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National Trend: Criminal Prosecution of Employers for Improper Pay Practices

White Collar Posts

Then presidential candidate Hillary Clinton's 2015 statement about the possibility of incarcerating employers for alleged “wage theft” was, to many, an alarming prospect. Since that time, this position has become more mainstream among workers’ rights advocates, politicians, and, critically, prosecutors.  Today, prosecutors across the country increasingly seek criminal fines and jail time for what were previously seen as non-criminal labor violations better handled by Departments of Labor and other civil regulators.

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COVID-Era Challenges to Federal Indictments

White Collar Posts

Bloomberg Law recently published two articles drawing on the Women's White Collar Defense Association (WWCDA) Thought Leadership Subcommittee’s recent WaterCoolerPLUS session entitled “COVID-Era Challenges to Federal Indictments.” Both articles, co-authored with fellow WWCDA members, offer practical insights for practitioners seeking to challenge federal indictments related to COVID-19. 

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Third Circuit Reaffirms That Willfulness Does Not Require Knowledge That Conduct is Criminal, Rather Than Merely Unlawful

White Collar Posts

On December 4, 2020, the Third Circuit affirmed the district court’s willfulness jury instruction in a criminal payroll tax case under I.R.C. § 7202, which followed the familiar definition of willfulness found in Cheek v. United States.  In United States v. Gilmore, the Third Circuit rejected the defendant’s contention that willfulness requires knowledge that the defendant’s conduct is criminal, affirming that “willfulness in the context of tax crimes merely requires knowledge and violation of a duty.”  

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DOJ Updates Corporate Compliance Program Evaluation Guidance

Blogs and Thought Leadership

First, DOJ updated its interpretation of one of the three “fundamental questions” that an evaluating prosecutor should ask. In addition to determining whether the company’s compliance program (1) is well designed and (2) works in practice, prosecutors should also consider (3) whether the program is being applied earnestly and in good faith. The updated guidance explains that this third question requires prosecutors to determine if the program is “adequately resourced and empowered to function effectively.” 

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FinCEN Releases First Advisory on COVID-19 Illicit Activity, Including New Red Flags for Potential COVID-19 Fraud and Scams

White Collar Posts

On May 18, 2020, the Department of Treasury's Financial Crimes Enforcement Network (FinCEN) released its first advisory to financial institutions about detecting and preventing COVID-19 fraud. The guidance provides financial institutions with 22 red flag indicators to help identify potential illicit activity related to the pandemic, such as price gouging and hoarding medical supplies; fraudulent cures, tests, and vaccines; and non-delivery scams. FinCEN plans to issue additional advisories about financial crimes related to the pandemic in the future.

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U.S. Attorney in Philadelphia Calls on Hospitals and Providers to Help Fight COVID-19-Related Fraud

White Collar Posts

In a letter released Thursday, April 16, 2020, the U.S. Attorney for the Eastern District of Pennsylvania called on area hospitals, health systems, and other providers to join the government's fight against coronavirus-related fraud. Hospitals, providers, and other health care institutions are on the front lines of the coronavirus pandemic and know first-hand the challenges in obtaining critical supplies. They also are in a unique position to identify COVID-19-related fraud, such as offers to sell non-existent or fake equipment and price gouging of supplies.

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FinCEN Imposes Civil Money Penalty on Former Bank Officer for Failing to Adequately Staff Bank's AML Compliance Function and for Capping Bank's Suspicious Activity Reports

White Collar Posts

In February, 2018, FinCEN and the Office of the Comptroller of the Currency imposed a $185 million civil money penalty on U.S. Bank N.A. for willful violations of the Bank Secrecy Act (BSA), including failing to establish and implement an adequate anti-money laundering (AML) program and failing to report suspicious activity. On March 4, 2020, FinCEN imposed a $450,000 civil money penalty on the Bank's former Chief Operational Risk Officer for his role in these failures.

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Third Circuit: Imprisonment for Refusing an Order to Decrypt a Device Cannot Exceed 18 Months - Even When Alleged Related Criminal Conduct is Involved

White Collar Posts

On February 6, 2020, the Third Circuit ordered Francis Rawls released from confinement for civil contempt, where he has been held for over four years - since September 30, 2015. Rawls was imprisoned for refusing to comply with a Magistrate Judge's order that he use his password to decrypt his electronic devices, which the government claimed contained child pornography. Although the Third Circuit did not hold that Rawls could not be compelled to decrypt his devices, it did rule that Rawls could not be imprisoned for contempt as a "Recalcitrant Witness" for more than eighteen months.

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