Update: Pre-Approval Requirements Announced for Federal Wire Act Prosecutions

Featured Expert Contributor, White Collar Crime & Corporate Compliance

Gregory A. Brower, a Shareholder with Brownstein Hyatt Farber Schreck, LLP in Las Vegas, NV and Washington, DC, with William E. Moschella, a Shareholder in the firm’s Washington, DC office.

We recently posted about the Department of Justice’s new take on what the federal Wire Act says and does not say, and noted the Deputy Attorney General’s issuance of a memorandum instructing Department prosecutors to refrain from applying OLC’s new interpretation in criminal or civil actions until April 15, 2019.  As a next step toward clarifying its Wire Act enforcement policy going forward, DOJ has announced an update to the Justice Manual (formerly known as the U.S. Attorneys Manual) to include a new provision requiring federal prosecutors in the 93 U.S. Attorneys offices to obtain Main Justice approval before initiating any criminal prosecution under the Wire Act (18 U.S.C. § 1984).  The new requirement is found in the Justice Manual at new § 9-110.901, and provides as follows:

No criminal prosecution under 18 U.S.C. § 1084 shall be initiated by indictment, information, or complaint without the prior approval of the Organized Crime and Gang Section (OCGS). All requests for approval must be submitted at least 7 days in advance and accompanied by a prosecution memorandum and final proposed indictment, information, or complaint.

This new policy suggests an intent on the part of DOJ leadership to take a measured, deliberate, and consistent approach to Wire Act prosecutions.

Moreover, it is likely that before the Department approves any such prosecutions, it will wait to see the outcome of two federal lawsuits now pending in New Hampshire.  In one of those cases, the company that provides New Hampshire’s state lottery platform is seeking a declaration from the federal district court that the Wire Act prohibits only sports-betting-related activities.  The complaint in that case alleges that the reasoning of the new OLC opinion is “deeply flawed” and contradicts the holdings of two separate federal courts of appeals.  Specifically, the complaint argues that OLC “ignored key structural features of the statute, all of which indicate a limited scope,” and “neglected the substantial legislative history of the Wire Act, all of which points to a narrow understanding and purpose of the Act.”

This all makes for a fascinating case study in the intersection of legislative intent, statutory interpretation, and prosecutorial discretion.  Stay tuned.