Category Archives: U.S. Sentencing Guidelines (USSG)

White-Collar and Regulatory Enforcement: What Mattered in 2023 and What to Expect in 2024

by John F. Savarese, Ralph M. Levene, Wayne M. Carlin, David B. Anders, Sarah K. Eddy, Randall W. Jackson, and Kevin S. Schwartz

Top left to right: John F. Savarese, Ralph M. Levene, Wayne M. Carlin, and David B. Anders.
Bottom left to right: Sarah K. Eddy, Randall W. Jackson, and Kevin S. Schwartz. (Photos courtesy of Wachtell, Lipton, Rosen & Katz)

This past year was yet another notable and intensely active one across the entire range of white-collar criminal and regulatory enforcement areas. We heard continued tough talk from law enforcement authorities, especially concerning the government’s desire to bring more enforcement actions against individuals and on the need to keep ramping up corporate fines and penalties. The government largely lived up to its talking points about increasing the numbers of individual prosecutions and proceedings, particularly with respect to senior executives in the cryptoasset industry. But there were some notable stumbles. The most striking example of this was DOJ’s failure to secure convictions in cases where it attempted to extend criminal antitrust enforcement in unprecedented areas, such as no-poach employment agreements and against certain vertical arrangements—neither of which has historically been viewed as involving per se violations of the federal antitrust laws. And, as in years past, many state attorneys general remained active throughout 2023, using broad state consumer-protection statutes to bring blockbuster cases across a wide array of industries, from ridesharing and vaping to opioids and consumer technology offerings.

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Former Prosecutors and Industry Experts React to Sam Bankman-Fried Trial Verdict

The NYU School of Law Program on Corporate Compliance and Enforcement (PCCE) is following the collapse of FTX and the civil and criminal enforcement actions arising from FTX’s and its founder’s alleged misconduct. In this post, several white collar defense, former federal prosecutors, and cryptocurrency experts, offer their reactions to the verdict in the Sam Bankman-Fried (SBF) trial on November 2, 2023.

Top left to right: William Komaroff, Seetha Ramachandran, David I. Miller, and Ijeoma Okoli
Bottom left to right: Jessica Lonergan, Tarek Helou, Elizabeth Roper, and Chehak Gogia
(Photos courtesy of authors)

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The First Step Act Shortens Federal Prison Sentences, Including Elizabeth Holmes’

by Walter A. Pavlo, Jr.

(Photo courtesy of the author)

Elizabeth Holmes, of Theranos fame, surrendered to the federal prison camp FPC Bryan in Texas on May 30, 2023 to begin a 135-month sentence for fraud.[1] Media outlets followed her attempts to postpone her surrender to prison while she appealed her conviction but ultimately those efforts failed. However, a prison term after the sweeping First Step Act means that federal prison sentences, particularly for white collar offenders, has dramatically changed. Even those with long prison terms could be home much sooner than they would have under older federal laws.

This article will focus on the application of the First Step Act to Ms. Holmes’ sentence, not to degrade her, but because she simply is a high-profile name with a high-profile sentence. The same principles used here can be used on any federal sentence with a similar charge.[2]

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Former Federal Prosecutors React to Changes in the DOJ Criminal Division’s Corporate Enforcement Policy

Editor’s Note: The NYU School of Law Program on Corporate Compliance and Enforcement (PCCE) is following the recently announced changes to the Corporate Enforcement Policy of the U.S. Department of Justice’s (DOJ’s) Criminal Division. In this post, several former federal prosecutors provide their reactions.

The image provides photos of the authors

Top row from left to right: Andrew Weissmann, Glen McGorty, Rebecca Ricigliano, and Steven Feldman
Bottom row from left to right: Lara Burke, Robertson Park, and Kristy Greenberg

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Neither Carrots nor Sticks: DOJ’s Unfulfilled Commitment to Corporate Health Care Compliance

by Jacob T. Elberg

In October, Deputy Attorney General (“DAG”) Lisa Monaco assured an audience of white collar defense counsel,“[C]ompanies serve their shareholders when they proactively put in place compliance functions and spend resources anticipating problems. They do so both by avoiding regulatory actions in the first place and receiving credit from the government. Conversely, [the Department of Justice] will ensure the absence of such programs inevitably proves a costly omission for companies who end up the focus of department investigations.”[1]

This aspect of DAG Monaco’s speech drew little attention, as the Department of Justice (“DOJ”) has for decades sought to encourage four compliant behaviors in corporate actors: maintenance of an effective compliance program before the onset of government scrutiny (pre-existing compliance program), post-enforcement adoption of an effective compliance program, cooperation with a government investigation, and self-disclosure of misconduct. While DOJ’s public statements reflect a claimed commitment to all four, analysis of DOJ policy and resolved cases makes clear that as DOJ has increasingly prioritized and incentivized the latter three behaviors, the first—an effective pre-existing compliance program, the only one aimed towards stopping fraud before it occurs—has been cast aside in one of DOJ’s highest-profile enforcement areas: health care fraud.

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Carlin Speech Signals DOJ White Collar Enforcement Priorities

by Greg Andres, Uzo Asonye, Martine Beamon, Robert Cohen, Daniel Kahn, Tatiana Martins, Paul Marquardt, Fiona Moran, Paul Nathanson, and Daniel Stipano

Principal Associate Deputy Attorney General John Carlin previewed the Department of Justice’s (“DOJ”) refocused corporate enforcement efforts during a speech on October 5, 2021 at GIR Connect: New York. Carlin’s speech underscored the primary levers a new administration can pull to quickly and meaningfully impact the white collar enforcement space: messaging increased white collar enforcement to relevant stakeholders, instituting new and revising existing policies, creating dedicated taskforces, and increasing resources for white collar enforcement. Carlin addressed each of these categories by outlining key DOJ priorities, including increased enforcement related to sanctions, export controls, and cryptocurrency; continued expansion of international cooperation and coordination; a “surge” in resources, exemplified by a new dedicated FBI squad for Foreign Corrupt Practices Act (“FCPA”), market integrity, and health care fraud investigations; an upcoming review and revision of corporate enforcement policies; continued and increased use of data-driven enforcement techniques; enhanced and expanded international cooperation; and a warning regarding companies’ compliance with subpoenas and the terms of resolution agreements.

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Managing Risk in Compliance Staffing Decisions

by Kathryn Reimann

Prior to the Covid-19 pandemic, anecdotal and industry survey evidence suggested that compliance staff downsizing and compliance budget capping were taking place across the corporate world in response to perceived changes in the regulatory and enforcement environment.[1] More recent reports have indicated that downsizing may continue in tandem with broader budget cuts as companies take stock of their prospects in a post-pandemic world.[2] At the same time, the changing risk landscape and implementation of new programs related to addressing the pandemic or its economic impact translate into additional demands on compliance functions.

Appropriate compliance risk management, by definition, requires the periodic redeployment or readjustment of resources to address the most critical risks of the company in a changing environment. When the fortunes of a company change dramatically for the worse, down-sizing across units may be an unavoidable consequence. However, corporate compliance is subject to unique case law and enforcement standards that set a high bar for getting compliance staffing decisions right. Continue reading →

Global Anti-Bribery Year-in-Review: 2017 Developments and Predictions for 2018

by Kimberly A. Parker, Jay Holtmeier, Erin G.H. Sloane, Lillian Howard Potter, Tetyana V. Gaponenko, Victoria J. Lee, and Roger M. Witten

This past year marked the 40th anniversary of the U.S. Foreign Corrupt Practices Act (“FCPA”). Since its enactment in 1977, the U.S. Department of Justice (the “DOJ”) has brought approximately 300 FCPA enforcement actions, while the U.S. Securities and Exchange Commission (the “SEC”) has brought approximately 200 cases.[1] This anniversary year, the first year of the Trump administration, demonstrated that the FCPA continues to be a powerful tool in combating corruption abroad and encouraging compliance at global companies.

Below are six key take-aways regarding FCPA enforcement in 2017: Continue reading →

Corporate Executives and Criminal Justice Reform

by Amy J. Sepinwall

On September 19, Senator Chuck Grassley (R-IA) issued a press release stating that the bipartisan authors of a 2015 landmark criminal justice reform bill were preparing to reintroduce that legislation. The Sentencing Reform and Corrections Act of 2015 (PDF: 1,020 KB), to which Sen. Grassley will grant new life, was part of a widespread effort at criminal justice reform that appeared to have died with the 2016 election. A centerpiece of the effort would have clarified and enhanced the mens rea (or mental state) necessary for conviction: in the House version, a defendant could be convicted only if she knew she was engaged in criminal activity; the Senate version was even more defendant-friendly, requiring willful participation.

Criminal justice reform has a laudable overarching ambition—to reduce sentences and incarceration rates, especially for minor drug and firearms offenses. As Yale Law Professor Gideon Yaffe writes, this would benefit “those who are especially ill-treated by the criminal justice system: the poor and racial minorities.” But these efforts are being championed by some unusual suspects: Republican members of Congress, who don’t ordinarily vie for more leniency when it comes to street crime, and the Koch brothers, who also are not usually poster boys for the plight of the underclass, who are over-represented (PDF: 153 KB) in criminal prosecutions, convictions and America’s prisons. Continue reading →

Sentencing Fraud

by Mihailis E. Diamantis

Imagine a class of criminals that is growing year over year, whose members have higher than average recidivism rates, and for whom the public has very little sympathy.[1] They would seem an unlikely group for judges and scholars to think are punished too severely. This, though, is the fortunate position of the white-collar fraudster.

To be sure, federal penalties for fraud can be quite burdensome.[2] The base offense level for most frauds is 6, but this can climb as the loss caused by the fraud increases from $6,501 (add 2 levels) up to $550,000,001 (add 30 levels). The number of victims can also have a significant impact, ranging from an additional 2 levels if there are at least ten victims to an additional 6 levels if there are more than twenty-five. A first-time fraudster who causes more than $550,000,001 in losses to at least twenty-five victims is looking at a recommended sentence of thirty years to life.[3] For most judges and scholars, that kind of punishment sounds disproportionate.[4] Continue reading →