Quinn Emanuel Partner Sandra Moser on Prosecuting Corporate Crime Under Trump

The prosecution of corporate crime in the United States has not changed under the Trump administration.

Sandra Moser
Quinn Emanuel
Washington, D.C.

That’s the take of Sandra Moser, who for the past two years was acting chief of the Fraud Section at the Department of Justice.

Last month, Moser joined Quinn Emanuel as a partner in the firm’s Washington, D.C. office.

How did the prosecution of corporate and white collar crime change under the Trump administration?

“Built into your question is the premise that it did change,” Moser told Corporate Crime Reporter in an interview last week. “There has been press and articles speculating and concluding that it did change. But it’s my sincere view that it didn’t change. Even though my last job as head of the Fraud Section had me only reporting up to political appointees, mine was a career position. And everybody who makes up the Fraud Section also occupy career positions. As chief of the Fraud Section, you are managing a group of people akin to the size of the largest U.S. Attorney’s office in the country, but you do not require a political appointment to have that position. It really becomes important to the people there and to the person occupying that job to stay the course, to keep your head down and continue to investigate and prosecute cases, and determining which ones are worthy of opening and pursuing, given the government’s not so vast resources.”

“That’s what I did. That’s the view from the inside. It did not feel different. We did not approach things differently. One thing that certainly affects what you are able to do and how much you are able to do is resources. There has been a hiring freeze since the President took office January 2017. The hiring freeze continues – two years and counting. That doesn’t mean no individuals are being brought on. There are different streams of funding and different ways to try to be entrepreneurial about adding resources. But it is nonetheless a challenge. We didn’t approach things differently at all, except with how we dealt with our resource challenges.”

“If you look at the statistics side of it, you don’t see anything drastically different. If you look at the Fraud Section’s year in review from 2018, the vast majority of the numbers – dollars, prosecutions of individuals – are all up. Prosecutions of corporations, if not up, are certainly holding steady.”

“It is how you slice and dice it. If some of the speculation is looking at the whole hog across the entire nation in every single U.S. Attorney’s office, versus the Fraud Section specifically, there may be a dip in overall numbers. But you have to consider the directives and priorities of each one of those offices and what those priorities have been under this administration. If you are on the border, for example, you have to believe that more of your resources have been dedicated to fighting certain types of offenses more so than white collar crime. I can’t speak to all 96 offices across the country. But I can speak to the Fraud Section.”

At the Fraud Section, you saw no directive or policy change that shifted corporate crime prosecutions one way or the other?

“Certainly, no directive,” Moser said. “As I mentioned before, there have been policy developments that have even been formally memorialized into what now is called the Justice Manual, what was previously called the U.S. Attorney’s Manual. That includes the memorialization of the Foreign Corrupt Practices Act corporate enforcement policy and what is colloquially called the anti-piling on policy.”

“That involves a recognition of the fact that there are many enforcement agencies, not just globally, but often within the Department of Justice, looking at one entity. And you have to be mindful of not piling on when it comes to the penalty phase of a potential corporate resolution.”

What do you foresee forthcoming on FCPA cases?

“It’s going the way of individual enforcement,” Moser said.

“I’ve only been in the defense bar for thirty days so I haven’t completed my conversion therapy and am not that familiar with the criticisms of the defense bar. But there certainly has been criticism in the past that as these investigations take hold, companies may or may not believe that the Department has true proof beyond a reasonable doubt that they can prove in front of a jury, but that there nonetheless is a desire to enter a criminal resolution against the company.”

“Now, you are seeing something good for the practice on both sides of the aisle. You are seeing the FCPA unit making cases against individuals and charging those cases. And you don’t see them all because many remain under seal for very good reasons. Prosecutors are putting themselves through the paces and making clear to those representing the associated entities that there is proof beyond a reasonable doubt, there is a basis under respondeat superior, to hold the entity liable. And it’s not this amorphous – are we relying on collective knowledge, is there anyone with the actual real mens rea level of culpability necessary to carry the day beyond a reasonable doubt in court? Are we just paying to make this go away?”

“That’s not good for the enforcement landscape, even if you are the Department putting in $500 million into the Treasury.”

“It’s consistent with the transparency of the FCPA corporate enforcement policy. It’s good for both sides of the aisle when you see individuals held responsible. There have been four trials in the last 18 to 24 months. And that’s unprecedented when you look at the history of the program. While that is a lot of work for prosecutors and they are very difficult cases to bring and to win, they have been doing it. And that contributes to making law, providing more guideposts to those in corporate community trying to figure out the rules of the road.”

Is that a direct result of the Yates Memo?

“I don’t think it’s the result of the Yates Memo. To anybody who has been a prosecutor for any period of time, the Yates Memo did not represent a sea change. Your job was always to prosecute individuals. That’s all that the vast majority of federal prosecutors in the field do every single day – prosecute individuals. To remind a prosecutor that that should be at the forefront of any prosecutor’s mind was a no brainer.”

“In the corporate context, maybe it served as an important reminder, but it was happening already. What you have seen in the FCPA unit is just the result of leadership over the past number of years in the Section. And that leadership coming from a background of U.S. Attorneys’ offices and holding prosecutors’ feet to the fire. There is not going to be a perception that you are going to bring a case against a corporation in the vast majority of matters where you can’t bring criminal cases against culpable individuals. That can send the wrong message.”

How many prosecutors are in the FCPA unit?

“There has been a hiring freeze for almost two years. The rough number when I left was about close to 35. There are 150 lawyers at the Fraud Section and 300 personnel overall.”

Given the numbers of attorneys at the FCPA unit, why is it such a hot area of attention?

“It undoubtedly has been a hot area for at least five to ten years. And it is only growing. Part of it is driven by a niche defense bar that practices FCPA. That’s a lucrative practice. The investigations are large and sprawling and can be expensive.”

“There is a symbiotic interest from both sides. There is a true principled interest on the part of prosecutors to combat the scourge of corruption and to level the playing field for U.S. companies. On the defense side, there is a lucrative practice. Of course there is an interest to seeing enforcement numbers remain high. And the third piece of it is clients. More and more companies are taking their business global. And with that comes a lot of risk and potential corruption. That’s difficult for companies to navigate. Until Siemens, there were probably a lot of Fortune 100 companies expanding rapidly and aggressively that weren’t really thinking about the pitfalls.”

How many FCPA cases are being investigated at any one time?

“I would say at any one time there are probably a couple of hundred open investigations. I give a tremendous amount of credit, to leadership of the FCPA unit, particularly Dan Kahn, for working diligently to make sure there are not a bunch of open cases just sitting there. Prosecutors should take the time to look at a case that probably should be declined. That’s certainly a less fun case than the hot case you are immersed in at any given time. A lot of underbrush has been cleaned up over the past couple of years under our watch. I don’t know what the exact number stood on the day I left the Department. Now, there are not just a lot of cases sitting open that should be declined and closed. Much of that underbrush has been cleaned up.”

[For the complete Interview with Sandra Moser, see 33 Corporate Crime Reporter 8(12), Monday February 25, 2019, print edition only.]

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