Posted On Friday, October 26, 2012
On October 25, 2012, Pietragallo’s Jim Kraus presented and moderated a panel discussion reviewing trends in government enforcement and prosecution in the ten years that have passed since the passage of the Sarbanes-Oxley Act (SOX) of 2002. The panel, which also included Scott A. Coffina of Drinker Biddle & Reath, LLP and Jose P. Sierra of Fish and Richardson, PC, discussed the practical impact of the changing landscape of government enforcement, providing both historical perspective and analysis of current trends in the “policing” of corporate governance by both government regulators and DOJ.
The panel discussion was presented in conjunction with the Defense Research Institute’s Annual Meeting in New Orleans, October 24-27. The backdrop of the discussion included historical perspective as demonstrated by the highly publicized fraud cases involving Enron, Tyco and Worldcom which gave rise to the legislative push that resulted in SOX, as well as the economic crisis of 2008, which spawned even more legislative and regulatory initiatives, notably the Dodd-Frank Act of 2010.
The panel discussed current application of DOJ’s Principles for Prosecutions of Business Organizations, recent regulatory actions against and prosecutions of corporate officers, and the impact of enhanced whistleblower provisions under both the False Claims Act and Dodd-Frank.
The panel also provided updates regarding trends in DOJ’s enforcement of the Foreign Corrupt Practices Act (FCPA) and recent developments in enforcement of the False Claims Act against pharmaceutical and medical device manufacturers for off-label marketing.
Posted On Friday, October 19, 2012
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On October 18, 2012, three former financial services executives were sentenced in the U.S. District Court for the Southern District of New York for their involvement in conspiracies related to bidding for municipal finance contracts. The three were convicted after a three week trial and have been ordered to serve sentences ranging from 36 to 48 months in prison.
During the trial, the government presented evidence that the three defendants, who had been employed by affiliates of General Electric Company, participated in separate fraud conspiracies with various financial institutions and insurance companies from 1999 until 2006. The financial institutions and insurance companies offered investment agreements to state, county, and local governments throughout the United States as a way to raise money for public works projects. The government claimed that the defendants and their co-conspirators manipulated the bidding process for many investment agreements to increase the number and profitability of investment agreements awarded to their employers. The conspiracy deprived state, county, and local governments from more competitive interest rates for the investments, which, in turn, is alleged to have cost the municipalities millions of dollars.
Richard Weber, Chief of the IRS’s Criminal Investigation division, stated “The sentences handed down today send a clear message that crime motivated by outright greed will land you in jail. Quite simply, the defendant stole money from taxpayers and conspired to manipulate the competitive bidding system to benefit themselves instead of the towns and cities that needed this money for important public works projects. IRS Criminal Investigation is committed to working with our law enforcement partners to uncover this kind of abruption and secure justice for American taxpayers.” In this investigation, twenty individuals have been charged, including the three defendants sentenced on October 18.
