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THE LATEST ON GOVERNMENT INQUIRIES AND ENFORCEMENT ACTIONS

Government Investigations and White Collar Litigation Group

McGuireWoods LLP

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DOJ Announces “Pilot Program Regarding Compensation Incentives and Clawbacks” with Significant Ramifications for Corporations Facing Criminal Investigations

By John S. Moran, Brandon M. Santos, Casey Erin Lucier, Jeffrey M. Hanna, Caroline Schmidt Burton, Alex Scandroli and McGuireWoods LLP on Enforcement and Prosecution Policy and Trends
The Department of Justice Criminal Division announced a “Pilot Program Regarding Compensation Incentives and Clawbacks” (the “Program”) this week with broad implications for corporations and their individual executives operating within the Department’s jurisdiction. During two keynote speeches delivered at the American Bar Association’s National Institute on White Collar Crime, Deputy Attorney General Lisa Monaco (remarks… Continue Reading

Supreme Court to Determine Whether False Claims Act Liability Is Precluded Where Defendants Proffer an Objectively Reasonable Interpretation of an Ambiguous Legal Requirement

By Michael J. Podberesky, Michael Francisco, Brett Barnett, Timothy J. Whittle and McGuireWoods LLP on Fraud, Deception and False Claims
On January 13, 2023, the Supreme Court granted a writ of certiorari to petitioners in two False Claims Act cases to determine whether the False Claims Act’s knowledge requirement reaches defendants who can offer an “objectively reasonable” interpretation of an ambiguous legal or contractual requirement material to government payment. The Court’s decision will likely be… Continue Reading

SEC Issues Risk Alert on Reg BI Deficiencies Identified During Exams

By John Ayanian, Cheryl Haas, Emily P. Gordy and McGuireWoods LLP on Compliance, Securities and Commodities
On Jan. 30, the U.S. Securities and Exchange Commission’s Division of Examinations released a Risk Alert identifying perceived weaknesses in broker-dealers’ compliance with the disclosure, care, conflicts of interest and compliance obligations of Regulation Best Interest. Read on for highlights from the alert and how they reflect the SEC’s evolving expectations during examinations… Continue Reading

At Long Last, FinCEN Issues Beneficial Ownership Information Reporting Rule

By Matthew Orso, Jeffrey M. Hanna and McGuireWoods LLP on Financial Institution Regulation
At long last, the Financial Crimes Enforcement Network (“FinCEN”) issued a final rule establishing a beneficial ownership information reporting requirement for corporations and companies both large and small. In its announcement earlier today, FinCEN explained that the rule will require most companies and corporations registered to do business in the United States to report information about their… Continue Reading

SEC Speaks 2022: Ongoing Efforts to Restore Public Trust, Aggressive Enforcement Agenda

By E. Andrew Southerling, Louis D. Greenstein, Vinu G. Joseph, Timothy J. Whittle and McGuireWoods LLP on Enforcement and Prosecution Policy and Trends, Securities and Commodities
Securities and Exchange Commission officials highlighted a commitment to restoring trust in the agency and aggressive enforcement during the recent SEC Speaks conference. See our alert for analysis of their comments and stated enforcement priorities, which addressed crypto markets, aggressive use of remedies, creditworthy cooperation, the Wells process, aggressive litigation, disgorgement efforts, municipal securities, gatekeeper… Continue Reading

Proposed Federal Rule Signals Remote Form I-9 Inspection of Employee Documents Will Likely Become Permanent Option

By McGuireWoods LLP, Jacquelyn Stone, Matthew Orso, Alex J. Brackett and Noriya Shahadat on Immigration and Worksite Enforcement
On August 18, 2022, the Department of Homeland Security (DHS) published a Proposed Rule titled Optional Alternatives to the Physical Document Examination Associated With Employment Eligibility Verification (Form I-9). The Proposed Rule would formalize the authority of the Secretary of Homeland Security to extend certain COVID-19 rules permitting remote inspection of employee documents presented for… Continue Reading

Pharmaceutical Manufacturer Agrees to $900 Million Dollar False Claims Act Settlement to Resolve Kickback Claims

By Michael J. Podberesky, Samuel C. Bernstein, James E. Lego and McGuireWoods LLP on Fraud, Deception and False Claims
On July 20th, on the eve of trial, Biogen Inc. agreed to pay $900 million dollars to settle claims that the company violated the False Claims Act (FCA) by allegedly paying improper consulting and speaker fees and providing lavish meals and entertainment (in violation of the Federal Anti-Kickback Statute (AKS)) to medical providers to induce… Continue Reading

DOJ and Aerojet Settle for $9 Million in Qui Tam Cybersecurity False Claims Act Case

By Edwin O. Childs, Todd R. Steggerda, Abram J. Pafford, Andrew Konia, Jason M. Vespoli, Timothy J. Whittle and McGuireWoods LLP on Fraud, Deception and False Claims, Government Contracts
On July 8, 2022, the U.S. Department of Justice announced a $9 million settlement with federal government contractor Aerojet Rocketdyne, Inc. for alleged violations of the False Claims Act in a case pending in the Eastern District of California. The settlement results from alleged false statements by Aerojet related to compliance with Department of Defense… Continue Reading

Court Holds U.S. Wire Fraud Statute Reaches Foreign Defendant’s Conduct

By John Adams, Elissa Baur and McGuireWoods LLP on Fraud, Deception and False Claims
The federal wire fraud statute has a far-reaching scope, allowing prosecutors to go after conduct as varied as investor fraud to college admissions scandals. In late June, the Fourth Circuit U.S. Court of Appeals arguably broadened that scope even further by affirming a wire fraud conviction for a defendant who devised the scheme from Israel.… Continue Reading

DOJ’s Public Struggles with Electronic Evidence Highlights the Need for Counsel to Formally Demand Discovery Early and Often

By V. Kathleen Dougherty and McGuireWoods LLP on Enforcement and Prosecution Policy and Trends, Miscellaneous
DOJ’s dismissal last week of a Foreign Corrupt Practices Act case in Boston is the latest in a string of bad outcomes for the government due to discovery mishaps. While the government works to revise its discovery policies and seek resources to collect, review, and analyze the vast amount of electronic evidence attendant to nearly… Continue Reading

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

By Benjamin A. O'Neil, Alex J. Brackett, Elissa Baur and McGuireWoods LLP on Anti-Bribery and Corruption
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… Continue Reading

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

By Edwin O. Childs, Michael J. Podberesky, Todd R. Steggerda, Jason M. Vespoli and McGuireWoods LLP on Enforcement and Prosecution Policy and Trends, Government Contracts
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… Continue Reading

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

By Laura Colombell Marshall and McGuireWoods LLP on Fraud, Deception and False Claims
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… Continue Reading

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

By Alex J. Brackett, Matthew Orso, Laura Colombell Marshall and McGuireWoods LLP on Anti-Money Laundering, Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Sanctions, Trade Embargo, and Export Controls
RELATED UPDATES: FinCEN Alert Highlights Potential U.S. Commercial Real Estate Investments by Sanctioned Russian Elites and Their Proxies (January 30, 2023) 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… Continue Reading

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

By Brandon M. Santos, Paul T. Atkinson and McGuireWoods LLP on Enforcement and Prosecution Policy and Trends
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… Continue Reading

DOJ Settles First False Claims Act Enforcement Action Since Launch of Civil Cyber-Fraud Initiative

By Edwin O. Childs, Todd R. Steggerda, Laura Colombell Marshall, Charles Wm. McIntyre, Michael J. Podberesky, Andrew Konia, Jason M. Vespoli and McGuireWoods LLP on Fraud, Deception and False Claims
On March 8, 2022, the U.S. Department of Justice (DOJ) announced a $930,000 settlement with Comprehensive Health Services, LLC (CHS) for alleged violations of the False Claims Act (FCA). This settlement marks DOJ’s first resolution of an FCA enforcement action involving cyber fraud after launching its Civil Cyber-Fraud Initiative in October 2021, signaling DOJ’s eagerness to combat cybersecurity violations… Continue Reading

Pain Management or Pill Mill? Supreme Court to Weigh in on Standards for Prosecutions of Practitioners Prescribing Narcotics

By Brandon M. Santos, Paul T. Atkinson and McGuireWoods LLP on Enforcement and Prosecution Policy and Trends
Update: Pain Management or Pill Mill? Supreme Court Hears Arguments Regarding Standards for Prosecutions of Practitioners Prescribing Narcotics (March 11, 2022) Introduction Next week, the Supreme Court will hear oral argument in a pair of cases that may reshape the landscape of legitimate prescribing under the Controlled Substances Act (“CSA” or “the Act”). In companion… Continue Reading

EARN IT Act Opens Online Service Providers to Liability for Online Child Sexual Abuse Hosted on Their Platforms

By V. Kathleen Dougherty and McGuireWoods LLP on Enforcement and Prosecution Policy and Trends
On Thursday, February 10, 2022, the Senate Judiciary Committee approved the Eliminating Abusive and Rampant Neglect of Interactive Technologies Act (EARN IT Act), first introduced in 2020 by Sens. Lindsey Graham, R-SC, and Richard Blumenthal, D-Conn. The EARN IT Act aims to tackle the online proliferation of child sexual abuse material (CSAM) by paring back… Continue Reading

SEC Focus on Private Fund Advisers Continues With the Publication of EXAMS Risk Alert

By Cheryl Haas, Emily P. Gordy, Aline McCullough, Chelsey Dawson Klein and McGuireWoods LLP on Enforcement and Prosecution Policy and Trends, Securities and Commodities
On January 27, 2022, the Division of Examinations (“EXAMS”) of the U.S. Securities and Exchange Commission (“SEC”) published a Risk Alert with its Observations from Examinations of Private Fund Advisers. This Risk Alert is one of a series of signals of the SEC’s focus on private fund advisers under Chairman Gensler, including Form PF amendments… Continue Reading

FinCEN’s Proposed Foreign Affiliate SAR Sharing Program — Key Considerations

By Jeffrey M. Hanna and McGuireWoods LLP on Anti-Money Laundering
On January 25, 2022, the Financial Crimes Enforcement Network (“FinCEN”) solicited commentary regarding its proposed rule that would create a time-limited pilot program to expand the ability of financial institutions to share Suspicious Activity Reports (“SARs”) and SAR-related information.  (See 31 U.S.C. § 5318(g)(8)).  The proposed program would permit a financial institution with a SAR… Continue Reading

Elizabeth Holmes of Theranos Found Guilty of Making False Representations to Investors

By John Adams, Michael J. Podberesky, Caroline Schmidt Burton, Elissa Baur, Emily Erb Kelley and McGuireWoods LLP on Fraud, Deception and False Claims
Elizabeth Holmes, founder of Theranos, was convicted of three counts of wire fraud and one count of conspiracy to commit wire fraud. The verdict follows a high-profile, fifteen-week trial in federal court in San Francisco.  Holmes was alleged to have defrauded investors, medical professionals, patients, and the public by exaggerating and making false statements about… Continue Reading

CMMC 2.0: Department of Defense Revamps Cybersecurity Maturity Model Certification Program

By Edwin O. Childs, Abram J. Pafford, Todd R. Steggerda, Jason M. Vespoli and McGuireWoods LLP on Government Contracts
On November 4, 2021, the Department of Defense (DoD) announced significant changes to the strategic direction of the Cybersecurity Maturity Model Certification (CMMC) program.  Specifically, DoD stated that the goal of these changes is to simplify the CMMC standard and prioritize the protection of certain types of controlled defense information.  After a nine-month internal review by the… Continue Reading

SEC Advisory Fees Focus Continues as Reflected in Division of Examinations Risk Alert and Chair Gensler Comments

By Cheryl Haas, Emily P. Gordy, Aline McCullough and McGuireWoods LLP on Securities and Commodities
Recent comments from U.S. Securities and Exchange Commission (SEC) Chair Gensler at the Institutional Limited Partners Association Summit and an SEC Division of Examinations (EXAMS) Risk Alert published on the same day highlight the ongoing focus of the SEC on advisory fees, both in the institutional and retail spaces. In Chair Gensler’s remarks, he expressed… Continue Reading

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