Friday, February 26, 2010

White Collar: Government to Use Full Arsenal to Combat White Collar Crime

Traditional investigation of white collar offenses has involved reactive strategies focusing on document review and witness interviews. Increasingly the Department of Justice is using more proactive investigative strategies. For instance, the Galleon hedge fund insider trading prosecution is using extensive wire tap evidence. Additionally, the Department has recently brought a prosecution against 22 individuals for violations of the Foreign Corrupt Practices Act ("FCPA") based on the use of undercover agents. The FCPA outlaws the paying of bribes to foreign officials for business purposes.

Traditionally, white collar offenses came to the attention of law enforcement from complainants, whistle blowers, and self reporting. The new aggressive stance by the Justice Department could make prosecution of wrongdoing far more likely. Use of undercovers and electronic surveillance will facilitate the investigation and prosecution of these crimes.

In addition to the Galleon and FCPA prosecutions the Justice Department has seen significant success in its efforts to combat healthcare fraud. The Department has set up Medicare Strike Forces throughout the country. The first of these strike forces began operating in Miami and Los Angeles in 2007. The program has now expanded to include Detroit, Houston, Brooklyn, Tampa, and Baton Rouge. Since its inception the program has charged more than 300 defendants in more than 200 cases totaling allegations of more than $860 million in fraud. Prosecutors have convicted 230 defendants with almost 200 being sentenced to prison.

Assistant Attorney General Lanny Breuer has said that DOJ will continue its focus on white collar criminal prosecution. He told an audience at an American Bar Association event that the Department was developing "threat-based and intelligence-driven" strategies to pursue those committing mortgage fraud. Moreover, the AAG said that the Department was reorganizing sections to improve its approach in certain significant areas of prosecution.

For more about Assistant Attorney General Breuer's comments, please see Reuters, "US Top Cop Says Justice Department Using New Tools," February 25, 2010,

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