Undercover investigative techniques, such as wiretaps, which have long been a staple in racketeering and narcotics investigations, are now being used by DOJ in white collar investigations. In a speech on November 4, 2010, Lanny Breuer, Assistant Attorney General of the DOJ’s Criminal Division, said that DOJ has “begun increasingly to rely, in white collar cases, on undercover investigative techniques that have perhaps have been more commonly associated with the investigation of organized and violent crime.” Brueur also noted that DOJ has strengthened the Office of Enforcement Operations, which reviews and approves all wiretaps, and as a result the number of wiretaps authorized – in all cases – “has gone up.”
DOJ has already used wiretaps and other undercover investigative techniques in several recent white collar investigations. In January 2010, for example, 22 individuals were indicted for FCPA violations. The indictments followed what Brueur described as the DOJ’s “most extensive use of undercover law enforcement techniques in an FCPA investigation.” Wiretaps were also used in the insider trading cases against Raj Rajaratnam.
These “new” techniques in white collar investigations mean that DOJ is relying tools other than those traditionally associated with white collar cases, such as voluntary disclosures or whistle blowers. Companies should take notice that DOJ has “stepped up [its] white collar investigations and prosecutions.” Indeed, according to a recent OECD report (link to from prior post), DOJ stated voluntary disclosures of FCPA violations are a “source of a significant proportion of investigations, but not the majority.”
With DOJ’s intention to be more proactive in white collar investigations, and the tools available to it, companies should be one step ahead of potential investigations by having a robust and effective compliance program. Not only will an effective compliance program both deter and detect illegal conduct, prosecutors consider the effectiveness of compliance programs in making charging decisions and a court’s determination of an appropriate sentence.