Justice Department to step up efforts to tackle white-collar crime, official says

A senior Justice Department official gave first insight into the Biden administration’s approach to white-collar crime, saying the agency would commit new resources and tools to root out corporate wrongdoing and their leaders who undermine the national security of the United States.

John Carlin, a senior member of the Deputy Attorney General’s office, in a speech Tuesday to an audience of white-collar defense lawyers, acknowledged that the Justice Department’s efforts to tackle white-collar crime had fluctuated over the years. He added that the agency would “redouble” its commitment to tackling white-collar crime under the Biden administration.

“Our prosecutors cannot be afraid of carrying tough cases,” Carlin said via video at an event hosted by legal publication Global Investigations Review in New York. “In order to support this, I think you will see in the days and months ahead that we are building up to increase resources for business law enforcement.”

While Mr Carlin highlighted ways in which the Biden administration’s approach to tackling white-collar crime would be consistent with previous administrations, he also pointed out that the current leadership of the Department of Justice could make a difference. corporate misconduct a higher priority than in recent years.

Justice Department leaders under President Barack Obama faced a backlash following the 2007-2009 economic recession for what critics saw as a failure to hold businesses and executives accountable for their role in the subprime mortgage crisis. Under President Donald Trump, the Justice Department has made issues such as immigration and violent crime its top priorities.

“There is a crisis of confidence when it comes to the government’s ability to effectively monitor businesses and confidence in businesses,” Carlin said. “It’s bad for business and bad for the government.”

Mr Carlin described several initiatives to strengthen white-collar law enforcement, which he said he previewed for the first time, including one that will integrate Federal Bureau of Investigation agents into a component of the Department of Justice which investigates foreign bribery, market manipulation and healthcare. cases of fraud. Adding new resources to the prosecution of white collar crimes has already started, he said.

Agents typically work closely with prosecutors to develop business, but from offices in separate physical locations. Mr Carlin said the Justice Department would create a new team of FBI agents who would work full time in the agency’s fraud section. The section, which is part of the department’s criminal division, is one of the largest groups of white-collar prosecutors in the United States.

The Justice Department will also be reviewing its policies on white-collar law enforcement, Carlin said. He said the agency would likely continue efforts started under the Obama administration to encourage companies to put in place compliance programs that can stop violations of the law by their employees before they happen.

“The current leadership strongly believes that prosecutions are not successful, that success prevents crime from happening in the first place, reduces crime,” Carlin said. “We must continue to look for ways upstream to clearly communicate what [our] expectations are, so there are effective compliance programs in companies.

In addition to more resources, Carlin said the Justice Department will also continue to develop new tools, including the use of data analytics to identify corporate wrongdoing. Companies should also invest in data analytics for the same purpose, he said.

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“It will be the expectation here, when evaluating compliance programs, that companies use the same type of analysis to find and predict faults,” Carlin said.

National security, including the enforcement of economic sanctions and export control laws, is an area of ​​white-collar crime the Justice Department will continue to focus on, Carlin said. The use of cryptocurrencies by criminals and ransomware attacks are others, he added.

Mr Carlin echoed a warning made by former Justice Department officials about using settlement agreements to resolve law violations with companies.

In recent decades, the ministry has increased its use of so-called deferment and no-prosecution agreements, which allow companies to avoid criminal prosecution if they undertake certain reforms. The agreements became controversial in the wake of the Justice Department’s response to the 2007-2009 financial crisis.

“We have to make sure that those who benefit from such an arrangement live up to their responsibility.” Mr Carlin said. “If not, you should expect serious repercussions. “

Write to Dylan Tokar at [email protected]

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Elizabeth J. Harless