Fraud Eats Strategy

On inauguration day, President Trump rescinded numerous Executive Orders from prior administrations including one in which appointees within each Executive Branch Agency was required to sign a pledge not to accept gifts from lobbyists, recuse themselves from matters related immediate former employers or clients for 2 years, and not to participate in any matter for which they lobbied the government as a registered lobbyist for 2 years. The pledge also required appointees upon leaving government not to communicate with their former agency or senior White House Senior Staff for 2 years, not to assist others to do so, not to lobby the U.S. government or on behalf of a foreign government or political party, not to accept a golden parachute payment coinciding with the acceptance of an appointment and to make employment decisions on their merits. The President has made a series of unorthodox appointments to head major government agencies including people who have publicly advocated for disbanding and/or radically changing those agencies and calling them “irredeemably corrupt” or other extremely derisive terminology. Also on inauguration day, the President pardoned ~1500 January 6th rioters and commuted the sentences of 14 others. Then, the DOJ mandated that the FBI turn over the names of all FBI personnel who participated in the January 6th investigations and fired or threatened to fire anyone who refused to comply. This was preceded by over a dozen firings of senior FBI and DOJ officials who played a substantive role in the January 6th investigations and prosecutions. Ultimately, the names of ~5000 FBI personnel were turned over without much assurance that their names wouldn’t be publicly released posing genuine safety concerns. But perhaps the biggest body blow to the federal law enforcement community came on January 24, 2025 when President Trump fired 16 inspectors general of the 16 largest, most complex U.S. government agencies and a 17th, the IG for USAID Paul Martin, 2 weeks later. In case that purge wasn’t enough to upend the government’s ability to police itself, Hampton Dellinger, the head of the Office of Special Counsel and David Huitema, Director of the Office of Government Ethics were also fired. And the upheaval continues unabated.

A discussion on China's state-sponsored theft of intellectual property from the U.S. and other leading economies with guest Frank Figliuzzi. Frank is a national security contributor and regular columnist for NBC News and MSNBC. He was the assistant director for counterintelligence at the FBI, where he served 25 years as a special agent and directed all espionage investigations across the government. He is the author of “The FBI Way: Inside the Bureau’s Code of Excellence”, and his most recent book "Long Haul: Hunting the Highway Serial Killers."

“It's better to keep your mouth shut and appear stupid than open it and remove all doubt”. Certainly, this quote, who depending on who you ask is attributable to Mark Twain, Abraham Lincoln or Confucius, is a great way to encapsulate the importance of crisis communications. We have all seen examples of how things can go from bad to worse when someone steps to the podium during a crisis that is unfolding and makes public pronouncements without first gathering the facts. Mishandling crisis communications can shift the focus away from the crisis at hand and make the company’s handling of the crisis the bigger story. Crisis communications is a critically important tool in the company’s arsenal during a high-profile investigation.

Some human beings are wonderful. Some are middle of the road and some are truly terrible. Terrible human beings are frequently indistinguishable from wonderful ones. How can we tell them apart? In the context of business relationships, the tip of the compliance spear in attempting to separate the good from the bad is frequently open source intelligence investigations. Sometimes referred to as investigative due diligence or background investigations, this investigative tool can be a game changer when it comes to counterparty risk. Since leaving the FBI in 1996, I have overseen tens of thousands of such investigations and have designed and implemented programs to risk rank counterparties and perform investigative due diligence of customers, borrowers, investment targets, vendors and intermediaries commensurate with their potential risk.

Successor liability under the Foreign Corrupt Practices Act has been a risk for companies since the statute was first enacted. But until recently, the DOJ and SEC have been deliberately vague in terms of the guidance offered and their expectations about FCPA due diligence and the time imperatives surrounding post-merger integration as it relates to combining compliance programs. That all changed in October of 2023 when Deputy Attorney General Lisa O. Monaco announced the implementation of DOJ’s Safe Harbor Policy for voluntary self-disclosures made in connection with Mergers and Acquisitions. Put succinctly, DAG Monaco said “we want to incentivize the acquiring company to timely disclose misconduct uncovered during the M&A process.” She further announced: “Going forward, acquiring companies that promptly and voluntarily disclose criminal misconduct within the Safe Harbor period, and that cooperate with the ensuing investigation, and engage in requisite, timely and appropriate remediation, restitution, and disgorgement – they will receive the presumption of a declination. Of particular note is that in order to qualify for the Safe Harbor, companies must disclose misconduct discovered at the acquired entity within six months from the date of closing. That applies whether the misconduct was discovered pre- or post-acquisition.

In this episode we have an ambition agenda. We are going to provide a high level overview of virtual currencies, blockchain technology and the vital role of crypto exchange, touch upon some spectacular failures in the crypto space, how the incidence of crypto crime is going down and the role that exchanges like Binance are playing in the mitigation of crypto crime.

Human trafficking is the fastest-growing transnational crime with more than 25 million people held in forced labor and sexual exploitation. As if these numbers aren't horrifying enough, 10 million of those trafficked people are children, and yet rarely are US organizations focused on human trafficking's impact on their operations, much less society as a whole. In fact, most of us consider human trafficking to be a problem occurring in developing countries and that there are more pressing issues that should demand our attention and compliance resources. That false narrative is part of what makes human trafficking so difficult to counter.

In Part 2 of this series we continue the conversation of how to bring order to the chaos of the early days of an FCPA investigation. For more information visit whitecollarforensic.com