Additionally, the Memo revised three policies related to corporate enforcement that had been issued by prior administrations, aligning those policies with the newly announced priorities and providing additional benefits to companies that self-disclose potential misconduct and fully cooperate with DOJ investigations.
The memo was issued by Matthew Galeotti, serving as Head of the Criminal Division of the Department of Justice (DOJ) in the absence of a nominee to serve as Assistant Attorney General, issued a memorandum titled “Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime” (Memo). The Memo, which was accompanied by a speech by Galeotti on the same day in Washington, is the first memo from the Criminal Division under the Trump Administration.
Notably, the Memo emphasized the substantial threats posed by white-collar crime and the impact of such crimes, including the exploitation of government programs, the erosion of public trust in financial markets, and threats to national security. At the same time, the Memo cautioned against overly aggressive enforcement that burdens legitimate business and harms U.S. economic interests. Consistent with the more measured approaches to corporate enforcement announced thus far by other U.S. enforcement agencies, the Memo observed that the “vast majority of American businesses are legitimate enterprises working to deliver value for their shareholders and quality products and services for customers.” Galeotti instructed Criminal Division prosecutors to “strike an appropriate balance between the need to effectively identify, investigate, and prosecute corporate and individuals’ criminal wrongdoing” while “avoid[ing] overreach that punishes risk-taking and hinders innovation… [and] minimize[s] unnecessary burdens on American enterprise.”
Three core principles
Accordingly, the enforcement strategy outlined in the Memo emphasized three core principles designed to strike that balance:
- Focus: prioritizing high-impact white-collar crimes that threaten the U.S. economy, national security, and financial integrity.
- Fairness: ensuring that enforcement actions are applied consistently, with clear guidelines for voluntary self-disclosure, cooperation, and remediation.
- Efficiency: streamlining investigative processes to deliver timely resolutions without unnecessary disruption to legitimate businesses.
Enforcement priorities: ten high-impact areas
The Memo identified ten “high-impact areas” that the Criminal Division will prioritize in its white-collar crime enforcement efforts:
- Fraud and abuse of government programs, including fraud related to government programs, government contracts, and health care.
- Trade and customs fraud, including tariff evasion.
- Fraud perpetuated through Variable Interest Entities (“VIEs”), including offering fraud, “ramp and dumps” elder fraud, securities fraud, and other market manipulation schemes.
- Fraud that targets U.S. investors, individuals, and markets, including Ponzi schemes, investment scams, elder fraud, investment fraud, service member fraud, and fraud that threatens the health and safety of consumers.
- Conduct by financial institutions and their insiders that threatens U.S. national security, including sanctions violations or enabling transactions by Cartels, transnational criminal organizations (“TCOs”), hostile nation-states, or foreign terrorist organizations.
- Material support by corporations to foreign terrorist organizations, including recently designated Cartels and TCOs.
- Complex money laundering, including Chinese Money Laundering Organizations, and other organizations involved in laundering funds used in the manufacturing of illegal drugs.
- Violations of the Controlled Substances Act and the Federal Food, Drug, and Cosmetic Act (FDCA), including the unlawful manufacture and distribution of chemicals and equipment used to create counterfeit pills laced with fentanyl and unlawful distribution of opioids by medical professionals and companies.
- Bribery and associated money laundering that impact U.S. national interests, undermine U.S. national security, harm the competitiveness of U.S. businesses, and enrich foreign corrupt officials.
- Crimes that involve digital assets and willful violations that facilitate significant criminal activity.
These areas all appear strategically focused on cases with a significant impact on U.S. interests, including economic interests, national security, and market integrity, while shifting away from cases involving more limited private interests.
Enhanced asset recovery and targeted investigations
In the Memo, Galeotti directed prosecutors to prioritize the identification and seizure of assets derived from white-collar crimes. Investigations will particularly focus on cases involving (i) high-level executives or decision-makers, (ii) substantial financial losses to victims, and (iii) attempts to interfere with or obstruct justice.
Expansion of the whistleblower rewards program
In line with the new strategy, Galeotti has expanded the DOJ’s whistleblower program – which we previously discussed in the post DOJ Kicks Off Whistleblower Rewards Program – to cover a broad range of offenses. This expansion targets:
- Violations by corporations related to international cartels or transnational criminal organizations, including money laundering, narcotics, Controlled Substances Act, and other violations.
- Violations by corporations of federal immigration law.
- Violations by corporations involving material support of terrorism.
- Corporate sanctions offenses.
- Trade, tariff, and customs fraud by corporations.
- Corporate procurement fraud.
Emphasizing fairness: corporate enforcement and self-disclosure
Galeotti reiterated in the Memo the Criminal Division’s commitment to fairness in enforcement and sought to increase the benefits to be gained from self-disclosure. According to the Memo, corporations that voluntarily disclose misconduct, cooperate fully with investigations, and take meaningful steps to remediate the wrongdoing will be eligible for leniency – including declinations – in what DOJ says will be a more transparent and predictable manner.
The Memo announced that the Criminal Division’s Corporate Enforcement Policy (CEP) is being revised by the Fraud Section and the Money Laundering and Asset Recovery Section to clarify the benefits of self-disclosure and cooperation, ensuring that compliant businesses receive appropriate credit. Furthermore, consistent with the emphasis on avoiding unnecessary burdens on corporations, Galeotti has instructed these Sections to review the duration of existing agreements with corporations to determine whether early termination is appropriate. This ongoing review must take into account several factors, such as the length of the post-resolution period, any substantial reduction in the company’s risk profile, the extent of remediation efforts, the maturity of the company’s compliance program, and whether the company self-reported the misconduct.
Promoting efficiency and judicial restraint
As mentioned, improved investigative efficiency – while historically touted as a goal by DOJ officials in nearly all recent administrations – is a central theme throughout the Memo. Galeotti has instructed the Criminal Division to:
- Expedite their investigations and charging decisions, emphasizing the importance of resolving matters more swiftly.
- Avoid imposing unnecessary monitorships, focusing instead on targeted, risk-based oversight.
- Review existing monitorships to determine whether they remain necessary or should be terminated early.
- Review the length of all terms of all existing Deferred Prosecution Agreements and Non-Prosecution Agreements to determine if they remain necessary or should be terminated early.
- Implement systems to monitor case progress and prevent prolonged investigations.
Key takeaways
The Criminal Division’s white-collar crime enforcement strategy under the Trump Administration suggests a deliberate shift that may prove favorable to companies ensnared in DOJ investigations, although there is the possibility that U.S. companies will fare better than non-U.S. entities. Companies and individuals should nonetheless anticipate robust white-collar enforcement efforts, but in changing ways:
- A refocusing of resources on cases that have national security implications, cases that impact the Administration’s stated priorities (such as immigration), and cases that create risk to the government’s economic interests (such as procurement fraud).
- A shift away from multi-year, compliance focused investigations and monitorships.
- A shift toward faster, more attention-grabbing investigations.
While some have suggested that there will be far less white-collar enforcement overall (and any reduction in resources will likely have some impact in that direction), these shifts in priorities suggest corporations should be cautious when internal stakeholders suggest there is room to take greater risk than in prior periods of heightened corporate enforcement environment. Indeed, as with many aspects of this administration in its early months, there is considerable uncertainty about how this Memo will be applied in practice, but the Memo suggests that companies choosing to self-disclose potential misconduct may receive a more expedient and focused investigation, as well as more favorable treatment by the DOJ compared to prior administrations.
Ultimately, however, how the DOJ will implement its white-collar enforcement strategy remains to be seen, and market events, along with the specific facts and circumstances of each case, will, as always, undoubtedly play a significant role in how this strategy is applied.
