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.

U.S. Government Should Champion Foreign-Commerce Authority in Washington Export Terminal Legal Dispute

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Port of Longview, WA

Lighthouse Resources, Inc. v. Inslee, a federal lawsuit of great national consequence pending in the U.S. District Court for the Western District of Washington (here and here are our past posts on it), has reached a critical point after a year of pre-trial developments. In its January 3, 2018 complaint, Lighthouse Resources (LHR) and BNSF Railway (which intervened as a plaintiff) allege that several Washington State officials, including Governor Jay Inslee, violated the U.S. Constitution and federal laws by blocking approval of a water-port terminal in Longview, Washington. Earlier this month, the plaintiffs moved for partial summary judgment on their claim that the officials intruded on the U.S. government’s exclusive authority over foreign commerce.

Given the lawsuit’s enormous implications for the American economy and federal foreign-affairs power, the U.S. government should file a “statement of interest” with the court urging it to enjoin Washington’s actions. Those actions—motivated, LHR and BNSF assert, by state officials’ desire to block foreign sales of a single disfavored commodity, coal—contravene a federal directive encouraging U.S. exports of energy resources to U.S. allies in Asia. Continue reading “U.S. Government Should Champion Foreign-Commerce Authority in Washington Export Terminal Legal Dispute”

Justice Department Revisits the Wire Act but Stays Enforcement, for Now

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.

On January 14, 2019, the Department of Justice quietly released a new Office of Legal Counsel (OLC) opinion that sent shockwaves through the internet gambling industry. The opinion purports to reverse OLC’s longstanding interpretation of the federal Wire Act, clarifying that the law applies to all forms of wagering activity that crosses state lines, not just sports betting. The Deputy Attorney General quickly followed up this surprising development with a memorandum directing federal prosecutors to refrain from applying this new interpretation in criminal or civil actions for a period of 90 days. Continue reading “Justice Department Revisits the Wire Act but Stays Enforcement, for Now”

DOJ Modifies Policy on Credit for Cooperation by Corporate Employees

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.

Following an internal review of the Department of Justice’s policy concerning individual accountability in corporate cases, Deputy Attorney General Rod Rosenstein recently announced significant changes to the policy. Under the new policy, DOJ will treat civil cases differently than criminal cases when evaluating a corporation’s cooperation in an investigation. This change is a modification of the 2015 policy memo issued by then-Deputy Attorney General Sally Yates that required DOJ lawyers to investigate any individuals responsible for illegal corporate conduct before settling a case. The modified policy restores the discretion of DOJ attorneys in civil cases to approve settlements without investigating every individual corporate employee who might potentially be responsible for the illegal conduct. Continue reading “DOJ Modifies Policy on Credit for Cooperation by Corporate Employees”

DOJ Expands FCPA-Violation Self-Disclosure Incentive to the Health Care Industry

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 Erin M. Eiselein, a Shareholder in the firm’s Denver, CO office.

It has been a busy few months for the Fraud Section of the Department of Justice (“DOJ”) as the section continues its road show to educate the health care community on its recent Foreign Corrupt Practices Act (“FCPA”) guidance. As has been widely reported, DOJ announced a new policy (which took effect immediately) of applying its FCPA Corporate Enforcement Policy to health care companies. DOJ has focused considerable enforcement resources lately on health care companies’ alleged payment of bribes to foreign officials. Continue reading “DOJ Expands FCPA-Violation Self-Disclosure Incentive to the Health Care Industry”

DOJ Issues New Guidance on Corporate Monitors Reflecting More Pragmatic Approach

White Collar Crime & Corporate Compliance

Brower_GregGarnettStanGregory A. Brower, a Shareholder with Brownstein Hyatt Farber Schreck, LLP in Las Vegas, NV and Washington, DC, with Stanley L. Garnett, a Shareholder in the firm’s Denver, CO office.

In an October 12 speech at the NYU School of Law last Friday, the head of the Department of Justice’s (DOJ) Criminal Division announced a policy memo that sets forth the department’s new process for the approval of corporate monitorship agreements and the selection of monitors. Assistant Attorney General for the Criminal Division Brian A. Benczkowski explained that the new policy follows a recent review of DOJ’s corporate enforcement policies led by Deputy Attorney General Rod Rosenstein. Continue reading “DOJ Issues New Guidance on Corporate Monitors Reflecting More Pragmatic Approach”

U.S. Makes Unprecedented Arrest of Chinese Government Official Accused of Economic Espionage

Brower_GregMoschellaWilliamE@2xFeatured 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.

The Department of Justice (DOJ) recently announced an indictment charging a Chinese government official with attempting to steal trade secrets and other sensitive information from an American aerospace company.  This is not the first indictment of its kind.  In fact, in announcing the indictment, Assistant Attorney General John Demers remarked that “[t]his is not an isolated incident.”  He explained that this case “is part of an overall economic policy of developing China at American expense.”  What makes this case unique is that fact that the Chinese defendant is now in U.S. custody after being extradited from Belgium.  Continue reading “U.S. Makes Unprecedented Arrest of Chinese Government Official Accused of Economic Espionage”