Best Practices During an FCPA Enforcement Action: The Armor Holdings NPA | Thomas Fox – JDSupra

We will give some detail to the books and records scheme used by the company to disguise its bribes and then detail some of the factors listed by the DOJ in its Press Release (the NPA is not available as of the posting of this blog). These factors listed by the DOJ clearly show that a sustained, committed effort to cooperate with the DOJ and SEC in the investigation, coupled with a robust remediation program going forward can significantly help a company overcome what may appear to be clear facts which would seem to warrant a criminal penalty, in addition to a civil action.

via Best Practices During an FCPA Enforcement Action: The Armor Holdings NPA | Thomas Fox – JDSupra.

DOJ: We can force you to decrypt that laptop | CNET News

The Colorado prosecution of a woman accused of a mortgage scam will test whether the government can punish you for refusing to disclose your encryption passphrase.

The Obama administration has asked a federal judge to order the defendant, Ramona Fricosu, to decrypt an encrypted laptop that police found in her bedroom during a raid of her home.

Because Fricosu has opposed the proposal, this could turn into a precedent-setting case. No U.S. appeals court appears to have ruled on whether such an order would be legal or not under the U.S. Constitution’s Fifth Amendment, which broadly protects Americans’ right to remain silent.

In a brief filed last Friday, Fricosu’s Colorado Springs-based attorney, Philip Dubois, said defendants can’t be constitutionally obligated to help the government interpret their files. “If agents execute a search warrant and find, say, a diary handwritten in code, could the target be compelled to decode, i.e., decrypt, the diary?”

To the U.S. Justice Department, though, the requested court order represents a simple extension of prosecutors’ long-standing ability to assemble information that could become evidence during a trial. The department claims:

Public interests will be harmed absent requiring defendants to make available unencrypted contents in circumstances like these. Failing to compel Ms. Fricosu amounts to a concession to her and potential criminals (be it in child exploitation, national security, terrorism, financial crimes or drug trafficking cases) that encrypting all inculpatory digital evidence will serve to defeat the efforts of law enforcement officers to obtain such evidence through judicially authorized search warrants, and thus make their prosecution impossible.

Prosecutors stressed that they don’t actually require the passphrase itself, meaning Fricosu would be permitted to type it in and unlock the files without anyone looking over her shoulder. They say they want only the decrypted data and are not demanding “the password to the drive, either orally or in written form.”

The question of whether a criminal defendant can be legally compelled to cough up his encryption passphrase remains an unsettled one, with law review articles for at least the last 15 years arguing the merits of either approach. (A U.S. Justice Department attorney wrote an article in 1996, for instance, titled “Compelled Production of Plaintext and Keys.”)

via DOJ: We can force you to decrypt that laptop | Privacy Inc. – CNET News.

The Dodd-Frank Act’s Robust Whistleblowing Incentives – Ben Kerschberg – Law & Technology – Forbes

The Securities Exchange Commission (“SEC”) settled three securities cases in July 2010 worth $550 million, $100million, and $75 million, respectively. Last year alone, the SEC and the Department of Justice (“DOJ”) settled three cases involving claims of corruption under the Foreign Corrupt Practices Act (“FCPA”). Those cases settled for $450 million, $300 million, and $200 million, respectively. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), whistleblowers who bring violations of securities law, commodities law, or the FCPA to the attention of the proper government authorities—the SEC, DOJ, or Commodities Futures Trading Commission—are entitled to between 10% to 30% of any government recovery in excess of $1 million. The SEC considers three factors in determining what percentage to give the whistleblower: (i) the significance of the information; (ii) the degree of assistance provided by the whistleblower; and (iii) the extent to which the government wants to deter the violations in question. Even at the low end of the range—assume that Whistleblower (X) receives 10% of an award of $1.1 million—that can be quite a bounty, as it has become known in Dodd-Frank Act circles.

via The Dodd-Frank Act’s Robust Whistleblowing Incentives – Ben Kerschberg – Law & Technology – Forbes.

Surviving e-Discovery With the Department of Justice’s Antitrust Division – Ben Kerschberg – Law & Technology – Forbes

The Department of Justice (“DOJ”) has aggressively requested the electronic production of corporate data over the past decade. The Antitrust Division is a perfect example, having experienced exponential growth in the amount of discovery and information that it receives in response to Second Requests. In turn, the Division’s spending on electronic storage capacity has increased in order to accommodate a six-fold increase in necessary memory between 2003 and 2010 alone.

The Antitrust Division is also a part of an internal DOJ working group that addresses e-discovery issues in civil matters. Every civil section and its respective litigation support staff participates in the group in order to uncover and implement best practices. The working group is designed not just to provide internal guidance to DOJ staff attorneys responsible for negotiating Second Requests and Civil Investigative Demands (“CIDs”), but also, according to DOJ “to provide detailed guidance to law firms and their electronic production vendors about the optimal way to produce electronic data and documents to the Division . . . to ensure that parties can avoid producing data multiple times and that the production is in a format that [can] be reviewed promptly.”

DOJ understands that e-discovery guidelines must to a great extent be industry specific given that companies in similar industries tend to use and store electronic data in similar ways.  As DOJ gains expertise related to such industry usage and establishes a pattern of addressing issues common to different investigations in the same manner over time, the lives of outside counsel inevitably will become easier. The Antitrust Division now sends an Electronic Production Letter to counsel to address a variety of electronic production issues. This Letter should serve as a baseline of issues for counsel to address early in negotiations with the Division staff. Although the Letter is a reliable benchmark, the Division will in some cases deviate from it depending on necessities raised by specific issues in any given investigation.

via Surviving e-Discovery With the Department of Justice’s Antitrust Division – Ben Kerschberg – Law & Technology – Forbes.

DOJ may pounce on Google’s ITA acquisition – Computerworld

The U.S. Department of Justice is looking into challenging Google’s plan to buy travel software company ITA Software, according to reports.

The DOJ is putting together the necessary paperwork but lawyers there have yet to decide whether there are sufficient antitrust concerns to proceed with a court case, the Wall Street Journal reported today, citing unnamed sources.

The Justice Department is expected to decide whether to take the matter to court by the end of this month or in early February, the Journal noted.

Google announced its plan to acquire ITA last July.

ITA is a travel-software company that supplies popular Internet airline-ticket search and booking sites, such as Orbitz, Southwest Airlines and American Airlines. The Cambridge, Mass.-based company was founded in the mid-90s by MIT computer science graduates.

The government regulators might oppose the deal because ITA’s products are used in the systems of many online travel agencies and airlines.

via DOJ may pounce on Google’s ITA acquisition – Computerworld.

U.S. subpoenas Twitter for Wikileaks info – Computerworld

The U.S. Department of Justice served Twitter with a subpoena seeking information about the accounts of the Wikileaks organization, its founder Julian Assange and other members and supporters, according to Twitter posts from people involved and documents published by Salon.com.

The DOJ sent Twitter the subpoena on Dec. 14, but it remained sealed until Jan. 5 when a judge granted Twitter’s request that it be allowed to notify the users whose records had been requested.

Copies of the documents were posted by Salon.com late Friday night.

The DOJ wants information dating back to Nov. 1, 2009, about Twitter user names, messages, physical and e-mail addresses, Twitter session times, IP addresses and credit card and bank account information.

via U.S. subpoenas Twitter for Wikileaks info – Computerworld.

Is DOJ Doing Too Much, or Not Enough, to Combat Foreign Bribery? – Law Blog – WSJ

The FCPA was all the rage in the Beltway today as the Senate took a hard look at DOJ’s enforcement practices.

One question from Arlen Specter, the FCPA blog points out, is why no one is going to jail for the biggest cases of overseas bribery, such as the massive Siemens scandal. No one has been indicted in the U.S. in the Siemens case, despite the fact that DOJ uses it as its poster child for its ramp up in cracking down on foreign corruption. (Click here for prior LB coverage of the case.)

“Criminal fines are added to the costs of doing business,” Specter said. “Going to jail is what works to deter crime.”

On the flip side, defense lawyers told members of the Senate Judiciary Committee that U.S. companies are spending too much money worrying they might unintentionally flout the FCPA, according to this report in the LegalTimes’s BLT blog.

Mayer Brown partner Michael Volkov and Jenner & Block partner Andrew Weissmann said companies get too little credit for trying to comply with the law. They asked that the law be amended.

LegalTimes said Weissmann proposed that Congress create a defense under the FCPA for companies whose employees violate established anticorruption policies and have compliance programs in place.

For his part Greg Andres, an acting deputy assistant attorney general, said self-disclosure and cooperation don’t merit immunity.

“We don’t believe that immunity is appropriate, just as we believe immunity is not appropriate for a bank robber who discloses that he robbed a bank,” Andres said.

via Is DOJ Doing Too Much, or Not Enough, to Combat Foreign Bribery? – Law Blog – WSJ.

DOJ Strengthening Its Fraud Section, Wiretap Unit – Corruption Currents – WSJ

The use of wiretaps in the Galleon insider-trading case and the FBI’s undercover work in the “Shot Show Takedown” this year threw into sharp relief the Justice Department’s willingness to apply the same gritty investigatory techniques it uses to fight mobsters to combat white-collar crime.

The government’s investigation of Raj Rajaratnam, the co-founder of the hedge fund Galleon Group, marked the first time the department used a wiretap in an insider-trading case. (Rajaratnam is fighting to keep the wiretap evidence out of court, saying the department obtained the warrants through misdirection.)

The FBI’s arrest in January of 22 men in the military and police equipment on suspicion of violating foreign bribery law represented the first sting operation, with undercover agents and a government informant, in a Foreign Corrupt Practices Act investigation. (Some of the defendants have indicated they will argue entrapment.)

Assistant Attorney General Lanny Breuer, head of Criminal Division, promised Thursday that these techniques would be commonplace in white-collar cases going forward.

The department, he said, has “substantially increased” the number of lawyers who work in the division’s Office of Enforcement Operations, the unit that reviews and approves applications for federal wiretaps around the country.

“As a result, the number of wiretaps we authorize – in all types of cases – has gone up,” Breuer said Thursday during a speech at the Practising Law Institute in New York City, according to his prepared remarks.

via DOJ Strengthening Its Fraud Section, Wiretap Unit – Corruption Currents – WSJ.

Google Receives ‘Second Request’ From DOJ On ITA Acquisition – WSJ.com

Google Inc. (GOOG) said Friday it had received a “second request” for more information from U.S. regulators looking at its pending $700 million acquisition of flight information software company ITA Software Inc.

The Internet search giant, however, said in a blog post it remained “confident” the Department of Justice will conclude that the online travel market will remain competitive after the acquisition closes.

via Google Receives ‘Second Request’ From DOJ On ITA Acquisition – WSJ.com.

Double standard for pharma bribes | CNN Money

Legally, of course, companies can’t bribe anyone to do anything, whether the kickback is taking place on domestic or international grounds. But the act that guides the Department of Justice’s international jurisdiction — called the Foreign Corrupt Practices Act (FCPA) — specifically prohibits bribery to officials of foreign governments to procure business.

That law, however, creates a strange quirk in the system, thanks to the predominance of state-run health care world wide: many doctors in other countries are considered government employees. Thus, the DOJ has launched several investigations into the world’s largest pharmaceutical companies for FCPA violations. If any of these companies are found guilty of bribery, it could be a good opportunity for the DOJ to take a fresh look at routine interactions between doctors and drug companies back here in the United States.

via Double standard for pharma bribes – Aug. 17, 2010.