Financial Crime World

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DOJ Prioritizes Financial Crimes, Sanctions Enforcement, and Foreign Bribery

In a move to crack down on misconduct, the Department of Justice (DOJ) has announced its continued focus on financial crimes, sanctions enforcement, and foreign bribery. This comes as part of a broader effort to hold individuals and corporations accountable for their actions.

Sanctions Enforcement Takes Center Stage

The DOJ’s Deputy Attorney General recently emphasized the importance of sanctions enforcement, stating that “sanctions are the new FCPA” - a reference to the Foreign Corrupt Practices Act. The agency has committed additional resources to the National Security Division to prosecute corporate crime, including sanctions evasion and export control violations.

Foreign Bribery Enforcement Also on the Rise

The passage of the Foreign Extortion Prevention Act (FEPA) in December 2023 has given federal prosecutors new tools to combat foreign bribery. FEPA makes it illegal for foreign officials to demand or accept bribes from U.S. citizens, companies, or residents in exchange for obtaining business.

SEC and CFTC No-Admit/No-Deny Policies Under Scrutiny

The Securities and Exchange Commission (SEC) has maintained its policy of allowing companies and individuals to enter into resolutions without admitting or denying wrongdoing. However, the Commodity Futures Trading Commission (CFTC) has announced a change in its no-admit/no-deny policy, stating that admissions may be necessary in certain cases.

Cryptocurrency Enforcement on the Rise

The cryptoasset space has been a focus for DOJ and civil enforcement agencies in 2023, with several high-profile cases and convictions. The agency has indicted individuals for fraud schemes related to cryptocurrency exchanges and charged companies with violating anti-money laundering laws.

What’s Next?

As we move into 2024, it’s clear that financial crimes, sanctions enforcement, and foreign bribery will remain priority areas for the DOJ. Expect more criminal and civil enforcement actions as the year progresses. Additionally, courts and regulators will continue to grapple with how cryptocurrency should be treated under securities and commodities laws.

Timeline of Key Events

  • February 2023: SEC charges Kwon Do Heyong, co-founder and CEO of Terraform Labs, with defrauding investors out of billions of dollars.
  • March 2023: SDNY indicts Do Kwon and begins to seek his extradition to the United States.
  • July 2023: SDNY indicts Alexander Mashinsky, founder and CEO of Celsius, for various fraud schemes.
  • August 2023: SDNY indicts two co-founders of Tornado Cash with money laundering and sanctions violations.
  • January 2024: DOJ announces indictment of individuals for operating an alleged $1.89 billion crypto-fraud scheme involving HyperFund, and SEC announces parallel charges.

Conclusion

The DOJ’s prioritization of financial crimes, sanctions enforcement, and foreign bribery is a clear indication that the agency will continue to crack down on misconduct in 2024. As we move forward, expect increased activity from both criminal and regulatory enforcement agencies.