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Category Archives: Fraud, Deception and False Claims

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Fraud, Deception and False Claims, Securities and Commodities

Responses Matter: Securities Fraud Sentence Shows the Value of a Sound Response to a Government Investigation

It’s an old lesson in government investigations, but one worth repeating. Conduct during an investigation can matter as much as the conduct under investigation – sometimes even more. High-profile prosecutions of the past have shown the severe consequences of mistakes in responding to government investigations. Martha Stewart went to prison not for insider trading but… Continue Reading
Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims

DOJ Indictment Highlights Methods Utilized by State Sponsored Cybercriminal Organization to Attack Major Industry and Government Entities

For the third time in less than a month, the United States Department of Justice (DOJ) announced a major enforcement action against an international cybercriminal organization that infiltrated public and private computer networks, fundamentally compromised these systems, and sought to obtain over a billion dollars from this illicit access. This past week’s indictment, which was… Continue Reading
Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims

Analysis of the DOJ’s 2020 FCA Statistics and the Trends Therein

The U.S. Department of Justice (DOJ) recently issued its annual press release summarizing fraud-related recoveries from False Claims Act (FCA) matters in the prior fiscal year. While the headline number for FY 2020 of $2.2 billion in settlements and judgments involving fraud and false claims against the government is down about $900 million from the… Continue Reading
Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims

DOJ Accelerates Enforcement Efforts Against Cybercriminals Who Engage in Ransomware Attacks

On successive days last week, the Department of Justice (DOJ) unveiled enforcement actions against international cybercriminal organizations that utilized ransomware to infect computer systems and then extort payment, often in the form of cryptocurrency, from victims worldwide.  First, the Criminal Division’s Computer Crime and Intellectual Property Section and the U.S. Attorney’s Office for the Middle… Continue Reading
Fraud, Deception and False Claims, Uncategorized

With Fraud Against UK Businesses at Epidemic Levels, Businesses Need to Know How to Protect Themselves

Fraud has reached epidemic levels in the UK and should be seen as a national security issue, says think tank the Royal United Services Institute (RUSI) in a paper published last week[1]. It is the crime to which UK citizens are most likely to fall victim[2]. Its impact on the private sector has consequences for… Continue Reading
Fraud, Deception and False Claims

Supreme Court to Resolve CFAA Circuit Split

Following an FBI sting, police sergeant Nathan Van Buren was convicted under the federal Computer Fraud and Abuse Act (“CFAA”) for selling license plate information obtained from a police database. The Eleventh Circuit upheld his conviction. In April, the Supreme Court granted certiorari in Van Buren v. United States, No. 19-783, to address a circuit… Continue Reading
Anti-Money Laundering, Financial Institution Regulation, Fraud, Deception and False Claims

FinCEN Issues Statement to Financial Institutions on BSA/AML Compliance During COVID-19 Pandemic

The Financial Crimes Enforcement Network (FinCEN) released a statement to financial institutions on March 16, 2020, concerning the COVID-19 pandemic. The statement covered two main topics: Potential delays by financial institutions in filing required Bank Secrecy Act (BSA) reports Remaining alert to identify malicious or fraudulent transactions, which often arise during natural disasters First, FinCEN… Continue Reading
Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims

Key Lessons for Colleges and Universities from Operation Varsity Blues

On March 12, 2019, the United States Attorney’s Office for the District of Massachusetts announced federal criminal charges in “Operation Varsity Blues,” the largest college admissions case ever prosecuted by the Department of Justice. Fifty people have been charged for their involvement in what prosecutors describe as a nationwide conspiracy to get the children of… Continue Reading
Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims

Series of DOJ Enforcement Policy Announcements Provides Promising Guidance

In a series of key policy announcements between November 2017 and May 2018, the Department of Justice has demonstrated an increasingly coherent perspective on how it will handle key aspects of white collar criminal enforcement. The policies largely reiterate a message federal prosecutors have delivered for years regarding what they want to see from companies… Continue Reading
Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims

DOJ Memorandum Sets Out FCA Dismissal Factors

A January 10 internal memorandum from the director of the fraud section of the DOJ’s civil division commercial litigation branch, which has recently become public, sets out the factors the government should consider in dismissing False Claims Act (FCA) cases in which it has declined to intervene, and may suggest a greater possibility that the… Continue Reading
Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims

President’s Proposed Budget Increases Healthcare Fraud Enforcement Funding

Much of the discussion surrounding President Trump’s 2018 budget blueprint has focused on cuts, but one proposed budget increase shows the new administration is likely to continue focusing on healthcare fraud enforcement.  Among cuts of approximately 18% to the budget of the Department of Health and Human Services (HHS), the president’s budget proposes $70 million… Continue Reading
Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Fraud, Deception and False Claims

Will 2017 Be the Year of Insider Trading Reform?

For several years running, insider trading has been among the most high-profile enforcement priorities for both DOJ and the SEC. Unlike most federal criminal law, insider trading remains undefined by statute, having instead been largely judge-made. Unsurprisingly, since the explosion of enforcement actions began, prosecutors and defendants have both pushed the courts to clarify (or… Continue Reading
Compliance, Fraud, Deception and False Claims

Department of Education Adopts Rules Increasing Student Loan Risk for Schools

As we previously reported, in June the Department of Education (DOE) proposed new rules relating to when students could assert a borrower defense to repayment, effectively a discharge of student loans.  On November 1, DOE adopted the rules in substantially the same form they were proposed. In commentary, DOE observes that the former borrower defense… Continue Reading
Energy Enforcement, Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims

Court Holds FERC De Novo Review to Proceed as “Ordinary Civil Action”

Last week, a federal district judge ruled for the first time that the “review de novo” promised by section 31(d) of the Federal Power Act (“FPA”), 16 U.S.C. § 823b(d), will be “treated as an ordinary civil action requiring a trial de novo.”  FERC v. Maxim Power Corp., Civ. No. 3:15-30113-MGM, at 2 (D. Mass.… Continue Reading
Election and Political Law, Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims, Securities and Commodities

AN IMPORTANT CHECK ON THE ABUSE OF GOVERNMENT AUTHORITY

As citizens of a nation founded on the rule of law, we depend upon law enforcement and prosecutors to protect us from harm and from those who infringe our liberty.  In exchange for this protection, we permit these public servants to exercise authority and at times great power.  Thankfully, and it should go without saying,… Continue Reading
Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims, Securities and Commodities

SEC Describes Recent Efforts to Combat Pyramid Schemes and Affinity Frauds

Over the past two years, the Securities and Exchange Commission (SEC) has stepped up enforcement actions against pyramid schemes and related affinity frauds. Last week, in a speech at the University of Illinois at Chicago, Andrew Ceresney, director of the SEC’s Enforcement Division, addressed his division’s most recent efforts to combat these frauds. In particular,… Continue Reading
Anti-Bribery and Corruption, Fraud, Deception and False Claims

The Olympus Debacle: Why Internal Whistleblowing is a Good Thing for Compliance

The U.S. Department of Justice announced last week that Olympus Corporation of the Americas (OCA) agreed to pay $646 million to resolve three cases relating to its longstanding practice to bribe doctors and hospitals in the U.S. and abroad. The company entered deferred prosecution agreements (DPA) related to violations of the Anti-Kickback Statute (AKS) and… Continue Reading
Fraud, Deception and False Claims

Is the Government the Public? Seventh Circuit Suggests Willingness to End FCA Circuit Split by Joining Sister Circuits in Saying No

Courts generally agree in False Claims Act cases that the government alone does not count as “the public” for purposes of the Act’s public disclosure bar. The current bar calls for dismissal of complaints whose allegations have already been publicly disclosed, with the aim of preventing parasitic suits. Seven circuits subscribe to the view that… Continue Reading
Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims

Developer Facing 230-Year Sentence Illustrates Necessity of Full and Accurate Disclosure

Demonstrating the importance of full and accurate disclosure, a Chicago commercial real estate developer faces a maximum sentence of 230 years in prison for misrepresenting his company’s finances. After a two-week trial, on February 24, a jury found Laurance Freed, president of Joseph Freed and Associates LLC (JFA), guilty of bank fraud, mail fraud, and… Continue Reading
Anti-Bribery and Corruption, Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims

The SFO’s ‘Seize and Sift’ Procedure

R (on the application of Colin McKenzie) v Director of the Serious Fraud Office saw an unsuccessful attempt to judicially review the SFO’s currently in-use procedure for dealing with material that it has seized, and which may contain content subject to legal professional privilege (“LPP”). This ‘procedure’, set out in the SFO’s Operational Handbook, provides… Continue Reading
Anti-Money Laundering, Compliance, Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Fraud, Deception and False Claims

FinCEN Announces First Card Club AML Enforcement Action

Just in time for Christmas, the Financial Crimes Enforcement Network (FinCEN), the financial industry (including casinos and card clubs) regulator, announced its first-ever enforcement action against a card club, California’s Oaks Card Club (Oaks). The enforcement action, which carried a penalty of $650,000, is the latest in a string of actions against gaming enterprises and is… Continue Reading

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