DOJ’s New Mantra — Data and Detection
The technology revolution and the rise of information and data permeates every aspect of our economy and daily lives. It is not surprising then that the Department of Justice and other law enforcement agencies are embracing data analytics as a new enforcement tool. DOJ is fast embracing data as a new and valuable source of detection.
When DOJ issues a grand jury subpoena, this is often the beginning of an expensive and risky criminal investigation with serious consequences for companies. This goes without saying.
DOJ has access to several significant sources of information to identify future subjects of investigation.
DOJ has a stable of cooperating witnesses in the white collar arena who have valuable intelligence and often provide significant leads. But DOJ is moving beyond this human intelligence and focusing on valuable data sources.
DOJ’s FCPA Unit has hired an expert in this area to help prosecutors identify cases based on public and government data. Relying on various sources of information, DOJ is scrubbing data and finding important leads. For example, the Treasury Department maintains a large database of Suspicious Activity Reports (SARs) filed by banks and other financial institutions that includes specific transaction details.
DOJ already has access to procurement data involving foreign governments and state-owned enterprises. The Commerce Department has coordinated with the Treasury Department to identify financial transactions involving evasion of Russian sanctions regimes. DOJ is mining all of this data to identify potential transactions involving bribery, sanctions or money laundering risks.
DOJ has built a formidable international network of prosecutors and law enforcement among whom information and intelligence is shared. As more relationships are established, DOJ’s access to leads and potential parallel investigation data is growing. This is a significant source for DOJ to identify potential leads for further investigation.
In yet another initiative in this area, DOJ recently announced a new International Corporate Anti-Bribery Initiative, which builds on DOJ’s existing bilateral and multilateral partnerships. DOJ has assigned three prosecutors to this initiative and they will inevitably generate and collect investigation leads, resulting in more prosecutions overseas and in the United States. These synergistic relationships extend beyond foreign bribery and will include anti-money laundering, fraud and sanctions prosecutions.
DOJ continues to publicize and bend over backwards the benefits flowing from corporate voluntary disclosures. DOJ has recognized that companies are re-evaluating the balance of risks between voluntary disclosure and non-disclosure remediation strategies. This balance is very delicate and DOJ is offering more benefits on the voluntary disclosure side in an attempt to increase corporate self-disclosures to prosecutors.
As DOJ increases its ability to detect and identify potential bribery schemes, companies may have to adjust their disclosure versus non-disclosure positions. On the negative side of the equation, DOJ is requiring companies that earn a declination or a non-prosecution agreement to disgorge any ill-gotten gains from any illegal activity. Whether couched as penalties, disgorgement or forfeiture, companies have to understand the financial consequences of disclosure and cooperation.
Two things are clear — DOJ is building effective international partnerships to generate leads and it is using sophisticated data mining techniques to enhance its ability to identify subjects for investigation. As these trends increase, DOJ is likely to expand its caseload and ongoing investigations — companies have to prepare for this new reality.