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The V&E Report
Insights in Government Enforcement and Investigations

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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  • 26
  • June
  • 2019

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Maybe It’s Real This Time: Mexico Fights Corruption

In May 2019, delivering on his central campaign promise to target corruption in Mexico, Mexico President Andrés Manuel López Obrador’s administration launched an investigation into Emilio Lozoya Austin, former CEO of Mexican state-owned oil and gas company Petróleos Mexicanos (“Pemex”) for alleged fraud, money laundering, and bribery. The allegations revolve around Pemex’s 2014 purchase of a rundown and abandoned fertilizer plant for $475 million US from Altos Hornos de México (“AHMSA”), one of Mexico’s largest multinational companies. 

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  • 25
  • June
  • 2019

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DOJ Employs Aggressive Tactics to Win 5th Straight Trial Victory, Highlighting the Risks for Executives in FCPA Cases

On June 20, 2019, a federal jury in Boston returned guilty verdicts against two high-level executives for their role in a conspiracy to bribe foreign government officials in Haiti, in violation of the Foreign Corrupt Practices Act (FCPA) and related money laundering and Travel Act offenses.

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Walmart Doesn’t “Save Money,” But It May “Live Better” After DOJ Agrees to Significant Concessions to Narrow Scope of its Corporate Monitorship

In a significant departure from previous practice, the Department of Justice (“DOJ”) imposed a corporate monitor on a company even after it engaged in extensive remedial measures and enhanced its compliance functions, but DOJ also agreed to narrow the scope, obligations and term of the corporate monitorship in what is the most meaningful example yet of how DOJ intends to implement its new policy on corporate monitors.

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  • 20
  • June
  • 2019

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A New Day “Dawning”: Uptick in Dawn Raids by the United Kingdom Financial Conduct Authority

No matter the regulator, a series of enforcement officials and agents appearing unannounced to conduct an investigatory raid of a company’s place of business may be most companies’ worst nightmare. Although dawn raids still remain relatively rare, the United Kingdom’s Financial Conduct Authority (“FCA”) reported a significant increase in the use of this investigation tactic in 2018.

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  • 19
  • June
  • 2019

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Supreme Court Says States and Feds Can Prosecute the Same Crime, Upholding the “Separate Sovereigns” Doctrine

The Double Jeopardy Clause of the Fifth Amendment of the U.S. Constitution provides that no person shall “be subject for the same offence to be twice put in jeopardy of life or limb.” In a recent opinion, Gamble v. United States, the Supreme Court declined to overturn its prior interpretation of the clause under the so-called “separate sovereigns” doctrine.

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  • 12
  • June
  • 2019

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Opioid Manufacturer Files for Bankruptcy after Settling with DOJ

On June 5, the Department of Justice announced that opioid manufacturer Insys Therapeutics (Insys) agreed to settle the government’s criminal and civil investigations into an illegal marketing scheme for Subsys, an opioid spray used by adult cancer patients. The investigations are part of the DOJ’s escalating efforts to confront the opioid crisis and signal its continued commitment to address the country’s opioid issues.

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Heritage Pharmaceuticals Under Fire, Settles Criminal and Civil Charges with DOJ

On May 30, 2019, the DOJ’s Antitrust Division charged Heritage Pharmaceuticals Inc., a generic pharmaceutical company, for conspiring with its competitors to fix prices, rig bids, and allocate customers. The one-count felony information, filed on May 30 in the Eastern District of Pennsylvania, alleges that from April 2014 to December 2015 Heritage conspired with other individuals and companies to fix and maintain prices of glyburide, a medicine used to treat diabetes.1

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Supreme Court Extends the Statute of Limitations for Claims by Relators

The Supreme Court’s recent decision in Cochise Consultancy Inc. v. United States, ex rel. Hunt,1 has altered the landscape for False Claims Act (FCA) claims by expanding the period for private-party relators to bring FCA lawsuits. Under the Court’s unanimous decision in Cochise, relators can now file a complaint either six years after an FCA violation or three years after the facts of the false claim are known or reasonably should have been known by the government, up to a maximum of ten years after the date of the violation.

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New Guidelines Reward Voluntary Self-Disclosure of FCA Violations and Cooperation with DOJ

The U.S. Department of Justice (“DOJ”) announced this month its latest initiative to incentivize companies to voluntarily self-disclose potential False Claims Act (“FCA”) violations and to cooperate with DOJ during FCA investigations.1 These new guidelines, which have been incorporated into the U.S. Attorney Manual (recently renamed the Justice Manual), formalize DOJ’s established practice of decreasing FCA penalties sought when a company voluntarily discloses and actively cooperates with DOJ’s investigation into its conduct.

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  • 23
  • May
  • 2019

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Minority Report: San Francisco Bans Facial Recognition Tech Over Potential Bias, Privacy Concerns

Privacy advocates in the Bay Area have cause for celebration after San Francisco became the first municipality in the United States to pass an ordinance barring the city’s use of facial recognition technology because of the “propensity [of] facial recognition technology [to] endanger civil rights and civil liberties” and “exacerbate racial injustice.”

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