Corruption Crime & Compliance

When a company learns that the government is investigating the company's activities, a company has to move quickly to respond to the government and engage prosecutors about the investigation.  Depending on how the company learns about the government investigation, the company's strategy and immediate steps may differ. Once the company learns it is under investigation, the company has to collect information about the activity and business segment that may be under investigation.   In this episode, Michael Volkov outlines strategies for responding to government investigations.

In the early part of 2018, the Justice Department brought two significant AML criminal enforcement actions against US Bancorp and Rabobank, respectively. These two cases, coupled with the new beneficial ownership regulations effective May 11, 2018, raise significant changes in the AML compliance and enforcement landscape.  In addition, the SEC and FINRA brought an important civil AML enforcement action against Aegis Corporation and three individuals, two of whom were compliance officers at the broker-dealer.   In this episode, Michael Volkov discusses recent AML compliance trends and AML enforcement actions.  

On August 9, 2018, FBI agents executed search warrants at Michael Cohen's office, hotel, residence, safety deposit box and electronic devices.  Since then, we learned that the US Attorney's Office in New York City have an ongoing criminal investigation against Michael Cohen.  The full scope of this investigation has yet to be disclosed but it is clear that Cohen will face significant and serious charges. In this episode, Michael Volkov discusses the Cohen criminal investigation and the execution of the search warrants.      

<!-- /* Font Definitions */ @font-face {font-family:"MS Mincho"; panose-1:2 2 6 9 4 2 5 8 3 4; mso-font-alt:"ＭＳ 明朝"; mso-font-charset:128; mso-generic-font-family:modern; mso-font-pitch:fixed; mso-font-signature:-536870145 1791491579 134217746 0 131231 0;} @font-face {font-family:"Cambria Math"; panose-1:2 4 5 3 5 4 6 3 2 4; mso-font-charset:0; mso-generic-font-family:roman; mso-font-pitch:variable; mso-font-signature:-536870145 1107305727 0 0 415 0;} @font-face {font-family:Cambria; panose-1:2 4 5 3 5 4 6 3 2 4; mso-font-charset:0; mso-generic-font-family:roman; mso-font-pitch:variable; mso-font-signature:-536870145 1073743103 0 0 415 0;} @font-face {font-family:"\@MS Mincho"; panose-1:2 2 6 9 4 2 5 8 3 4; mso-font-charset:128; mso-generic-font-family:modern; mso-font-pitch:fixed; mso-font-signature:-536870145 1791491579 134217746 0 131231 0;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-unhide:no; mso-style-qformat:yes; mso-style-parent:""; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:"Cambria",serif; mso-ascii-font-family:Cambria; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"MS Mincho"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Cambria; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} .MsoChpDefault {mso-style-type:export-only; mso-default-props:yes; font-family:"Cambria",serif; mso-ascii-font-family:Cambria; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"MS Mincho"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Cambria; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} @page WordSection1 {size:8.5in 11.0in; margin:1.0in 1.0in 1.0in 1.0in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.WordSection1 {page:WordSection1;} -->   Cryptocurrencies, including Bitcoin, are exploding on the marketplace.  Cryptocurrencies are promising huge technological advances in our economy by relying on the new blockchain technology. Initial coin offerings raised $7 billion in capital last year, and this year ICOs are expected to raise over $20 billion in capital. Bitcoin and other established cryptocurrencies have increased in value. Bitcoin reached a high of nearly $20,000 and is now trading just under $7000. Ethereum, a rival cryptocurrency, is trading at just under $400. Bitcoin and other cryptocurrencies are volatile, and investors are suffering significant swings in profits and losses. At the same time, we are witnessing the beginning of regulatory and enforcement actions of the industry and enforcement actions against fraudsters, Ponzi schemes and other misconduct surrounding the cryptocurrency market. To help me review these issues, Michael Volkov interviews Matt Stankiewicz, an associate at The Volkov Law Group.

As part of the aggressive enforcement of white collar crime cases, federal  law enforcement officers are executing more search warrants at company offices.  Companies should plan in advance for such an event.  A company can learn valuable information about an ongoing investigation.  Just as important, company officials have to preserve and assert objections when federal agents conduct a search. In this episode, Michael Volkov outlines ten important steps companies have to take to prepare for execution of a search warrant.

Haiti continues to suffer from significant corruption.  In Transparency International's recent Corruption Perception Index, Haiti ranked 157 out of 180 countries on the corruption perception index. Angelo Viard, a longtime expert in business development in Haiti sees a different picture -- business opportunities in Haiti are present but corruption risks have to be acknowledged and addressed.  Angelo Virad provides practical insights on how to navigate corruption risks in Haiti.

Companies continue to face significant risks from their third parties.  In response, companies are implementing sophisticated due diligence and third party risk management systems.  FCPA enforcement risks are only one of several risks created by a company's third parties.  Companies have to screen and review their third parties for corruption, sanctions, money laundering, antitrust, human trafficking, child labor and reputational risks. In this three-part series, Michael Volkov describes the law and enforcement risks, basic requirements for a third-party management system, and a problem-solving approach to difficult third-party risk issues. In Part I, Michael Volkov discusses the law and government expectations for a third-party risk management system. In Part II, Michael Volkov discusses the building blocks for an effective due diligence system. In Part III, Michael Volkov discusses solutions to common due diligence problems.

Companies continue to face significant risks from their third parties.  In response, companies are implementing sophisticated due diligence and third party risk management systems.  FCPA enforcement risks are only one of several risks created by a company's third parties.  Companies have to screen and review their third parties for corruption, sanctions, money laundering, antitrust, human trafficking, child labor and reputational risks. In this three-part series, Michael Volkov describes the law and enforcement risks, basic requirements for a third-party management system, and a problem-solving approach to difficult third-party risk issues. In Part I, Michael Volkov discusses the law and government expectations for a third-party risk management system. In Part II, Michael Volkov discusses the building blocks for an effective due diligence system. In Part III, Michael Volkov discusses solutions to common due diligence problems.

Companies continue to face significant risks from their third parties.  In response, companies are implementing sophisticated due diligence and third party risk management systems.  FCPA enforcement risks are only one of several risks created by a company's third parties.  Companies have to screen and review their third parties for corruption, sanctions, money laundering, antitrust, human trafficking, child labor and reputational risks. In this three-part series, Michael Volkov describes the law and enforcement risks, basic requirements for a third-party management system, and a problem-solving approach to difficult third-party risk issues. In Part I, Michael Volkov discusses the law and government expectations for a third-party risk management system. In Part II, Michael Volkov discusses the building blocks for an effective due diligence system. In Part III, Michael Volkov discusses solutions to common due diligence problems.

The FCPA includes a specific requirement that a public company maintain an adequate set of internal controls.  A company's compliance program is one component of a company's internal controls.  Sarbanes-Oxley expended and reinforced this important requirement. The Department of Justice and the SEC have aggressively enforced the internal controls requirement.  The SEC, in particular, has expansively enforced the internal controls requirement even where a failure to implement adequate controls or circumvention of controls was not coupled with evidence of bribery or fraud. Given this situation, companies have to take more care in the design and implement their internal controls, recognizing that the controls themselves may be used by government prosecutors to charge companies and individuals who may circumvent the controls. In this episode, Michael Volkov discusses the internal controls law, enforcement practices and describes a new approach to the crafting of a company's internal controls.