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The V&E Report
Insights in Government Enforcement and Investigations

Lessons Learned: A High-Profile FARA Acquittal at Trial Provides Guidance for Both the Government and Targets of Future Investigations

On September 4, a federal jury took only a few hours to return a verdict of “not guilty” for Washington, D.C. attorney and former White House Counsel Greg Craig in a high-profile trial brought by the Department of Justice’s Foreign Agents Registration Act (“FARA”) Unit and federal prosecutors from the U.S. Attorney’s Office for the District of Columbia. 

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  • 09
  • September
  • 2019

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When Trade Secret Cases “Go Criminal”

At a time when the federal government is stepping up its enforcement of federal trade secret law in an effort to safeguard American intellectual property from national security threats from China and elsewhere, the recent criminal indictment of former Google and Uber executive Anthony Levandowski underscores the potential criminal specter that looms over civil trade secret disputes.

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Where in the World Is Dirty Money Going? FinCEN’s Newest Investigation Unit Targets Global Money Laundering

The Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) recently announced the launch of a Global Investigations Division (“GID”). GID will focus its efforts on implementing targeted investigation strategies to combat money laundering and terrorism financing in domestic and international contexts.

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  • 03
  • September
  • 2019

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For Whom the Statute Tolls: Challenges to FCPA Indictment May Expose Government Vulnerabilities in International Cases

As companies grow and expand their international footprint, their operations are scrutinized with increasing frequency by federal prosecutors. However, recent pre-trial litigation in a FCPA case suggests that one important government tool may be vulnerable to challenge by sophisticated defense counsel, which could stifle the government’s ability to build and bring a criminal case beyond the normal five-year limitations period, provided the defense can show that the government’s mutual legal assistance request to another country was pretextual in nature.

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“Panama Papers” Case Reminds How to Protect Against Inadvertently Waiving Attorney-Client Privilege

Recent efforts by the Department of Justice to obtain confidential attorney-client communications in connection with a “Panama Papers” indictment present a stark reminder that lawyers and clients must fastidiously protect the attorney-client privilege else their communications may be compromised and used against them at trial. In an age where the threat from hackers stealing and disseminating confidential information is all too real, prosecutors still will be restricted from accessing and using such materials in their investigation provided you and your clients know what steps to take to protect against an inadvertent waiver of privilege.

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Cisco’s $8.6 Million False Claims Act Settlement Signals Viability of Cybersecurity Claims Under the False Claims Act

On July 31, 2019, Cisco Systems, Inc. (“Cisco”) agreed to pay $8.6 million to settle a False Claims Act (“FCA”) whistleblower allegation that it sold video surveillance equipment to government agencies knowing the equipment was susceptible to cyber-attack.1 The FCA, 31 U.S.C. §§ 3729 – 3733, provides liability for any person who knowingly submits false claims to the government.

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  • 14
  • August
  • 2019

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Third Circuit Upholds Bribery Conviction Despite Narrowed Definition of “Official Act” Under McDonnell

Last week, the Third Circuit upheld the conviction of Robert Cordaro, a Lackawanna Pennsylvania County Commissioner, for bribery, extortion, and racketeering despite Cordaro’s claims that the Supreme Court’s holding in McDonnell v. United States decriminalized his conduct. Cordaro was convicted in 2011 for his role in a pay-to-play scheme in which he allegedly received payment and support from engineering firms in exchange for influencing government agencies to contract with the firms on various projects.

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With Bipartisan Support, the Illicit Cash Act Aims to Modernize Anti-Money Laundering Efforts

A promising anti-money laundering bill offers a suite of updates to the current AML regime. It would decrease unnecessary regulations, target shell companies, raise incentives for whistleblowers, and sweep digital currencies into the definition of “monetary instruments.” The proposal is called the Improving Laundering Laws and Increasing Comprehensive Information Tracking of Criminal Activity in Shell Holdings Act (or “ILLICIT CASH Act”).

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Not So Cryptic: AG Barr Adamant That “Warrant-Proof Encryption” Poses Threat to Public Safety

In a keynote address at the International Conference on Cyber Security on Tuesday, July 23, Attorney General Barr clearly articulated the DOJ’s position that “‘warrant-proof’ encryption poses a grave threat to public safety by extinguishing the ability of law enforcement to obtain evidence essential to detecting and investigating crimes.”1 Barr outlined the ways in which criminals — including drug traffickers, human traffickers, terrorists, and gangs — use encrypted messaging technology to further criminal enterprises, and he criticized technology companies for failing to work with law enforcement “to preserve lawful access” to suspects’ encrypted devices and messages, even when police have a valid search warrant.2

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Regulators Dislike Facebook’s Entry into Cryptocurrency Market, Calling “Libra” an AML Threat

A month after announcing its new global digital currency “Libra,” Facebook is finding itself under increased scrutiny with U.S. regulators. Lawmakers and senior government officials are raising concerns about how Libra would comply with money laundering, terrorism financing, and trade sanctions laws. While Facebook says it will comply with the laws, the company has offered no concrete ideas on how a semi-anonymous digital cryptocurrency could fit within a legal landscape designed around traditional financial institutions.

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Do Bitcoin ATMs Make Money Laundering too Easy? Regulators Try to Keep up with Emerging Cryptocurrency Trend

Law enforcement agencies have warned that digital currencies, like Bitcoin, are easily used by criminals to launder the proceeds of illegal activities. In the past, buying and selling Bitcoin was technically complex, with limited opportunities for converting physical currency into digital currency without detection. With the recent advent of Bitcoin ATMs, however, converting ill-gotten cash into Bitcoin, or Bitcoin into cash, is now as convenient as visiting an ordinary ATM. More than 3,300 Bitcoin ATMs are in the United States, out of 5,000 worldwide.1

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  • 23
  • July
  • 2019

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DOJ Signals FCPA Policy Shift Focusing on M&A Transactions, Creating New Incentives and Heightened Risks for Companies on Both Sides of Deals

A recent expansion by the Department of Justice (“DOJ” or the “Department”) to its FCPA Corporate Enforcement Policy (“CEP”) has gone largely unnoticed, but the shift in policy now provides new incentives for companies to self-report misconduct that is discovered after a merger or acquisition, while also raising the specter of increased exposure for companies and executives who sell assets tainted by corruption. 

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  • 18
  • July
  • 2019

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What’s in a DPA? Breaking Down Deferred Prosecution Agreements in Light of New Antitrust Division Policy

The DOJ’s Antitrust Division (“Division”) recently announced a significant policy change — that we covered in depth here — that will afford non-leniency companies the opportunity to seek mitigation credit in a criminal antitrust investigation if the company had in place at the time of misconduct a robust and effective compliance program. In a speech on July 11, 2019,1 Assistant Attorney General Delrahim announced that effective immediately, the Division will now allow its prosecutors to resolve wrongdoing by way of a deferred prosecution agreement (“DPA”) when a company’s compliance program is adequately designed to prevent, detect and remediate criminal wrongdoing by its employees and when the company self-reports the misconduct to the Division.

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Truth or Cyber-Consequences: Government Contractor Suspended After Suffering Cyberattack and Data Breach

Government contractors that expose government information to cyberattacks may face suspension from doing business with the Federal Government. Perceptics, LLC suffered a highly publicized cyberattack that was revealed in June 2019, and the decision of U.S. Customs and Border Protection (“CBP”) to suspend the company demonstrates the severe consequences that government contractors face if they fail to protect against cyberattacks or to comply with contractual cybersecurity obligations.

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  • 27
  • June
  • 2019

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Big Brother! China Doubles-Down On Ability to Monitor and Collect Data

On May 28, 2019, China released draft Measures for Data Security Management (“Measures”) that purport to implement data protection requirements by creating individual rights to correct and delete personal information from data storage, mandatory notifications to individuals in the event of a data breach, and a presumption of liability on network operators for breaches caused by third-parties. The Measures include a catch-all provision, however, that would compel the network operator (broadly defined) to provide so-called “important data” to the government upon its request.

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