Tag:Department of Justice
Regulatory Scrutiny of Crypto Exchange “Binance” May Cause it to Leave the U.S.
State and federal regulators are opposing a billion-dollar deal between the cryptocurrency exchange Binance.US and the bankrupt cryptocurrency lender Voyager. The regulatory intervention is part of an ongoing struggle between Binance, the ultra-dominant cryptocurrency exchange, and U.S. regulators. Tensions between the two appear to be nearing a boiling point. The dispute also highlights an American regulatory environment that is increasingly hostile toward the cryptocurrency industry writ large, particularly in the wake of the FTX cryptocurrency exchange collapse.
Crypto Platforms Under Scrutiny by Various U.S. Agencies
Since the beginning of 2023, the cryptocurrency market has faced legal action from multiple U.S. agencies in efforts to control a sector that, until recently, mostly operated beyond the bounds of conventional financial regulation. As a result of the executive order issued by the Biden Administration in March 2022, various federal agencies examined the risk and benefits of cryptocurrencies and have issued official reports. These reports have led to coordinated action against the crypto market. The administration aims to “ensure that cryptocurrencies cannot undermine financial stability, to protect investors, and to hold bad actors accountable.” In their attempts to promote regulation, the Securities and Exchange Commission (SEC), the Department of Justice (DOJ), and the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of Treasury, have acted against the crypto market on several fronts, frightening off bank allies, suing crypto firms for violating investor protection laws, and targeting exchanges connected to money laundering.
New Incentives from the DOJ to Urge Companies to Self-Report Crimes
In an action meant to incentive companies to self-report their wrongdoings, the Justice Department (DOJ), has announced big changes to its Corporate Enforcement Policy (CEP). The Department of Justice has long been fighting against corporate criminality in its pursuit to maintain the integrity of the financial market. On January 17, Assistant Attorney General Kenneth A. Polite, Jr., announced revisions to the Criminal Division’s Corporate Enforcement Policy. Some of the revisions include up to a 75 percent reduction in fines for companies that voluntarily report their wrongdoings and fully cooperate with investigations and up to a 50 percent reduction for companies that fully cooperate with investigations even if they do not voluntarily disclose the crime. These incentives further soften the aggressive stance that the Biden administration originally took against Corporate America in 2021.
Google Becomes the First to Agree to Compliance Monitoring by the DOJ
In an action to keep company executives in check, the Justice Department (DOJ), created a policy where executives and compliance chiefs sign and personally attest to the effectiveness of their compliance programs. The individuals would therefore be held personally liable for their roles in the company’s wrongdoing. The DOJ and Google had a pending dispute, which was due to Google’s non-compliance with assisting authorities in an investigation. The DOJ and Google reached an agreement, with a stipulation attached, resolving the dispute over Google’s loss of data responsive to a 2016 search warrant. In the stipulation, Google has said that it has spent over 90 million dollars on additional systems and resources to improve its compliance programs, including an agreement to allow an Independent Compliance Professional to serve as a third party to monitor that Google is fulfilling its compliance legal obligations. This policy, as already seen in the settlement with Google, is forcing compliance to become a top-tier concern for big companies or face serious consequences.
Department of Justice Announces The Second Monaco Memo
On September 15, 2022, Deputy Attorney General Lisa Monaco issued a memorandum to the Department of Justice (DOJ) titled “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group”. This memorandum is otherwise known as the “Second Monaco Memo”, named after the Deputy Attorney General. This is the second memorandum Monaco has issued in the past year, as the first memorandum was issued in October of 2021. The first memorandum announced the establishment of a Corporate Crime Advisory group, its purpose was to guide and review the DOJ’s approach to corporate criminal enforcement. These memorandums are important to both the defense bar and corporate counsel, as they establish rules and guidelines for corporate criminal enforcement.
America Has a Problem: The Ever-Worsening Water Crisis Plaguing the Country
As the summer came to an end, headlines about thousands of residents losing access to water swept the nation. The news came first out of Jackson, Mississippi. But although the southern city’s complete loss of access to water dominated the new cycle, it was far from the only place dealing with this issue. A few days later, reports of boil water advisories in Baltimore and NYC hit the news cycle. Unfortunately, these are only the latest instances in a long string of issues with access to safe and clean drinking water across the country.
DOJ’s Unveils New Tool to Fight Corporate Crime: Care About Compliance
In an effort to deter corporate crime, the Justice Department (DOJ) has implemented a new policy aimed at giving chief compliance officers more authority. Chief Compliance Officers (CCOs) may now need to certify the integrity of their compliance programs and be personally liable if their programs do not “reasonably prevent and deter compliance issues.” According to Brian Michael, a former chief compliance officer (CCO), some industry professionals fear that such a policy would place compliance officers in a position to be personally liable for decisions that they have little say over. There is also worry that implementing such a policy would place CCOs in direct conflict with senior executives. However, Kenneth Polite, assistant attorney general in charge of the DOJ’s criminal division, insists that the new policy will place CCOs in a better position to ensure the integrity of their compliance programs. Polite hopes to force corporations to invest in compliance now rather than pay later.
Action Against Individuals Regarding Fraudulent Genetic Testing
Michael Manganelli Associate Editor Loyola University Chicago School of Law, JD 2021 In October 2019, The Department of Justice (“DOJ”) announced a multi-agency and multi-state coordinated law enforcement action against 35 individuals involved in an alleged $2.1 billion genetic cancer testing scheme. The alleged scheme involved the payment of illegal kickbacks and bribes to medical professionals …
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Escobar’s Materiality Standard Shields Organizations from the Risk in Risk Adjustment Payments
Finance Director for UnitedHealth Group brought qui tam suit against UnitedHealth Group, Inc. alleging that the organization upcoded risk adjustment data resulting in increased payments (more than $1.14 billion) to UnitedHealth Group. The Department of Justice (DOJ) intervened in the case, yet UnitedHealth Group was successful in getting the primary False Claims Act Claims dismissed by arguing that the Centers for Medicare & Medicaid Services (CMS) would not have refused to make the adjustment payments had they known of the errors in the risk adjustment. The Escobar materiality standard helps clarify threshold level of risk to Managed Care Providers in attesting to their risk adjustment payments; the falsities must have had an impact on the respective payment.
My Summer with the Office of Inspector General for the U.S. Department of Health and Human Services
This summer I had the opportunity to intern with the Office of Inspector General for the U.S. Department of Health and Human Services (OIG) in Washington, DC. I thoroughly enjoyed my time with OIG, and I learned a great deal about health care fraud, waste, and abuse. In spending my summer with OIG, I had a glimpse into the powerful regulatory bodies that protect the health care market from abuse. As I move forward with my career in regulatory work, I will take with me the invaluable experiences and skills from my internship.