whether it’s a corporate guilty plea or an extension of a monitorship, we will pursue appropriate punishments. Our message is clear – companies that make a serious investment in improving their compliance programs and internal controls will be viewed in a better light by the Department. Support your compliance team now or pay later.

Chief Compliance Officers and their functions should have true independence, authority, and stature within the company. In order to further empower Chief Compliance Officers, for all of our corporate resolutions (including guilty pleas, deferred prosecution agreements, and non-prosecution agreements), I have asked my team to consider requiring both the Chief Executive Officer and the Chief Compliance Officer to certify at the end of the term of the agreement that the company’s compliance program is reasonably designed and implemented to detect and prevent violations of the law (based on the nature of the legal violation that gave rise to the resolution, as relevant), and is functioning effectively. In certain resolutions, we will require additional certification language.

As you are aware, when a monitor is imposed pursuant to a resolution, we do not require companies themselves to also provide annual self-reports on the state of their compliance programs since the monitor provides annual reports to the government. However, in instances where a monitor is not imposed and a company is required to provide annual self-reports on the state of their compliance programs, we will consider requiring that the CEO and the CCO will also have to certify that all compliance reports submitted during the term of the resolution are true, accurate, and complete. By taking this step, we are ensuring that Chief Compliance Officers receive all relevant compliance-related information and can voice any concerns they may have prior to certification. I have been in your CCO role. Again, I know the challenges.

Today’s announcement is not punitive in nature. No, it is a new tool in your arsenal to combat those challenges. It is the type of resource that compliance officials, including myself, have wanted for some time, because it makes it clear that you should and must have appropriate stature in corporate decision-making. It is intended to empower our compliance professionals to have the data, access, and voice within the organization to ensure you, and us, that your company has an ethical and compliance focused environment.

A final word, connecting our emphasis on strengthening compliance to some of our recent policy announcements. When you are asked about your compliance program and whether its adequately creating, maintaining, and supporting an ethical culture, the question again goes to individual accountability. We want to know about your investment in compliance, not simply because we want you to hire more consultants or buy more sophisticated training software. No, as a former Chief Compliance Officer who now serves as the head of the Criminal Division, I want to know whether you are doing everything you can to ensure that when that individual employee is facing a singular ethical challenge, he has been informed, trained, and empowered to choose right over wrong. Or if he makes the wrong choice, you have a system that immediately detects, remediates, disciplines, and then adapts to ensure that others do not follow suit. That is how powerful a role you have in improving our world. Embracing that calling, today and every day.

I look forward to working with you, individually and collectively, in preventing and combatting criminality in the workplace and our world at large. Thank you, and have a wonderful conference.

Source: United States Department of Justice Criminal Division

A Texas physician was convicted today for unlawfully prescribing more than one million pills of the opioid hydrocodone.   

According to court documents and evidence presented at trial, James Pierre, 52, a doctor, of Houston, unlawfully prescribed controlled substances from June 2015 through July 2016 to individuals posing as patients at West Parker Medical Clinic (West Parker), a pill-mill clinic located in Houston. 

Trial evidence showed that Pierre, along with his physician assistant, issued unlawful prescriptions for hydrocodone and carisoprodol, a combination of controlled substances known as the “Las Vegas Cocktail,” to hundreds of individuals posing as patients each week. So-called “runners” brought numerous people to pose as patients at West Parker and paid approximately $220 to $500 in cash for each visit that resulted in prescriptions for dangerous drugs. Throughout the scheme, West Parker made approximately $1,750,000 from prescriptions, and over $300,000 went to Pierre.

Pierre was convicted of one count of conspiracy to unlawfully distribute and dispense controlled substances and seven counts of unlawfully distributing and dispensing controlled substances. He is scheduled to be sentenced on June 27 and faces up to 20 years in prison for each count. A federal district court judge will determine the sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

To date, one co-conspirator has pleaded guilty to conspiracy to unlawfully distribute controlled substances.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Jennifer Lowery for the Southern District of Texas; and Special Agent in Charge Daniel C. Comeaux of the DEA’s Houston Division made the announcement.

DEA Houston investigated the case.

Trial Attorney John-Alex Romano of the Criminal Division’s Human Rights and Special Prosecutions Section and Trial Attorney Maryam Adeyola of the Criminal Division’s Fraud Section are prosecuting the case. Assistant U.S. Attorney Jon Muschenheim of the Southern District of Texas is handling forfeiture.

Source: United States Department of Justice News

I am thrilled to participate in the first-annual spring gathering of antitrust enforcers. It is a privilege to be among this incredibly esteemed, talented and dedicated group of speakers and attendees. Admittedly, I was excited – maybe too excited – to learn that people are calling this “Antitrust Day.” May today be the first of many. And maybe next year, this occasion will be reflected in the greeting card aisle.

I look forward to learning from each other so that we can be more effective advocates on behalf of the public at this critical moment in the history of antitrust enforcement. I am confident it will be an engaging program.

I would like to open by highlighting some changes we have made at the Antitrust division, and announcing some new ones. As I have discussed before, the Division has a preference for remedies over settlements. Over the last few months, the division has taken important steps to reject risky settlements and challenge illegal mergers in court. In fact, we have sued to block or obtained abandonments in four merger matters in as many months. Just last week, we rejected a settlement proposal from Cargotec and Konecranes, which abandoned their proposed $5 billion transaction in the face of opposition from the Antitrust Division and the UK’s CMA.

Bourgeoning scholarship demonstrates that flimsy settlements often fail. For example, at the Food and Agriculture listening session that we held last week with the FTC, we heard concerns from a milk producer about a 2017 dairy industry merger that failed to preserve competition. Stories like this reaffirm our policy view that the public cannot bear the risk of a divestiture that flops.

In order to protect the public, the division must be able to go to court to block a deal. We will bring tough cases — cases where charging is consistent with the facts and the law, and in criminal cases with the Principles of Federal Prosecution. We have six active civil cases, including the monopolization case against Google and merger challenges against American Airlines, Penguin-Random House, United Health Group, U.S. Sugar, and Verzatec. In the criminal program, we have 21 indicted cases against 42 individuals, including 9 CEOs and corporate presidents under indictment. We ended FY 2021 with 146 pending grand jury investigations, which is the most in 30 years. We will aggressively pursue enforcement of the criminal antitrust laws to protect consumers, workers and businesses harmed by unlawful collusion and monopolization.

We are more committed than ever to litigating when we believe a violation has taken place. I have designated two acting DAAGs to oversee our litigation docket: Carol Sipperly and Hetal Doshi. It’s the first time I’m aware of that the Antitrust Division has had not one but two litigation deputies—a reflection of our intense focus on trying cases. Both Carol and Hetal are longtime department prosecutors with a wealth of experience, including supporting Antitrust Division trials.  

Carol has first chaired and co-led over 30 jury trials. Her career with the Justice Department began as an Assistant U.S. Attorney in the Southern District of New York, where she investigated and prosecuted cases involving organized crime as well as complex white-collar violations, including cases against John Gotti Jr. and Darryl Strawberry. She is also a veteran of the Division’s LIBOR cases. For the last two years, Carol has championed vigorous antitrust enforcement leading the Division’s criminal litigation program as Senior Litigation Counsel and (Acting) Co-Director of Criminal Litigation. In this role, she supervised and supported trial teams in U.S. v. Penn, U.S. v. Aiyer, and U.S. v. Lischewski.

Hetal is a highly accomplished trial attorney who has experience both in private practice and in the U.S. Attorney’s office in Denver. Hetal supervised civil and criminal trial teams and trained and mentored AUSAs. She served on the Financial Fraud Enforcement Task Force and led investigations of global international banks for their conduct in causing the 2008 global financial crisis, resulting in historic, multi-billion-dollar penalties. She also established a cryptocurrency fraud investigations and prosecution practice. Hetal has supported Antitrust prosecution trial teams in Denver and through the Procurement Collusion Strike Force.

Of course, the division has also had talented litigation directors and veteran trial lawyers on staff whose insights and experience support our civil and criminal trial teams. Their expertise will be deployed to help train junior litigators, supervise trial teams, provide support for special matters like motions to compel or help litigate especially complex matters and unique issues. We are in the process of hiring additional trial lawyers from outside the department to grow our bench and complement our internal talent.

Our goal is simple: we must be prepared to try cases to a verdict when we think a violation has taken place. And that means that our capacity for litigation must grow with the demands of modern antitrust enforcement. In other words, the division must have the scale to litigate multiples of our current docket. To do so, we are institutionalizing shared resources to support trial teams, recognizing the complexity of modern litigation. At bottom, we will work toward a steady state where the division is not constrained by the costs of litigation. Accordingly, the President’s FY 2023 budget request for the division incorporates an increase of over $80 million. We intend to put the money to good use.

This is especially true because the investment in antitrust enforcement pays enormous dividends. In addition to the massive benefits to the economy from competition, the fines that result from our criminal enforcement more than surpass our annual expenditures. Over the most recent ten fiscal years, the Antitrust Division is responsible for depositing more than $8.7 billion in criminal antitrust fines and penalties to the Crime Victims Fund – 42% of the $20.8 billion deposited overall. The division is also responsible for nearly $2 billion in additional contributions to the general treasury fund over that time period.

I want to say clearly that we are committed to litigating cases using the whole legislative toolbox that Congress has given us to promote competition. One tool that I think we can use more is Section 8 of the Clayton Act. Section 8 helps prevent collusion before it can occur by imposing a bright-line rule against interlocking directorates.

For too long, our Section 8 enforcement has essentially been limited to our merger review process. We are ramping up efforts to identify violations across the broader economy, and we will not hesitate to bring Section 8 cases to break up interlocking directorates.

We are also acting in real time to intervene wherever needed to protect competition, including filing statements of interest in state and federal courts and before federal agencies.

On criminal enforcement, I am excited to announce that as of today, the division is making important updates to its leniency program. Leniency is one of the division’s most important enforcement tools for rooting out cartels because it incentivizes corporations involved in wrongdoing to do the right thing by self-reporting.

While these core incentives have not changed, the updates to the leniency policy will further promote accountability. First, under the revised leniency policy, to qualify for leniency, a company must promptly self-report after discovering its wrongful conduct. A company that discovers it committed a crime and then sits on its hands hoping it goes unnoticed does not deserve leniency.

Second, to qualify for leniency, a company must now undertake remedial measures to redress the harm it caused and improve its compliance program.  

Just as important as the changes to the policy is the division’s commitment to making that policy transparent, predictable, and accessible to the public. As of today, the division’s leniency policy lives in the antitrust chapter of the Justice Manual, which is easy to find on the DOJ website and is the definitive go-to source for internal policy and guidance across the department.

Today we are also issuing an updated version of the Frequently Asked Questions about our leniency policy. Front and center in our minds when updating that document was the need to simplify and demystify our practices. The FAQs are written in plain language. And we have added nearly 50 FAQs to ensure they address all the recurring questions we’ve received — and then some. This document will make it even easier for the public to learn about leniency and understand what benefits it provides and what the division requires in return.

When I say the public, I want to emphasize that we are focused on making our policies intelligible to all: outside counsel, in-house counsel, and businesspeople in all sectors of the economy and at all levels of sophistication. There are no unwritten rules to enforcement at the Antitrust Division. We make our enforcement decisions based on transparent and predictable criteria.

And we need to change the language of antitrust more broadly to make laws more accessible to the public that they protect. By facilitating equal access to justice and making our processes transparent, we guarantee just outcomes for all. When it comes to leniency, the easier we make it for the public to understand the program, the more applications we receive, and the stronger the program’s incentive structure is — which ultimately improves our enforcement capabilities.

As I said earlier, the division is considering all of the tools at our disposal. That’s true across the board, when it comes to both civil and criminal enforcement. We take our mandate to enforce the antitrust laws seriously — especially when it comes to making sure we are deterring, detecting, and where warranted prosecuting the most flagrant, pernicious offenses.

Robust antitrust enforcement is particularly critical right now. As we’ve seen time and time again, collusion thrives in consolidated industries. And when Congress passed the Sherman Act in 1890, it made Section 2 a crime as it did with Section 1. Since the 1970s, Section 2 has been a felony, just like Section 1. In 2004, Congress increased Section 2’s criminal penalties in lockstep with the increased penalties for Section 1 crimes. So if the facts and the law, and a careful analysis of Department policies guiding our use of prosecutorial discretion, warrant a criminal Section 2 charge, the Division will not hesitate to enforce the law.

Another area where I am determined to improve is in the language of antitrust – we have launched an Access to Antitrust Justice Initiative, which we are calling AT2J, to change the language of antitrust law to make enforcement more accessible and responsive. Antitrust should be accessible to all citizens, consumers, workers, and small businesses – not just large corporations that can afford expensive counsel. This will impact the language in our public statements and investigations, the participants in our public fora. We are already seeing this play out in our review of the merger guidelines alongside our colleagues at the FTC. We are following a rigorous, inclusive process in reviewing the merger guidelines, providing transparency throughout, and seeking input from a wide array of stakeholders in merger policy, not just attorneys and economists, but also business owners, workers, farmers, and consumers who have been impacted by corporate consolidation. We submitted a public Request for Information posing several questions regarding merger analysis, and have already received over 275 comments, far outpacing the 51 comments received in the first round of the 2010 Guidelines review. Last week we partnered with the FTC to hold the first of four Listening Forums to hear directly from those affected by consolidation. And, of course, we are here today with our international and state counterparts to hear and learn from your experiences.

Indeed, this summit, which is being live streamed for free to enhance access and share our policies and direction with the public at large, is also a celebration of cooperation and collaboration as well as a reminder that partnerships among competition enforcers are transformative. At a case level, cooperation enables us to cover more ground at a deeper level. Exchanges between teams sharpen our analysis and refine our thinking, and can give us access to evidence and information to which we would not otherwise have access. At a macro level, our partnerships are a force multiplier. Individually, each of us has our own “superpower;” and is a force for good, but when we act together, we are the Avengers. And the world today, the global economy around us, needs powerful voices ensuring competitive markets and fair competition. When we work together, that is the competition enforcement community.

One of the challenges I have given to my team is to make collaboration among DOJ’s competition partners even better. On the international side, we are taking a close look at tools like second generation agreements in the international space and continue to work with our partners bilaterally, inside multilateral organizations, and in a variety of dialogues. We also are expanding our programs to provide technical assistance and litigation resources to partners in order to help them meet the competition challenges of the modern economy.

On the domestic front, we are focused on implementing the Executive Order on Promoting Competition in the American Economy. We launched a new initiative to support antitrust enforcement throughout the U.S. government, including through new partnerships with the USDA and Federal Maritime Commission to provide litigation support for their statutory competition authorities. We also have greatly expanded partnerships in support of competition with numerous other agencies, including DOL, DOD, DOT and the CFPB. We are training interagency partners throughout the federal government on the antitrust laws. As federal infrastructure spending increases, we also are continuing our efforts to seek out and prosecute procurement collusion through the Procurement Collusion Strike Force.

My first step to getting all this done has been to make sure the people are in place to build and support our partnerships. For this, I have looked to a strong career staff with a few additions. I created the position of Policy Director to oversee the division’s policy development work in a cross-functional way, including overseeing its International, Competition Policy, and Appellate sections. Career attorney Dave Lawrence has ably stepped into the post. Patty Brink took on the role of senior counsel for International and Intergovernmental Affairs. Lynda Marshall continues on as our International Chief and Karina Lubell is now chief of our policy group. Both lead strong staff teams. And Sarah Allen has joined us as a counsel in the Front Office to focus on our collaboration with state attorneys general, which is vital to effective enforcement. I have asked all of them to do a deep dive on our resources and present a long-term plan for growing in our partnerships. We are working through projections of where we want to be not just tomorrow, but in three years and beyond.

These are exciting times for the antitrust and competition law enforcement community. Thank you for joining this summit and happy Antitrust Day. I look forward to today’s discussions.

Source: United States Department of Justice

I am thrilled to participate in the first-annual spring gathering of antitrust enforcers. It is a privilege to be among this incredibly esteemed, talented and dedicated group of speakers and attendees. Admittedly, I was excited – maybe too excited – to learn that people are calling this “Antitrust Day.” May today be the first of many. And maybe next year, this occasion will be reflected in the greeting card aisle.

I look forward to learning from each other so that we can be more effective advocates on behalf of the public at this critical moment in the history of antitrust enforcement. I am confident it will be an engaging program.

I would like to open by highlighting some changes we have made at the Antitrust division, and announcing some new ones. As I have discussed before, the Division has a preference for remedies over settlements. Over the last few months, the division has taken important steps to reject risky settlements and challenge illegal mergers in court. In fact, we have sued to block or obtained abandonments in four merger matters in as many months. Just last week, we rejected a settlement proposal from Cargotec and Konecranes, which abandoned their proposed $5 billion transaction in the face of opposition from the Antitrust Division and the UK’s CMA.

Bourgeoning scholarship demonstrates that flimsy settlements often fail. For example, at the Food and Agriculture listening session that we held last week with the FTC, we heard concerns from a milk producer about a 2017 dairy industry merger that failed to preserve competition. Stories like this reaffirm our policy view that the public cannot bear the risk of a divestiture that flops.

In order to protect the public, the division must be able to go to court to block a deal. We will bring tough cases — cases where charging is consistent with the facts and the law, and in criminal cases with the Principles of Federal Prosecution. We have six active civil cases, including the monopolization case against Google and merger challenges against American Airlines, Penguin-Random House, United Health Group, U.S. Sugar, and Verzatec. In the criminal program, we have 21 indicted cases against 42 individuals, including 9 CEOs and corporate presidents under indictment. We ended FY 2021 with 146 pending grand jury investigations, which is the most in 30 years. We will aggressively pursue enforcement of the criminal antitrust laws to protect consumers, workers and businesses harmed by unlawful collusion and monopolization.

We are more committed than ever to litigating when we believe a violation has taken place. I have designated two acting DAAGs to oversee our litigation docket: Carol Sipperly and Hetal Doshi. It’s the first time I’m aware of that the Antitrust Division has had not one but two litigation deputies—a reflection of our intense focus on trying cases. Both Carol and Hetal are longtime department prosecutors with a wealth of experience, including supporting Antitrust Division trials.  

Carol has first chaired and co-led over 30 jury trials. Her career with the Justice Department began as an Assistant U.S. Attorney in the Southern District of New York, where she investigated and prosecuted cases involving organized crime as well as complex white-collar violations, including cases against John Gotti Jr. and Darryl Strawberry. She is also a veteran of the Division’s LIBOR cases. For the last two years, Carol has championed vigorous antitrust enforcement leading the Division’s criminal litigation program as Senior Litigation Counsel and (Acting) Co-Director of Criminal Litigation. In this role, she supervised and supported trial teams in U.S. v. Penn, U.S. v. Aiyer, and U.S. v. Lischewski.

Hetal is a highly accomplished trial attorney who has experience both in private practice and in the U.S. Attorney’s office in Denver. Hetal supervised civil and criminal trial teams and trained and mentored AUSAs. She served on the Financial Fraud Enforcement Task Force and led investigations of global international banks for their conduct in causing the 2008 global financial crisis, resulting in historic, multi-billion-dollar penalties. She also established a cryptocurrency fraud investigations and prosecution practice. Hetal has supported Antitrust prosecution trial teams in Denver and through the Procurement Collusion Strike Force.

Of course, the division has also had talented litigation directors and veteran trial lawyers on staff whose insights and experience support our civil and criminal trial teams. Their expertise will be deployed to help train junior litigators, supervise trial teams, provide support for special matters like motions to compel or help litigate especially complex matters and unique issues. We are in the process of hiring additional trial lawyers from outside the department to grow our bench and complement our internal talent.

Our goal is simple: we must be prepared to try cases to a verdict when we think a violation has taken place. And that means that our capacity for litigation must grow with the demands of modern antitrust enforcement. In other words, the division must have the scale to litigate multiples of our current docket. To do so, we are institutionalizing shared resources to support trial teams, recognizing the complexity of modern litigation. At bottom, we will work toward a steady state where the division is not constrained by the costs of litigation. Accordingly, the President’s FY 2023 budget request for the division incorporates an increase of over $80 million. We intend to put the money to good use.

This is especially true because the investment in antitrust enforcement pays enormous dividends. In addition to the massive benefits to the economy from competition, the fines that result from our criminal enforcement more than surpass our annual expenditures. Over the most recent ten fiscal years, the Antitrust Division is responsible for depositing more than $8.7 billion in criminal antitrust fines and penalties to the Crime Victims Fund – 42% of the $20.8 billion deposited overall. The division is also responsible for nearly $2 billion in additional contributions to the general treasury fund over that time period.

I want to say clearly that we are committed to litigating cases using the whole legislative toolbox that Congress has given us to promote competition. One tool that I think we can use more is Section 8 of the Clayton Act. Section 8 helps prevent collusion before it can occur by imposing a bright-line rule against interlocking directorates.

For too long, our Section 8 enforcement has essentially been limited to our merger review process. We are ramping up efforts to identify violations across the broader economy, and we will not hesitate to bring Section 8 cases to break up interlocking directorates.

We are also acting in real time to intervene wherever needed to protect competition, including filing statements of interest in state and federal courts and before federal agencies.

On criminal enforcement, I am excited to announce that as of today, the division is making important updates to its leniency program. Leniency is one of the division’s most important enforcement tools for rooting out cartels because it incentivizes corporations involved in wrongdoing to do the right thing by self-reporting.

While these core incentives have not changed, the updates to the leniency policy will further promote accountability. First, under the revised leniency policy, to qualify for leniency, a company must promptly self-report after discovering its wrongful conduct. A company that discovers it committed a crime and then sits on its hands hoping it goes unnoticed does not deserve leniency.

Second, to qualify for leniency, a company must now undertake remedial measures to redress the harm it caused and improve its compliance program.  

Just as important as the changes to the policy is the division’s commitment to making that policy transparent, predictable, and accessible to the public. As of today, the division’s leniency policy lives in the antitrust chapter of the Justice Manual, which is easy to find on the DOJ website and is the definitive go-to source for internal policy and guidance across the department.

Today we are also issuing an updated version of the Frequently Asked Questions about our leniency policy. Front and center in our minds when updating that document was the need to simplify and demystify our practices. The FAQs are written in plain language. And we have added nearly 50 FAQs to ensure they address all the recurring questions we’ve received — and then some. This document will make it even easier for the public to learn about leniency and understand what benefits it provides and what the division requires in return.

When I say the public, I want to emphasize that we are focused on making our policies intelligible to all: outside counsel, in-house counsel, and businesspeople in all sectors of the economy and at all levels of sophistication. There are no unwritten rules to enforcement at the Antitrust Division. We make our enforcement decisions based on transparent and predictable criteria.

And we need to change the language of antitrust more broadly to make laws more accessible to the public that they protect. By facilitating equal access to justice and making our processes transparent, we guarantee just outcomes for all. When it comes to leniency, the easier we make it for the public to understand the program, the more applications we receive, and the stronger the program’s incentive structure is — which ultimately improves our enforcement capabilities.

As I said earlier, the division is considering all of the tools at our disposal. That’s true across the board, when it comes to both civil and criminal enforcement. We take our mandate to enforce the antitrust laws seriously — especially when it comes to making sure we are deterring, detecting, and where warranted prosecuting the most flagrant, pernicious offenses.

Robust antitrust enforcement is particularly critical right now. As we’ve seen time and time again, collusion thrives in consolidated industries. And when Congress passed the Sherman Act in 1890, it made Section 2 a crime as it did with Section 1. Since the 1970s, Section 2 has been a felony, just like Section 1. In 2004, Congress increased Section 2’s criminal penalties in lockstep with the increased penalties for Section 1 crimes. So if the facts and the law, and a careful analysis of Department policies guiding our use of prosecutorial discretion, warrant a criminal Section 2 charge, the Division will not hesitate to enforce the law.

Another area where I am determined to improve is in the language of antitrust – we have launched an Access to Antitrust Justice Initiative, which we are calling AT2J, to change the language of antitrust law to make enforcement more accessible and responsive. Antitrust should be accessible to all citizens, consumers, workers, and small businesses – not just large corporations that can afford expensive counsel. This will impact the language in our public statements and investigations, the participants in our public fora. We are already seeing this play out in our review of the merger guidelines alongside our colleagues at the FTC. We are following a rigorous, inclusive process in reviewing the merger guidelines, providing transparency throughout, and seeking input from a wide array of stakeholders in merger policy, not just attorneys and economists, but also business owners, workers, farmers, and consumers who have been impacted by corporate consolidation. We submitted a public Request for Information posing several questions regarding merger analysis, and have already received over 275 comments, far outpacing the 51 comments received in the first round of the 2010 Guidelines review. Last week we partnered with the FTC to hold the first of four Listening Forums to hear directly from those affected by consolidation. And, of course, we are here today with our international and state counterparts to hear and learn from your experiences.

Indeed, this summit, which is being live streamed for free to enhance access and share our policies and direction with the public at large, is also a celebration of cooperation and collaboration as well as a reminder that partnerships among competition enforcers are transformative. At a case level, cooperation enables us to cover more ground at a deeper level. Exchanges between teams sharpen our analysis and refine our thinking, and can give us access to evidence and information to which we would not otherwise have access. At a macro level, our partnerships are a force multiplier. Individually, each of us has our own “superpower;” and is a force for good, but when we act together, we are the Avengers. And the world today, the global economy around us, needs powerful voices ensuring competitive markets and fair competition. When we work together, that is the competition enforcement community.

One of the challenges I have given to my team is to make collaboration among DOJ’s competition partners even better. On the international side, we are taking a close look at tools like second generation agreements in the international space and continue to work with our partners bilaterally, inside multilateral organizations, and in a variety of dialogues. We also are expanding our programs to provide technical assistance and litigation resources to partners in order to help them meet the competition challenges of the modern economy.

On the domestic front, we are focused on implementing the Executive Order on Promoting Competition in the American Economy. We launched a new initiative to support antitrust enforcement throughout the U.S. government, including through new partnerships with the USDA and Federal Maritime Commission to provide litigation support for their statutory competition authorities. We also have greatly expanded partnerships in support of competition with numerous other agencies, including DOL, DOD, DOT and the CFPB. We are training interagency partners throughout the federal government on the antitrust laws. As federal infrastructure spending increases, we also are continuing our efforts to seek out and prosecute procurement collusion through the Procurement Collusion Strike Force.

My first step to getting all this done has been to make sure the people are in place to build and support our partnerships. For this, I have looked to a strong career staff with a few additions. I created the position of Policy Director to oversee the division’s policy development work in a cross-functional way, including overseeing its International, Competition Policy, and Appellate sections. Career attorney Dave Lawrence has ably stepped into the post. Patty Brink took on the role of senior counsel for International and Intergovernmental Affairs. Lynda Marshall continues on as our International Chief and Karina Lubell is now chief of our policy group. Both lead strong staff teams. And Sarah Allen has joined us as a counsel in the Front Office to focus on our collaboration with state attorneys general, which is vital to effective enforcement. I have asked all of them to do a deep dive on our resources and present a long-term plan for growing in our partnerships. We are working through projections of where we want to be not just tomorrow, but in three years and beyond.

These are exciting times for the antitrust and competition law enforcement community. Thank you for joining this summit and happy Antitrust Day. I look forward to today’s discussions.

Source: United States Department of Justice News

Assistant U. S. Attorneys Amanda Griffith (619) 546-8970 and Katherine McGrath (610) 546- 9054

NEWS RELEASE SUMMARY – April 4, 2022

SAN DIEGO – Michael Hamby Jr., a former Marine, was sentenced in federal court today to 340 months in prison and 20 years of supervised release for sexually molesting a 3-year-old child. The record reflects Hamby also advertised the child as available to others and expressed an intent to engage in sexual games with two other children, ages 4 and 8. 

Hamby, who pleaded guilty in May 2021, will be placed in a facility with a Sex Offender Management Program. He must also register as a sex offender.

“The lengthy sentence issued by the court reflects the horrific and depraved nature of Hamby’s crimes,” said U.S. Attorney Randy Grossman. “Following an NCIS investigation that spanned two countries, this prosecution ensures Hamby will face the consequences of his actions and the community will be protected from future harm.” Grossman thanked the prosecution team and federal agents who diligently pursued this egregious case.

“The world is a safer place for children now that Hamby has been sentenced to prison for his heinous crimes,” said Special Agent in Charge Michael Pierce of the NCIS Marine West Field Office. “As the federal law enforcement agency for the Department of the Navy, NCIS remains fully committed to protecting children from harm in communities where our DON personnel and their families live and work.”

According to the government’s sentencing memorandum, by all outward appearances, Hamby was a devoted husband and stepfather who served his country during two tours as a Marine, having reenlisted after completing his first tour in 2013 with an honorable discharge.  His guilty plea, however, reflects a much darker picture. He admitted that from October 15, 2016 through October 22, 2016, while Hamby was residing on Camp Pendleton, he engaged in email communications with his co-defendant, Elijah Alexander Vazquez, who is scheduled to be sentenced tomorrow at 10:30am, also before U.S. District Judge John Houston. In the emails, Hamby and Vazquez discussed their mutual sexual interest in children and arranged to meet in person to engage in sexual activity with a 3-year old child. The defendant expressed his ability to persuade, coerce and induce the 3-year old child to engage in sexual activity. During their email exchanges, Hamby and Vazquez made plans to meet in person on or about October 22, 2016.  They ultimately did meet as planned and engaged in various sexual acts with the child, including vaginal and anal penetration.

DEFENDANT                                               Case Number 19CR1904-JAH                                

Michael Hamby, Jr.                                        Age: 30                                  

SUMMARY OF CHARGES

Enticement of a Minor — Title 18, U.S.C., Section 2422(b)

Maximum penalty: A mandatory minimum 10 years in prison and a maximum of life in prison; a maximum $250,000 fine; and mandatory special assessments of $100 and $5,000.

AGENCY

Naval Criminal Investigative Service