On February 2, 2012, Wegelin & Co., Switzerland’s oldest private bank, became the first overseas bank to be indicted by the United States for aiding tax fraud—but it may not be the last. The company is one of at least 11 banks under criminal investigation by the U.S. Department of Justice (DOJ)—a list that is rumored to include banks such as Credit Suisse, Julius Baer, Zürcher Kantonalbank and Basler Kantonalbank. Wegelin was targeted for having helped wealthy Americans evade taxes on at least $1.2 billion from 2002 through 2011. Its colorful leading partner, Konrad Hummler, probably did not help their case when he apparently called America the “worst aggressor since the Second World War” for its efforts in cracking down on Swiss banks.
The Uncomfortable Resurgence of the Responsible Corporate Officer Doctrine
Posted in Corporate Governance, Environmental Crimes, Health Care FraudBy Mike Emmick and Joseph Barton
Corporate executives in the health care and environmental industries are rapidly coming to appreciate the implications of the responsible corporate officer doctrine, a recently-revitalized weapon in U.S. Department of Justice’s battle against corporate crime.
This doctrine is a peculiar exception to the usual requirements for a criminal prosecution. Ordinarily, criminal law requires a defendant to have committed a criminal act, and to have done so with criminal intent.
Mandatory Debarment for FCPA Violations? A Bad Idea Whose Time Should Never Come
Posted in Administrative/Regulatory Remedies, Foreign Corrupt Practices Act (FCPA)In the fervor of the U.S.’s current anti-foreign-corruption efforts, a particularly misguided proposal has occasionally reared its ugly head: Requiring “mandatory debarment” for any company that violates the Foreign Corrupt Practices Act (“FCPA”).
On the merits, such a proposal is completely wrong-headed. Debarment is a severe, forward-looking administrative remedy – the corporate “death penalty” – not a vehicle to “boost” the penalties for past criminal FCPA violations. Continue Reading
DOJ Wins AUO Convictions in LCD Price-Fixing Trial, Successfully Defending Its Cartel Program
Posted in Antitrust, Sentencing, USSG, TrialsIn a widely followed eight-week trial before the Honorable Susan Illston in the Northern District of California, the Antitrust Division of the United States Department of Justice succeeded in obtaining price-fixing convictions against AU Optronics, a Taiwanese company; AUOA, its US subsidiary; and two senior executives. Two more junior executives were acquitted, and the jury hung as to a third executive. The jury also found that the gain from the conspiracy was at least $500 million, thereby triggering the Alternative Fine statute, 18 U.S.C. § 3571(d), and upping the companies’ potential exposure to $1 billion. DOJ has trumpeted the convictions and finding of guilt as vindicating its cartel enforcement program.
Continue Reading
The Travel Act – The FCPA’s Red-Haired Stepchild
Posted in Foreign Corrupt Practices Act (FCPA)With all the attention being paid to the Justice Department’s aggressive prosecution of the Foreign Corrupt Practices Act, companies might be tempted to celebrate if an internal investigation revealed that no bribes had been paid to foreign officials (as might give rise to an FCPA violation), even though there had been commercial bribes paid to non-government foreign business representatives.
Prosecutorial misconduct stymies Department of Justice in FCPA trials
Posted in Foreign Corrupt Practices Act (FCPA), TrialsIn a stunning conclusion to the U.S. Department of Justice’s first guilty jury verdict against a corporation under the Foreign Corrupt Practices Act (FCPA), the U.S. District Court, Central District of California granted the defendants’ request to vacate the conviction of Lindsey Manufacturing Co. and its executives, and dismiss the indictment due to prosecutorial misconduct. U.S.A. v. Aguilar, No. 10-01031 (Cal. Dec. 1, 2011).
Continue Reading
Aggressive FCPA Enforcement Persists: Increased activity, along with recent legal developments, mandate that companies remain vigilant
Posted in Foreign Corrupt Practices Act (FCPA), TrialsEnforcement of the U.S. Foreign Corrupt Practices Act continues to increase dramatically. The U.S. government is dedicating more resources to FCPA enforcement and bringing more enforcement actions than ever before. This increased anticorruption enforcement activity, along with recent developments in the law, mandate that private and public companies alike remain vigilant in their FCPA compliance efforts.
Don’t Expect Too Much From DOJ’S Upcoming “New FCPA Guidance”
Posted in Corruption, Right to Honest Services, Foreign Corrupt Practices Act (FCPA)After the last few years of extremely aggressive DOJ prosecutions under the Foreign Corrupt Practices Act (FCPA), white collar practitioners and the business community generally can be forgiven if they saw a ray of hope in the recent comments of Lanny Breuer, the head of DOJ’s criminal division. Breuer, speaking at a November 2011 FCPA conference in Washington, announced that in 2012, DOJ would be releasing “detailed new guidance” on criminal and civil FCPA enforcement. The chairman of the conference characterized Breuer’s announcement as a “big step” that was “pretty significant.”
Got Pot? The Feds Try to Make Mortgagee Banks Liable Under the Crack House Statute
Posted in Forfeiture, Real Estate, SeizuresBanks holding mortgages now have one more thing to worry about: potential criminal and civil liability and forfeiture under the federal “crack-house” statute. Sound crazy? Read on, because late last year the four U.S. Attorneys in California threatened banks with liability simply because mortgaged properties were being used as medical marijuana dispensaries, even though such dispensaries are legal under state law.
No Strings Attached: The Latest Expansion of the Lacey Act
Posted in Environmental CrimesImporters of plants and plant products have good reason to be concerned about running afoul of the Lacey Act given the uncertainty created by 2008 amendments making violations of foreign law regarding plants a basis for violations under the Act. The recent saga of the Gibson Guitar Corp., maker of the iconic Les Paul guitar, has only confirmed that such concern is well-founded. As Gibson’s case exemplifies, the Department of Justice (“DOJ”) can disagree with foreign officials to rely on its own interpretation of foreign law to seize and seek forfeiture of goods, and even bring criminal charges.
Subscribe to this blog via RSS