Month: June 2022

Source: United States Department of Justice News

Distributed Over 335 Kilos of Meth, 22 Kilos of Heroin, 140 Officers, 14 Agencies Participated in Takedown, Seized Large Quantities of Drugs

Source: United States Department of Justice

Remarks as Prepared for Delivery

Good afternoon. It’s great to be with you. I’m glad to be joining you virtually although I wish I were there in person. Thank you for inviting me to speak with you today – this is a terrific gathering and a great forum, particularly for women leading investigations and enforcement work around the world. I’m especially glad to be joining this discussion among a broad group of practitioners, in house counsel and regulators.   

I want to use my time with you all to speak about trends in the department’s approach to corporate criminal enforcement, with a particular focus on sanctions enforcement. Before I get to sanctions let me start by updating you on some of the department’s most recent work when it comes to corporate criminal enforcement – it has been a very active time.

In the span of the last month and a half, the department’s investigators and prosecutors have: 

• Charged the founder of Archegos and three other executives with racketeering and fraud related to market manipulation that caused more than $100 billion in market cap losses when Archegos collapsed; and
• The department announced four corporate guilty pleas — by Allianz Global Investors, Glencore International AG, Glencore Ltd. and Fiat Chrysler — who collectively agreed to pay over $7 billion in criminal penalties.

Between these five cases, we have charged 12 individuals, including a CEO, a CFO, three portfolio managers and three traders. While the number of charged defendants and penalty size alone don’t tell the whole story, the department is committed to a data-driven assessment of our work on corporate criminal enforcement, to identify what works and what does not.

When it comes to corporate criminal enforcement, our mission is to enforce the criminal laws that govern corporations, executives, officers and others, in order to protect jobs, guard savings and maintain our collective faith in the economic engine that fuels this country. We will hold those that break the law accountable and we will promote respect for the laws designed to protect investors, consumers and employees.

Our resolve is strengthened by another accelerating trend: corporate crime increasingly implicates national security in ways that are all-too-relevant to this group and in this current moment.

Corporations that pay bribes and kickbacks to foreign governments, that pay terrorist groups for protection, or that launder funds for sanctions evaders – they profit from crimes at the expense of our collective peace and prosperity.

Today, the geopolitical landscape is more challenging and complex than ever. The most prominent example is of course Russia’s invasion of Ukraine – which is nothing less than a fundamental challenge to international norms, sovereignty and the rule of law that underpins our society. Our collective security and prosperity face further challenges from other countries, such as those that sponsor the rampant theft of trade secrets, subject ethnic minority groups to forced labor or prop up regimes through institutional corruption.  

Increasingly, you and your clients are on the front lines in responding to these geopolitical realities. We recognize that the complicated geopolitical environment forces companies to constantly make tough and sometimes costly decisions. As advisors to the companies and institutions confronting this landscape, you can help your clients navigate this terrain and make the right decisions in this complex environment. The department wants to support those that do — such as the many companies who have made the tough and costly decision to depart from Russia in recent months.

To use the vernacular of national security lawyers, our goal is not only to hold people accountable, but to disrupt these threats using all the tools available to us. And we continue to develop new tools to do so every day. Just last week, the department announced the issuance of seizure warrants for two U.S. manufactured luxury jets owned by a Russian oligarch — the first such warrants issued based on violations of commerce regulations governing the reexport of U.S. aircraft to Russia. We will continue to develop creative tools to hold people, regimes and companies accountable.

An all-tools approach to corporate criminal enforcement includes enlisting the private sector to help watch out for misconduct within companies. For those truly committed to promoting a corporate culture that values and invests in compliance — rather than begrudges or under-resources it — the department stands ready to work with you to do what we can to promote and reward such cultures.

One tool that is increasingly prominent at the intersection of national security challenges and corporate criminal enforcement is the department’s work on sanctions enforcement.

For years, the department has targeted sanctions evasion — so we’re by no means starting on a blank canvas. Three sanctions cases in the last decade have each involved over $1 billion in collective civil and criminal penalties.

But what you have seen in the last few months is something completely different. The United States has shown leadership in galvanizing broad, multilateral networks to meet today’s challenges. The scope of the sanctions imposed on Russia by the United States and its allies and partners are of a new order of magnitude. Recognizing the critical need to enforce these sanctions with unprecedented intensity, the department launched Task Force KleptoCapture to pursue Russian sanctions evasion, particularly by oligarchs and other cronies who have propped up and enabled the Russian regime responsible for the unjustified and unprovoked aggression against Ukraine. We are pouring resources into sanctions enforcement, and you have seen and will continue to see results.

But it’s not just the war in Ukraine that has prompted a new level of intensity and commitment to sanctions enforcement. We have turned a corner in our approach. Over the last couple of months, I’ve given notice of that sea change by describing sanctions as “the new FCPA.”  

The growth of sanctions enforcement follows the path that the FCPA traveled before it. Both FCPA and sanctions enforcement are relevant to an expanding number of industries. They have extended beyond just U.S. actions to an increasingly multilateral enforcement regime. And they both reward companies that develop the capacity to identify misconduct within the organization, and then come forward and voluntarily disclose that misconduct to the department. Let me expand on each of those points.

First, sanctions enforcement is relevant to an expanding number of industries. Sanctions have been considered by some as a concern mainly for banks and financial institutions. As companies grapple with the fallout of Russian aggression and the new intensity of sanctions enforcement, though, they are recognizing that the risk of sanctions violations cuts across industries and geographic regions.

For any multinational corporation — indeed, for any business with an international supply chain — sanctions should be at the forefront of its approach to compliance. Every company needs to be pressure-testing its sanctions compliance program, for instance through risk assessments, technology upgrades and industry benchmarking. Every board of directors of such a company should be inquiring whether it is conducting necessary oversight of the company’s sanctions controls. Every corporate officer should be committed to ensuring they have the programs, culture, personnel and counsel to identify problem areas and navigate the rapidly changing landscape. And for anyone who seeks to evade sanctions, the warning is simple: the Justice Department is coming for you.

Our sanctions enforcement is also more and more a multinational team sport. Just as the last decade saw the world of FCPA enforcement expand to foreign partners and counterparts, the months and years ahead will see the department’s sanctions teams work hand-in-glove with civil and law enforcement agencies across the world. The multilateralization of our sanctions work follows the same trajectory as our FCPA history, which grew from a largely unilateral effort by the United States to a worldwide movement to combat international corruption.

From Spain to Fiji, we have relied on local counterparts in our early successes against Russian sanctions evasion, and we will continue to need similar partnerships. The Attorney General and I frequently speak with counterparts in partner countries about our collective work on sanctions, including with our friends in the United Kingdom.

In addition to our own KleptoCapture task force, the department is working cooperatively with our international partners through the multilateral Russian Elites, Proxies, and Oligarchs (REPO) Task Force — an international collaboration between the United States and European Union to cooperate at an unprecedented level on multilateral sanctions enforcement to isolate international actors undermining the world’s security, stability and international norms. Such partnerships are sure to continue and expand.

The multilateral growth in FCPA and sanctions enforcement has also allowed us to go after those who profit from corruption and crime around the world — whether they are sanctions-evading oligarchs or office-holding bribe recipients. Working with our partners, we can ensure that corrupt regimes will be held responsible — whether we’re seizing yachts or freezing slush funds.

Finally, we aim for our sanctions enforcement to incentivize companies to come forward and voluntarily disclose discovered misconduct. As with the FCPA, the department — through the National Security Division I had the privilege to lead earlier in my career — has a self-disclosure program to address potential criminal sanctions violations. We drew on the model from the FCPA with this self-disclosure program and since the relevant NSD guidelines were revised in 2019, the number of voluntary self-disclosures is increasing.

The National Security Division continues to refine the program, and last year the department had its first resolution under its Voluntary Self-Disclosure program. That resolution — involving SAP — rewarded the company for its self-disclosure and cooperation with no fine and only disgorgement of the revenue the company earned. Contrast the form of that resolution to the four recent corporate guilty pleas over the last month or so, which carried collective criminal penalties of nearly $7 billion. The math is simple: self-disclosure can save a company hundreds of millions of dollars.

For any company that thinks it may have a sanctions problem, I have a clear, unequivocal message for you: pick up the phone and call us. Do not wait for us to call you.

In closing, you can expect to see more action in sanctions enforcement, both by the U.S and by our international partners. And I hope and expect to see a new level of sophistication and resource commitment to sanctions compliance at companies across the globe. Thank you for having me today.

Source: United States Department of Justice News

Orlando, Florida – U.S. District Judge Carlos E. Mendoza has sentenced Luis Raul Perez Rodriguez (50, Orlando) to 10 years in federal prison for conspiracy to distribute cocaine. Perez Rodriguez had pleaded guilty on March 28, 2022.  

According to court documents, on January 21, 2022, Perez Rodriguez had arranged to receive a shipment of three parcels containing 19 kilograms of cocaine, valued at an estimated $570,000, through a delivery service from an address in Puerto Rico to an apartment in Orlando. On January 19, 2022, security specialists at the delivery service company detected the cocaine shipment and reported the parcels to the Drug Enforcement Administration. On January 21, 2022, an undercover officer, working with the DEA posed as a delivery driver and delivered a fake package to the address listed on the shipment. Perez Rodriguez was in the parking lot of his apartment and identified himself with the fake name associated with the parcels and showed the delivery driver that he was tracking the progress of the shipment on his phone. Perez Rodriguez was apprehended as the driver loaded two of the three packages into Perez Rodriguez’s vehicle. Additional evidence linked Perez Rodriguez to seven suspected kilogram-quantity shipments of cocaine from Puerto Rico to Orlando that were delivered as early as 2018.    

This case was investigated by the Drug Enforcement Administration with assistance from the Orange County Sheriff’s Office and the U.S. Postal Inspection Service. It was prosecuted by Assistant United States Attorney Dana E. Hill.

Source: United States Department of Justice News

Vanessa Roberts Avery, United States Attorney for the District of Connecticut, today announced that MICHAEL JONES, 25, of Hartford, pleaded guilty yesterday before U.S. District Judge Stefan R. Underhill in Bridgeport to unlawful possession of a firearm by a felon.

According to court documents and statements made in court, on July 24, 2021, Jones pointed a firearm at another individual outside of a hookah lounge on Broad Street in Manchester.  When Manchester Police arrived on the scene, Jones attempted to flee and discarded the firearm in the rear parking lot of the lounge.  Jones was apprehended and the firearm, a loaded Taurus G2C 9mm pistol with an obliterated serial number, was recovered.

Prior to July 2021, Jones was convicted in state court of criminal possession of a firearm.  It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.

Judge Underhill scheduled sentencing for September 7, at which time Jones faces a maximum term of imprisonment of 10 years.  Jones has been detained since his arrest.

This matter has been investigated by the Federal Bureau of Investigation’s Connecticut Violent Crime Task Force, Bureau of Alcohol, Tobacco, Firearms, and Explosives, and Manchester Police Department.  This case is being prosecuted by Assistant U.S. Attorney Stephanie T. Levick and John T. Pierpont, Jr.

This case is part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

Source: United States Department of Justice Criminal Division

Ransomware has become a global problem that requires cooperation on a worldwide level. Judicial experts and practitioners from the United States and the European Union participated in a two-day workshop in The Hague organized by the U.S. Department of Justice and Eurojust. The event aimed to share best practices and enhance collaboration in confronting ransomware attacks.

The event was opened by Eurojust President Ladislav Hamran and Assistant Attorney General Kenneth A. Polite, Jr. of the U.S. Department of Justice’s Criminal Division.

Assistant Attorney General Polite said: “Only by working together with key law enforcement and prosecutorial partners in the EU can we effectively combat the threat that ransomware poses to our society. I am confident that the U.S.-EU ransomware workshop will spur greater coordination and collaboration to address the ransomware threat.”

Eurojust President Hamran said: “There is no doubt that the scale, sophistication and impact of ransomware attacks is significant, affecting all sectors of the economy and society at large. We warmly welcome the opportunity to join forces with our U.S. colleagues in combating this form of crime. Through this week’s workshop, we are fostering closer cooperation not only between national authorities, but also between the public and the private sector. I am convinced that this will prove to be crucial in our efforts to protect our citizens against online and offline threats.”

The workshop, organized by the U.S. Department of Justice and Eurojust, brought together more than 100 prosecutors, law enforcement representatives and experts from the private sector and nongovernmental organizations, representing 27 countries. It took place on June 15 and 16 at Eurojust’s premises and online.

Participants attended a series of presentations and panel discussions on topics such as transnational cooperation on ransomware investigations, victim remediation, and prosecution of criminal organizations. 

Attorneys from the Justice Department’s Computer Crime and Intellectual Property Section (CCIPS), representatives from the FBI, the U.S. Secret Service, the U.S. Homeland Security Investigations (HSI), European Judicial Cybercrime Network, Eurojust’s Cybercrime Team and Europol’s European Cybercrime Centre shared their experiences, best practices, and lessons learned in directing an investigation to a successful outcome including collaborating with the tech and private sector. Law enforcement officers also discussed adversaries’ tactics and the latest investigative techniques. 

Prosecutors additionally discussed relevant changes in the law, including issues related to electronic evidence, charging options, and cross-border considerations.  Private sector and nongovernmental organization representatives included the CyberPeace institute, Microsoft and Bitdefender.

A recording of the opening remarks is available on the Eurojust YouTube channel at https://youtu.be/cQLTg0x5fhI for Assistant Attorney General Polite and https://youtu.be/3bfUvl4rZmc for Eurojust President Hamran.

Learn more about the Criminal Division’s International Computer Hacking and Intellectual Property (ICHIP) Program, jointly administered by the Criminal Division’s Office of Overseas Prosecutorial Development, Assistance and Training and CCIPS, here.