Gary Grindler, the second-highest ranking official at the U.S. Justice Department, will talk about the department’s policy goals and initiatives to fight corporate fraud, including white-collar crime issues such as securities and commodities fraud, healthcare fraud, and the work of the Financial Fraud Enforcement Task Force.
These are my notes, live from the keynote:
Lots of the thoughts about the Department of Justice are about how to stay away from the Department of Justice.
The DOJ is taking some new steps related to discovery. They are designating attorneys in each office on discovery practices and in particular e-discovery.
There is a new financial fraud enforcement task force brought together. President Obama established the Financial Fraud Enforcement Task Force in November 2009 to hold accountable those who helped bring about the last financial crisis, and to prevent another crisis from happening. With more than 20 federal agencies, 94 US Attorneys Offices and state and local partners, it’s a broad coalition of law enforcement, investigatory and regulatory agencies assembled to combat financial fraud. It’s a broad definition of financial fraud: mortgage scams that target the elderly, Ponzi schemes that shock the world, tax fraud that steals money from our nation’s coffers, predatory lending that discriminates against vulnerable communities, credit card fraud that strikes broadly, and the list goes on.
The next focus is health care fraud. They assembled a Health Care Fraud Prevention & Enforcement Action Team. (Yes, HEAT.) The group has brought the heat, with a big record of success, convictions and fraud deterrence. They have returned over $13 billion to the Medicare Trust fund. In Miami alone, they reduced the amount of durable medical device expenditures in Miami by over $1.7 billion.
The next priority he mentioned was intellectual property crime.
Besides these, there are many other priorities. These three are just the ones he thought most relevant to this crowd.
He emphasized the importance of an effective compliance program. They can’t just be paper compliance programs. He also highlighted the recent changes to the US Sentencing Guidelines. One new aspect is that after an “event” the organization needs to evaluate its program and amend it to prevent that kind of event.
What about a company’s cut in a compliance program’s budget?
If a budget reduction is indicative of a lack of interest in compliance, then that’s bad. He seemed understanding that a reduction in revenue means there will be budget cuts across the company.
What does an inadequate compliance program look like?
No compliance program is at the far extreme. Indifference to a compliance program. Senior leadership not promoting the compliance program. They see this a lot in FCPA cases.