White Collar & Government Investigations Blog

Not so long ago, foreign corruption prosecutions was the cause celebre of the U.S. Department of Justice (“DOJ”), with the DOJ quadrupling its staff and sharply increasing the number of FBI agents focused on the Foreign Corrupt Practices Act (“FCPA”) investigations and prosecutions over a more than 10 year period beginning in or about 2010.  Numerous foreign and domestic individuals and companies were ultimately charged with violating this extraterritorial law, including individuals from Brazil (in Operation Lava Jato ), Norway, Africa and throughout Asia.  However, since Russia’s invasion of Ukraine in February 2022, the FCPA has no longer been the primary foreign focus for cross border enforcement and has given way to an emphasis on foreign sanctions under the Department of the Treasury, Office of Foreign Assets Control (“OFAC”), most particularly the Russian Harmful Foreign Activities Sanctions issued under Executive Order 14024 and others beginning on February 23, 2022 and beyond. Since then, numerous blocked persons (“SDNs”) have been added to OFAC’s sanctions list on a frequent basis. Most recently, on June 12, 2024 and again on July 3, 2024, the Treasury and State Departments, through OFAC, together with the US Department of Commerce’s Bureau of Industry & Security (“BIS”) have doubled down on Russian sanctions, issuing fresh rounds of sanctions seeking to weaken the Russian “war time economy” and choke off the Russian financial system from the rest of the world, through clamping down further on Foreign Financial Institutions (“FFIs”) and on Information Technology (“IT”), sensitive technology and transportation.

On Memorial Day weekend 2023, an Olshan client was traveling from Canada in his car with his son to take a vacation in the U.S. They were driving over the Canadian – U.S. border at Blaine, Washington and were stopped at the border and subject to a random vehicle inspection by the Department of Homeland Security (“DHS”), U.S. Customs and Border Protection (“CBP”).  Without a specific concern, a random routine inspection nevertheless turned into a full blown search of the car, where border agents removed and inspected all of the contents of the vehicle and searched the vehicle itself for more than 2 hours, eventually finding a small prescription medication bottle in the client’s dopp kit in his luggage. The investigation report noted that there were 5 or 6 tablets in the prescription bottle that contained, amongst other medicinal ingredients, a low level of THC (marijuana).  After the find, a young border agent detained the client, and interviewed and interrogated him for several hours, ultimately accusing him of violating the Controlled Substances Act for transporting a Category I Controlled Substance (Marijuana) across the border. Despite the legalization of marijuana in a number of U.S. states, the agent required the client to continue to remain in detention at the border crossing while agents typed up a lengthy and detailed confession statement and “offered” the client to sign it.  The client felt he had no choice but to sign the form. Ultimately, despite acknowledging that the meds were a prescription to treat an ailment and pain, and that the THC levels were low, the client was denied entry into the U.S., and formally denied admissibility and expelled. The client’s son was allowed to continue his journey, and the client was left at the border, stranded. The client was listed as having been determined inadmissible for entry into the U.S. and was now required to obtain a waiver if he wished to enter the U.S. in the future. A waiver is obtained through the filing of an I 192 entry form well in advance of any travel. Without the waiver and a full grant of an I 192 application, the client would be denied at entry and would not be allowed to board any flight to the U.S.

In a number of recent high profile cases, the U.S. Department of Justice’s Fraud Section, together with agents from the U.S. Postal Inspection Service, have been targeting fraudulent mail solicitations scams in the U.S. On May 31, 2024, a federal jury in Colorado returned guilty verdicts against two former senior officers of the Epsilon corporation who were charged with selling consumer lists to fraudsters targeting the elderly and vulnerable. The consumer mailing lists provided by the executives to the fraudsters were then used to send scam letters to the victims promising large prizes or falsely personalized astrological mailings promising wealth.  In order to convict, the jury had to find that the two executives knew that the mailing lists would be used in the fraud scams. The case represents an expansion by the government in the scope of those charged in false mailing schemes, beyond the actual perpetrators, seeking to charge all those who knowingly aid and abet these schemes, and not just the mailers.