Month: December 2024

Source: United States Department of Justice 2

Remarks as Prepared for Delivery

I’m honored to be here today on behalf of the Department of Justice.

The Department is committed to a three-part mission: to uphold the rule of law, protect civil rights, and keep our communities and nation safe.

Critical to every part of this mission is our corporate criminal enforcement work.

Today, I plan to share more about how our efforts to deter, disrupt, and prosecute corporate misconduct over the past four years represent a continuation of the Department’s longstanding and bipartisan effort to protect American consumers — and why I expect that effort will continue into the future.

*                                  *                                  *

The origins of corporate criminal enforcement in the United States date back to the industrial revolution when President Theodore Roosevelt called on Congress to adopt new laws to regulate growing corporate power and rein in corporate misconduct.

Over the decades, our nation has built on that legacy.

In the midst of the Great Depression, the Securities and Exchange Commission was founded to protect our nation’s markets, shareholders, and the general public.

A little more than 20 years later, in 1955, the Department of Justice launched the Fraud Section in the Criminal Division to investigate and prosecute sophisticated white-collar crimes, working hand in hand with the U.S. Attorney community.[1]

Over the years, as corporate crime has shifted — growing more sophisticated and harder to detect — more offices and agencies have joined this effort.

And with corporate crime in today’s world evolving faster than ever and cropping up in unexpected places, we must skate to where the puck is going, not where it’s been.

That said, the fundamental principles of corporate enforcement haven’t changed.

We must deter, disrupt, and punish corporate crime: first, by holding individuals and companies that engage in criminal misconduct accountable through prosecution — and second, by promoting corporate responsibility through consistent, transparent, and predictable enforcement policies that incentivize compliance with the law.

Over the past few years, we have maintained our commitment to those core principles of individual accountability and corporate responsibility, while modernizing our criminal enforcement program to meet the new challenges we face head on.

We’ve done this by building on many years of work at the Department of Justice and partner enforcement agencies across administrations — and by drawing on the expertise of those outside of government.

*                                  *                                  *

More than three years ago, in the Fall of 2021, Deputy Attorney General Lisa Monaco launched the Corporate Crime Advisory Group, or the CCAG — tasking a group of Department of Justice experts with a top-to-bottom review of our corporate enforcement efforts, seeking the best ideas from both inside and outside of government.

The CCAG convened civil society groups, criminal law experts, in-house counsel, and business leaders, among other stakeholders, to discuss what was working in corporate enforcement and what needed reform.

We heard from those most affected by DOJ’s corporate criminal enforcement policy — especially Department outsiders — and since then, we’ve put what we learned into action.

Emerging from this work:

• We’ve emphasized consistency, transparency, and predictability in our policies.
• We’ve doubled down on approaches that have proven successful over many years and across multiple administrations — approaches like voluntary self-disclosure policies and whistleblower programs.
• We’ve increased the consequences for bad actors — whether individual or corporate — while providing new incentives for good corporate citizenship and investments in compliance.
• And we’ve recalibrated and surged resources to address today’s corporate crime threats — and tomorrow’s.

In doing so, we’ve created a clear and transparent roadmap of the Department’s expectations so that every CEO, General Counsel, Board Member, and Chief Compliance Officer who’s navigating a fast-changing world and mitigating risk can stay on the right side of the law.

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Let me start with the balance of consequences and incentives — where we’ve increased punishment for bad actors while enhancing incentives for ethical corporate behavior.

It all starts with Job Number One: individual accountability.

Corporate crime hurts real people — and corporate crimes are committed by real people.

So DOJ’s top priority in corporate criminal enforcement is — and always has been — holding individuals accountable.

Accountability not only promotes fairness, it also drives deterrence.

We’ve empowered our prosecutors to focus on the worst offenders committing the biggest crimes, no matter how high they rank on the corporate org chart — and no matter how challenging and time-consuming the case.

Prosecuting the most important cases against the most sophisticated wrongdoers is resource intensive. It requires breaking down complex criminal schemes, understanding cutting-edge markets and technology, and analyzing terabytes of data.

So, we’ve re-tooled enforcement policies to promote swift individual prosecutions.

We’ve given good actors more avenues to help us go after the bad guys — through innovative whistleblower programs and consistent, transparent, and predictable voluntary self-disclosure policies.

And we’ve made clearer than ever before what we expect from companies cooperating with government investigations to accelerate investigations of wrongdoers.

This updated approach has generated real returns, with timely convictions of:

• The CEOs of the world’s two largest cryptocurrency platforms — FTX and Binance.
• The CEO and the COO of Theranos;
• The Founder and the CFO of Archegos;
• Two senior executives at Goldman Sachs; and
• Dozens of other high-ranking executives across a range of industries.

Some things simply do not change: prosecuting the most culpable individuals is not only the right thing to do, it also has the greatest deterrent impact — by changing behavior and preventing misconduct.

So, I want to be clear: Prosecution of individuals will always be the most powerful tool in DOJ’s arsenal.

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To increase accountability and deterrence, we’ve also clarified the rules of the road for corporate enforcement.

Looking across the Department, we observed a patchwork of approaches to key tools like whistleblowing, voluntary self-disclosure, and compensation clawbacks.

• In the past, when corporate misconduct was detected, the benefits of whistleblowing or self-reporting to DOJ were often opaque and unpredictable.
• The Department’s response seemed to depend on which office or even which prosecutor was assigned the case.
• Without written, public policies across most of the Department, whistleblowing or self-reporting could seem like a roll of the dice without a sense for the odds.
• So over the past few years, we’ve moved methodically to draw on what works, and then make the rules of the road more consistent, transparent, and predictable.

Take voluntary self-disclosure policies — which have been utilized effectively by the Antitrust and Criminal Divisions for years, through both Republican and Democratic administrations.

• For example, in 2016, the Criminal Division piloted a voluntary self-disclosure program for FCPA cases under the leadership of AAG Leslie Caldwell – then expanded it to other Criminal Division cases outside the FCPA context under the leadership of AAG Brian Benczkowski in the first Trump Administration.
• It’s a program that works — so we’ve made it more consistent, more transparent, and more predictable.
• And now for the first time as of March 2023, every DOJ component has a published Voluntary Self-Disclosure policy that sets forth exactly what a company needs to do to self-report misconduct — and what a company can expect if they do so.

Whistleblower programs have a similar track record of success, across decades and under administrations of both parties.

• According to Jay Clayton, who served as SEC Chair during the first Trump Administration and has been identified as a nominee for U.S. Attorney in the Southern District of New York in the next one, the SEC’s successful whistleblower program “stopped frauds and prevented losses for countless investors.”[3]
• Like VSDs, whistleblower programs work. So now, for the first time as of August 2024, DOJ has instituted a Department-led whistleblower program with clear incentives for dropping a dime on corporate crime.

As for clawback programs, the bipartisan Sarbanes-Oxley Act, signed into law by President George W. Bush, contains clawback provisions that have been enforced by the SEC in Republican and Democratic administrations alike.

• And now, for the first time, companies that claw back compensation from executives involved in wrongdoing can reduce DOJ penalties by the amount of those clawbacks, providing new incentives to make wrongdoers — not innocent shareholders — pay the price.
• And incentive compensation systems are now assessed and upgraded as part of every Criminal Division resolution, because compensation systems can either promote compliance or reward risky — sometimes criminal — behavior.

Today, both individuals and companies know when, where, and how to “do the right thing,” to borrow a phrase from my fellow Brooklynite Spike Lee.

We’ve also broadened the gap between the benefits an ethical company can access and the penalties a compliance-flouting company faces.

Investing in compliance and practicing good corporate citizenship should be basic arithmetic — not some complex calculus problem with too many unknown variables to solve.

As Deputy Attorney General Lisa Monaco put it in connection with the ground-breaking prosecution of TD Bank just last month: “If the business case for compliance wasn’t clear before — it should be now.”[4]

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Let me take a few minutes to delve deeper into DOJ’s whistleblowing and voluntary self-disclosure efforts.

First, whistleblowing. We know it works.

Whistleblower reports to the government lead to prosecutions and civil enforcement actions. Internal reports help companies address misconduct before it gets out of hand.

And support for whistleblowing is non-partisan.                          

Senator Charles Grassley, the Republican expected to Chair the Senate Judiciary Committee in the upcoming Congress, and Democratic Senator Elizabeth Warren don’t agree on much — but they do agree that “whistleblower incentive programs are powerful tools to prevent, detect, and prosecute criminal misconduct, wrongdoing, and fraud.”

We’ve historically had a strong network of whistleblower reporting opportunities through agencies like the SEC and CFTC — but we noticed gaps in key places, leaving potential whistleblowers without a clear reporting path or a clear reason to blow the whistle.

So, this year, DOJ launched a two-part whistleblower program — with different rules and incentives for whistleblowers not involved in the criminal activity they’re reporting and for those who were.

For whistleblowers not involved in the reported misconduct, Deputy Attorney General Monaco launched the first-ever DOJ whistleblower awards program — aimed at building on the successful programs at the SEC and CFTC.

• The awards program is based on a simple premise: if an individual helps DOJ discover corporate misconduct — otherwise unknown to us — then that person would qualify to receive a percentage of the resulting forfeiture.
• This program not only incentivizes individuals to step forward, it puts pressure on companies to do the same — because a company can still qualify for voluntary self-disclosure credit if it reports the conduct to the DOJ within 120 days of the whistleblower report to the company.

By its very terms, this awards program doesn’t apply to individuals who were meaningfully involved in the criminal conduct itself.

For that, we’ve launched whistleblower non-prosecution pilots in the Criminal Division and many of our most active U.S. Attorneys’ Offices.

• Those offices are offering non-prosecution agreements to certain individuals involved in misconduct who report previously undiscovered wrongdoing.
• In the same way a company could qualify for a declination for self-disclosing, individuals with knowledge of misconduct can do the same — by stepping up, owning up, and helping us prosecute the most serious wrongdoers.

Now, our whistleblower programs don’t exist in a vacuum.

Rather, they fill in the gaps and build on effective existing models employed in SEC, CFTC, FinCEN and False Claims Act cases.

Instead of starting from scratch, our DOJ whistleblower awards program used those existing programs as inspiration and models to emulate — and we’ve now expanded whistleblower awards to the reporting of crimes that were not previously covered.

The program also fits seamlessly with the newly clear, transparent, and cross-Department approach to voluntary self-disclosures by companies, instituted at DAG Monaco’s direction.

• Voluntary self-disclosures (VSD) drive successful criminal prosecutions of culpable individuals. They speed money back to victims and disgorge ill-gotten gains. They bring misconduct to a halt and tighten compliance programs with added government oversight.
• So, where a company voluntarily self-discloses misconduct previously unknown to the Department — absent aggravating circumstances and with full cooperation, remediation, disgorgement, and victim restitution — it can avoid a guilty plea or indictment.
• And such a voluntary self-disclosure to the Criminal Division can also qualify a company for the presumption of a declination of prosecution.

Early signs indicate these new VSD and whistleblower programs are yielding significant results.

• Corporate voluntary self-disclosures to the Criminal Division are increasing every year, with more than twice as many last year as compared to 2021.
• In the first few months of DOJ’s whistleblower awards program, we’ve already received more than 250 tips, many of which appear to identify criminal conduct we didn’t know about.
• And U.S. Attorneys’ Offices report that individual voluntary self-disclosures have resulted in promising ongoing investigations.

Notably, the programs complement each other, setting up a virtuous cycle.

As the DAG has said, “when everybody wants to be first in the door, no one wants to be second” — regardless of whether you’re an innocent whistleblower, a potential defendant looking to minimize criminal exposure, or an audit committee chair at a company where the misconduct took place.[6]

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Our approach also involves increasing punishment for companies that are repeat bad actors or who flout compliance.

Calibrating a successful program of incentives and consequences requires increasing the penalties for corporations that aren’t getting the message.

And we’ve moved out on that as well.

Egregious corporate conduct demands a stiff punitive response.

• So multinational companies like LaFarge, TD Bank, and Binance have pleaded guilty to egregious crimes involving material support for terrorism, money laundering conspiracy, and sanctions violations, respectively — with combined penalties of almost $7 billion.

Penalties also are levied to deter future misconduct. So when a company breaks the law a second time or violates the terms of a prior resolution, we’ve made sure they pay a far steeper price.

• Powerful companies like Ericsson have experienced that approach in action — pleading guilty to charges that stemmed from violation of a deferred prosecution agreement.

Today’s corporate enforcement program at DOJ means clearer and more transparent policies; predictable benefits for whistleblowers and incentives for companies that voluntarily self-disclose; and a far bigger gulf between the criminal outcomes for good and bad actors.

All of it adds up to a clear business case for investing early and often in compliance.

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I also want to highlight our surge of resources to address the dramatic expansion of corporate crime risks related to national security and emerging technology.

In returning to government some two and a half years ago, I was struck by how often our corporate criminal investigations now implicate the country’s national security interests.

The crimes vary — from sanctions violations to money laundering to material support for terrorism.

The corporate defendants range across industry — from construction and shipping to agriculture and telecommunications.

And the national security risks run the gamut — from money laundering for Russian interests to trafficking in Iranian crude oil to sanctions evasion to support the North Korean nuclear program.

To meet the moment, the Department has increased resources to address the challenge.

• We’ve surged prosecutors into the Criminal Division’s Bank Integrity Unit, which prosecutes violations of the Bank Secrecy Act and money laundering— including October’s groundbreaking conviction of TD Bank.
• We’ve added more than 25 white collar prosecutors and a Chief Counsel for Corporate Enforcement to our National Security Division to inject energy and expertise in corporate enforcement.
• We’ve launched extraordinarily successful enforcement initiatives, involving Main Justice components, U.S. Attorneys’ Offices, and partner law enforcement agencies, to address particularly dangerous national security threats:
  • Initiatives like Task Force KleptoCapture, which has brought criminal charges against more than 100 individuals and entities who violated Russia-related sanctions or export controls – and seized, restrained, or obtained forfeiture orders against about $650 million in assets.
  • And efforts like the Disruptive Technology Strike Force, which is laser focused on keeping the most sensitive technologies out of the world’s most dangerous hands, charging over two dozen complex and high-impact cases since its launch last year.

Simply put, national security risks are expanding and accelerating.

And they’re being supercharged by emerging technologies like artificial intelligence.

Now you might ask: what should companies and their lawyers be doing today to prepare for tomorrow?

As you may know, we recently updated the Criminal Division’s guidance on evaluating corporate compliance programs — known as the ECCP — in part to ensure that companies are focused on mitigating risks associated with the use and misuse of AI and other emerging technologies.

Now, the ECCP doesn’t tell companies how to design and implement their compliance programs. Instead, the guidance poses questions that companies should be asking themselves throughout the compliance program life cycle – from design to execution.

And overall, DOJ’s updated corporate criminal enforcement program places a particular premium on certain questions that executives and board members need to be asking:

• Have we empowered our compliance leaders and invested sufficiently in our compliance program, given our risk profile and today’s geopolitical landscape?
• Do we have effective internal detection and reporting systems and robust internal investigative capabilities — so we can avail ourselves of voluntary self-disclosure opportunities?
• Have we designed compensation systems that promote compliance and enable clawbacks or escrowing of incentive comp?
• Have we assessed risks associated with national security and emerging technologies and taken appropriate steps to mitigate them?

If a company finds itself on the wrong side of a DOJ investigation tomorrow, the company’s posture may well depend on how its leadership answers those questions today.

*                                  *                                  *

I want to close with one final point.

Over the past four years, we’ve done a lot — but we haven’t reinvented the wheel.

We’ve just made it spin faster and straighter — all with the goal of creating a cumulative effect, and a set of desired outcomes that I think we can all agree are critically important:

• Early detection, deterrence, and identification and reporting of corporate misconduct to enable individual prosecutions;
• Increased investment in compliance;
• Focused attention on ethical corporate behavior;
• Enhanced defenses against emerging national security and AI-related threats; and
• Ultimately, promotion of good corporate citizenship.

While we can’t predict what will happen next or how the world will continue to shift, I am confident that the Department of Justice’s efforts to fight corporate crime will continue — the American people deserve nothing less.

Thank you again for welcoming me here today.

Source: United States Department of Justice Criminal Division

Okechuckwu Valentine Osuji, 39, a Nigerian national, was sentenced yesterday in New Haven, Connecticut, to eight years in prison for operating a business email compromise scheme out of multiple countries, including the United States.

According to court documents and statements made in court, Osuji and his co-conspirators targeted specific individuals and businesses by masquerading as trustworthy entities in electronic communications to obtain money. They used witting and unwitting “money mules” to receive fraud proceeds in their bank accounts and then either transferred those funds from the money mule accounts to accounts under the co-conspirators’ control or converted the stolen proceeds to cash for further transfer. Over the years-long operation of the scheme, numerous victims were tricked into transferring funds into bank accounts the victims believed were under the control of legitimate recipients as part of normal business operations. In reality, the bank accounts were controlled by Osuji and his co-conspirators. The victims included a Connecticut-based financial company, a Colorado-based lending company, an Alaska-based nonprofit performing arts organization, a New York-based food and beverage company, and many others.

The scheme also involved the exploitation of elderly individuals through romance scams to serve as some of the unwitting money mules, including one woman who testified at trial that she was duped into sending her own personal savings and income, including Social Security checks, to an individual she believed to be her romantic partner, but who was in fact one of Osuji’s co-conspirators. The scam resulted in the near-total depletion of her life savings, caused her to declare bankruptcy, and led to the repossession of her house. Her personal bank account was also used to facilitate the fraud against one of the companies targeted by Osuji.

Osuji was arrested in Malaysia and extradited to the United States in 2022. On May 1, 2024, a jury in New Haven found Osuji guilty of conspiracy to commit wire fraud, wire fraud, and aggravated identity theft. As a result of the scheme, losses and intended losses totaled over $6 million. At his sentencing hearing, Osuji was ordered to pay restitution to his victims.

Osuji’s alleged co-conspirator, John Wamuigah, remains in Malaysia and is pending extradition proceedings. An indictment is merely an allegation, and Wamuigah is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Another co-conspirator, Tolulope Bodunde, also a citizen of Nigeria, pleaded guilty and was sentenced on Oct. 16 to two years in prison.

Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; U.S. Attorney Vanessa Roberts Avery for the District of Connecticut; and Special Agent in Charge Robert Fuller of the FBI New Haven Field Office made the announcement.

The FBI New Haven Field Office and the Stamford Police Department investigated the case. The Justice Department’s Office of International Affairs, Royal Malaysia Police, and Malaysian Attorney General’s Chambers provided valuable assistance in securing the arrest and extradition of Osuji.

Trial Attorney Lydia Lichlyter of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Neeraj N. Patel for the District of Connecticut are prosecuting the case.

To learn more about business email compromise scams, please visit www.fbi.gov/how-we-can-help-you/scams-and-safety/common-scams-and-crimes/business-email-compromise and www.ic3.gov/CrimeInfo/BEC. 

Source: United States Department of Justice Criminal Division

**Deadline Extended to Friday, December 13, 2024**

The Department of Justice, Office of Information Policy (OIP) is pleased to announce that nominations are open for the 2025 Sunshine Week FOIA Awards, recognizing the contributions of FOIA professionals from around the government.  As the Attorney General recognized in his FOIA Guidelines issued in March 2022, “[t]he federal government could not process the hundreds of thousands of FOIA requests that are received every year without its dedicated FOIA professionals.”  Agency FOIA professionals are at the center of ensuring successful FOIA administration and we look forward to celebrating the work of these individuals from around the government.  For this year’s event, OIP is seeking nominations for five categories of awards:

• Exceptional Service by a FOIA Professional or Team of FOIA Professionals
• Outstanding Contributions by a New Employee
• Exceptional Advancements in IT to Improve the Agency’s FOIA Administration
• Exceptional Advancements in Proactive Disclosure of Information
• Lifetime Service Award

Nominations can be submitted by agencies or by a member of the public.  All nominations are now due to OIP by Friday, December 13.

Awardees will be recognized during the Department’s 2025 Sunshine Week event on March 17th.

Submission Guidelines

All agency personnel are eligible for the awards listed below. These personnel can include Government Information Specialists, supervisors, FOIA attorneys, FOIA administrative specialists, or other staff at the agency that meet the award category criteria.

We invite nominations for these awards from agencies as well as members of the public. Agency submissions should be made by the agency’s principal FOIA contact or Chief FOIA Officer.

Nominations must include:

• The full name, title, agency (or organization if applicable), and contact information for the person submitting the nomination,
• The name(s) of the individual(s) they are nominating,
• The award category that best reflects the nominee(s)’ accomplishments,
• A summary, not to exceed two single-spaced pages, that describes the nominee’s or group’s accomplishments, why the individual or group should receive the award, what they have done that sets them apart, and how their actions benefited FOIA administration, and
• A short abstract (100 words or less) that briefly outlines the nominee’s accomplishments.

Nominations must be submitted to DOJ.OIP.FOIA@usdoj.gov with the subject line “2025 Sunshine Week FOIA Award Nomination” by December 13, 2024.

Award Categories

Award for Exceptional Service by a FOIA Professional or Team of FOIA Professionals

• Recognizing exemplary performance by a FOIA professional or team of FOIA professionals in carrying out the agency’s administration of the FOIA. This award recognizes those individuals or teams whose exceptional contributions have significantly benefited FOIA administration. These benefits could include increased efficiency, greater use of technology, reduced backlogs, improved timeliness, and increased proactive disclosures.

Award for Outstanding Contributions by a New Employee

• Recognizing exceptional performance and notable contributions in carrying out the agency’s FOIA responsibilities by a new employee with fewer than three years of work in FOIA.

Exceptional Advancements in IT to Improve the Agency’s FOIA Administration

• Recognizing exceptional achievements in making greater use of technology to make information more accessible.  These efforts could include the implementation of new and advanced technologies to increase efficiencies as well as to improve proactive disclosures and the online availability of information.

Exceptional Advancements in Proactive Disclosure of Information

• Recognizing exceptional achievements by an agency or team of professionals at the agency to proactively make more information available online.  These efforts can include both the posting of more information online and steps taken to make that information more useful to the public.

Lifetime Service Award

• Recognizing an agency FOIA professional with at least 20 years of work in FOIA administration who has demonstrated high standards of excellence and dedication in the administration of the FOIA throughout their career.