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THE LATEST ON GOVERNMENT INQUIRIES AND ENFORCEMENT ACTIONS

Government Investigations and White Collar Litigation Group
Financial Institution Regulation

CFPB’s New Interest in Examining Fintechs is Likely to Mean More Naming and Shaming by the Agency

On April 25, 2022, the Consumer Financial Protection Bureau (CFPB) announced that it will begin examining nonbank “covered persons” that it has determined pose risks to consumers. The CFPB has had this authority since its inception. The Dodd-Frank Act empowered the CFPB to examine this category of nonbanks, which might include fintech firms that are not otherwise subject to the CFPB’s supervision authority, such as social-media websites that offer payment-processing services to consumers. And in 2013, the CFPB adopted a rule for implementing its authority that requires the agency to follow certain procedures in determining whether a company poses risks to consumers.

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Anti-Bribery and Corruption

DOJ and SEC Kick Off the Second Quarter with Major FCPA Settlement with International Waste Management Company

On April 20, 2022, the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) separately announced that Stericycle Inc. (Stericycle), an international waste management company headquartered in Lake Forest, Illinois, has agreed to pay more than $84 million to resolve parallel investigations by authorities in the United States and Brazil. The investigation is related to the bribery of foreign officials across several countries in Latin America.

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Energy Enforcement

FERC’s New Infrastructure and Environmental Impacts Priority – What to Expect in Enforcement Cases

The Federal Energy Regulatory Commission (FERC) Office of Enforcement (OE) has historically focused on four “priorities,” as described in its annual Report on Enforcement. Those four priorities included (1) fraud and market manipulation; (2) serious violations of Reliability Standards; (3) anticompetitive conduct; and (4) conduct that threatens the transparency of regulated markets. In the 2021 Report on Enforcement, however, the OE included a new enforcement priority: “threats to the nation’s infrastructure and associated impacts on the environment and surrounding communities.”

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Enforcement and Prosecution Policy and Trends, Sanctions, Trade Embargo, and Export Controls

New Revelations in Ukraine Lead to Tightening Global Sanctions

As the world watched in horror over the atrocities occurring in the war zones of Ukraine this week, global leaders re-doubled their efforts to bring increasing sanctions pressure to bear on Russian industry, the Russian economy and the sphere of influence surrounding Russian President Vladimir Putin.  The U.S., UK and EU rolled out a series of new or newly-tightened sanctions measures over the course of the week, and signaled that more tools remain in the sanctions toolkit going forward.  DOJ also announced a number of enforcement actions initiated as part of “Task Force KleptoCapture,” including a criminal indictment against a Russian oligarch for attempting to evade previously imposed sanctions.

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Enforcement and Prosecution Policy and Trends, Government Contracts

Largest-Ever Small-Business Contracting Fraud Settlement Related to Pass-Through Subcontracting

Federal contractors should take note of a $48.5 million False Claims Act settlement between the Department of Justice and TriMark USA LLC — the largest-ever FCA settlement based on allegations of small-business set-aside contracting fraud. DOJ alleged that TriMark had a plan to circumvent specific small-business contracting requirements by providing significant assistance to three small companies — distributors and resellers for TriMark products — in obtaining set-aside contracts they would pass along to TriMark for performance.

Read on to learn why manufacturers, suppliers, developers and distributors that closely influence and control their distribution networks and reseller partners should take note of this settlement and ensure they have adequate compliance policies and procedures in place to avoid similar conduct allegations and repercussions.

Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Sanctions, Trade Embargo, and Export Controls

Western Companies Starting to Feel Impact of Russian Sanctions

RELATED UPDATE: New Revelations in Ukraine Lead to Tightening Global Sanctions (April 8, 2022)

As we approach the thirty day mark since the United States, and other Western countries began imposing a series of rigorous sanctions on the Russian economy and key components thereof, we are starting to see real evidence of their broad impact.  Unfortunately, that includes significant impacts that Western companies are being forced to bear.  In some cases, large multinationals that could arguably continue to operate in Russia or with Russian partners are voluntarily electing to walk away from the country, whether due to the complication involved in navigating a dynamic sanctions environment, ambiguity around beneficial ownership of high risk partners, reputational concerns, a calculation that it was the right thing to do, or all of the above. However, other Western companies less well-situated to simply walk away from Russian business entanglements are finding themselves left with little choice but to absorb millions of dollars in losses.

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Fraud, Deception and False Claims

DOJ Ramps up Resources and Renews Focus on Combatting COVID-19 Related Fraud in 2022

On March 10, 2022, the U.S. Department of Justice (DOJ) announced the appointment of Associate Deputy Attorney General Kevin Chambers to serve as the Director for DOJ’s COVID-19 Fraud Enforcement Task Force. In remarks delivered at the American Bar Association’s 37th National Institute on White Collar Crime earlier this month, U.S. Attorney General Merrick Garland announced that DOJ will be hiring 120 additional attorneys as “force multipliers” to combat pandemic-related fraud. These actions underscore President Biden’s recent statements in his State of the Union address earlier this month that he intends to bolster existing pandemic fraud efforts and target large-scale and transnational complex fraud schemes.

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Anti-Money Laundering, Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Sanctions, Trade Embargo, and Export Controls

FinCEN Encourages “Increased Vigilance” and Highlights Red Flags for Evasion of Russian Sanctions including Use of Virtual Currency

RELATED UPDATES:
New Revelations in Ukraine Lead to Tightening Global Sanctions (April 8, 2022)
Western Companies Starting to Feel Impact of Russian Sanctions (March 24, 2022)


The Financial Crimes Enforcement Network (FinCEN) has issued an alert encouraging all financial institutions to be “vigilant” against efforts by their customers to evade recent sanctions and other restrictions imposed by the United States on the Russian Federation in connection with its invasion of Ukraine.

In recent weeks, the United States has increased sanctions and export controls on the Russian economy as part of a coordinated effort with the European Union and United Kingdom. These include:

  • Sanctions against persons operating in the financial sector of the Russian Federation;
  • Prohibitions on correspondent or payable-through accounts and payment processing for certain Russian institutions;
  • Blocking of certain Russian financial institutions and other entities, including Russian elites and their families;
  • Prohibitions on dealing in new sovereign debt or new debt and equity issuances by certain Russian entities; and
  • Extensive limitations on Russia-related import and export activities.

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Enforcement and Prosecution Policy and Trends

Update: Pain Management or Pill Mill? Supreme Court Hears Arguments Regarding Standards for Prosecutions of Practitioners Prescribing Narcotics

Last week, the Supreme Court (Court) heard oral arguments in companion cases Ruan v. United States and Kahn v. United States, concerning the application of the Controlled Substances Act (“CSA” or “the Act”) to medical practitioners. Through these cases, the Court is expected to resolve a circuit split over the role of “good faith” as a defense for medical practitioners charged with unlawfully distributing narcotics under Section 841(a) of the Act (see our previous article about the issues before the Court and the different approaches to good faith taken by the circuit courts). While arguments did not offer a clear view into the direction the Court is headed, three points of friction emerged that may inform the Court’s decision.

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