The U.S. Department of Justice's ("DOJ") Criminal Division recently issued a memorandum outlining a shift in the DOJ's priorities and policies for prosecuting white-collar crime (the "Memorandum"). Issued by the Head of the DOJ's Criminal Division, Matthew Galeotti, and announced at a recent Securities Industry and Financial Markets Association conference, the Memorandum underscores the Trump administration's focus on (1) rooting out waste and fraud, (2) overarching America First principles (which include combating foreign adversaries and protecting American businesses), and (3) concerns about prosecutorial overreach.
The Memorandum brings the administration's America First philosophy to white-collar crime enforcement, stating that the DOJ will continue to robustly pursue certain economic crimes, such as healthcare fraud and procurement fraud, while indicating a shift in some priorities toward economic crimes that can harm U.S. interests, such as customs fraud, bribery by non-U.S. persons, and international money laundering that aids cartels, human smuggling, or sanctions evasion. Simultaneously, the DOJ issued updates to the Criminal Division's Voluntary Self-Disclosure Policy and the Whistleblower Awards Pilot Program, and provided updated guidance on how it will implement corporate monitorships, bringing those programs in line with these priorities.
The title of the Memorandum, "Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime," identifies the three "core tenets" that should guide Criminal Division attorneys in investigating and prosecuting white-collar crimes.
Tenet 1: Focus – Enforcement in Ten High-Impact
Areas
The Memorandum directs the Criminal Division to be
"laser-focused" on prosecuting crime in 10 areas
"that will have the greatest impact in protecting American
citizens and companies." Notably, the two lead focus areas are
healthcare and procurement fraud, and trade and customs fraud. The
Memorandum notes that rampant healthcare fraud and procurement
fraud drain our country's limited resources, hurting vulnerable
citizens. This points to strong continued enforcement against
individuals and corporations that have allegedly exploited programs
such as Medicare and Medicaid or who have allegedly fraudulently
received government funds from grants or contracts. The Memorandum
also recognizes the importance of strong tariff enforcement to the
Administration's foreign policy goals.
The list of high-impact areas that will be a focus for the Criminal Division also includes:
- Fraud that victimizes U.S. investors and manipulates U.S. markets – in this area, the DOJ is signaling an increasing priority to prosecute generalized investment fraud, such as Ponzi schemes and market manipulation schemes that target vulnerable investors;
- Conduct that threatens the country's national security (a very broad category that includes export controls and sanctions violations, among others);
- Schemes that support foreign terrorist organizations, including recently designated cartels and transnational criminal organizations;
- Complex money laundering and bribery schemes that impact U.S. national interests, undermine U.S. national security, harm the competitiveness of U.S. businesses, or enrich foreign corrupt officials;
- The manufacture and distribution of controlled substances; and
- Crimes that involve digital assets used to commit other offenses, such as investment fraud.
The Memorandum's inclusion of "bribery and associated money laundering" as a high-impact area is notable given the February 10, 2025 Executive Order pausing most Foreign Corrupt Practices Act ("FCPA") enforcement against U.S. businesses. The Memorandum states that the DOJ's enforcement efforts will likely be focused on investigating bribery schemes that "harm the competitiveness of U.S. businesses." The Criminal Division is clearly signaling that it will target non-U.S. persons rather than U.S. persons under the FCPA, especially when they engage in bribery that injures U.S. economic interests and disadvantages U.S. companies.
A New Emphasis on Customs Enforcement
The Memorandum highlights trade and customs fraud as an area to
which the Criminal Division will direct more attention, noting that
the Division must focus on addressing threats to the U.S. economy
and national security. Specifically, the Memorandum calls out
"[t]rade and customs fraudsters, including those who commit
tariff evasion, seek to circumvent the rules and regulations that
protect American consumers and undermine the Administration's
efforts to create jobs and increase investment in the United
States." Prosecuting these kinds of fraud, according to the
Criminal Division, will allow U.S. businesses to compete on a level
playing field in global commerce.
The Criminal Division's new focus on trade and customs fraud, areas previously policed in large part by U.S. Customs and Border Protection, reflects a shifting of prosecutorial resources to investigating allegations of tariff evasion by both international and American importers. Tariff evasion and customs fraud can give rise to liability under the "reverse false claims" provision of the False Claims Act. U.S. importers therefore need to ensure that they have robust policies and procedures in place to comply with the ever-evolving tariff landscape, and they should be wary of proposals by foreign suppliers, including from China, to "mitigate" tariff exposure without validating whether such proposals are lawful. Indeed, the Memorandum makes several references to criminal conduct related to Chinese entities.
Healthcare Fraud and Procurement Fraud
As mentioned above, two long-standing areas of enforcement for the
Department remain very much in focus: healthcare fraud and
procurement fraud. Companies that contract with the federal
government should remain vigilant in ensuring compliance with
federal program rules, and companies in the health care space must
also ensure compliance with reimbursement requirements under
federal law.
Expansion of the Corporate Whistleblower Awards Pilot
Program
To jump-start investigations in many of these new focus areas, the
DOJ is broadening the applicability of financial incentives to
whistleblowers. In the Memorandum, the Criminal Division announced
that it would amend its Corporate Whistleblower Awards Pilot
Program to expand the number of "subject areas" in which
tips could lead to forfeiture, which will now include violations
related to international criminal organizations; controlled
substances; federal immigration law; terrorism; sanctions evasion;
trade and customs fraud; and corporate procurement fraud.
Tenet 2: Fairness – Changes to Corporate
Enforcement
While noting that criminal laws should be applied "equally
and fairly" to individuals and corporations, the Memorandum
explicitly states that the Criminal Division's first priority
is to prosecute individuals, particularly when there has been only
a low level of corporate misconduct. Prosecutors must now consider
several factors when determining whether to charge corporations.
This is consistent with the administration's broader philosophy
that prosecuting corporations often harms innocent shareholders
while doing little to punish individual wrongdoers. Further, in
lieu of prosecution, the Department directs prosecutors to consider
alternative forms of resolution, such as non-prosecution agreements
and deferred prosecution agreements. Galeotti states in the
Memorandum that he has directed certain sections of the Criminal
Division to review the length of terms of all existing agreements
with companies to ascertain if any agreements should be terminated
early.
Taken together, the policy changes could encourage companies to submit voluntary disclosures blaming individuals, including their own employees, for violations in order to minimize penalties on U.S. businesses themselves. Indeed, the Memorandum indicates that prosecution of individuals will often be enough to "vindicate U.S. interests," implying that criminal prosecution of U.S. companies themselves will not be a Criminal Division priority.
Tenet 3: Efficiency – Minimizing the Impact of
Investigations and Corporate Monitors
The Memorandum also focuses on a third tenet of enforcement
– "efficiency" – which the Criminal Division
plans to achieve by streamlining corporate investigations.
Prosecutors should now "minimize the length and collateral
impact of their investigations" and restrict the use of
independent compliance monitors, which must only be imposed when
necessary and, in those instances, in a narrowly tailored manner.
In addition, the Memorandum announced the creation of a new monitor
selection process, as well as the ongoing review of all existing
monitorships for compliance with the new policy.
Conclusion
The Memorandum reflects a recalibration in priorities for the
Criminal Division, with a focus on crimes that affect American
interests and national security. In particular, the commitment to
pursuing tariff violations signals clearly that the Criminal
Division intends to support the administration's economic,
foreign trade, and national security agenda through its enforcement
role. At the same time, areas that have traditionally involved
misuse of federal funds will continue to also be a high priority
for enforcement, to combat any perceived waste, fraud, and abuse,
in line with the administration's agenda.
The Memorandum also signals a significant shift in how the Department will treat companies suspected of committing white-collar crimes, especially U.S. companies, but it certainly does not portend an end to corporate enforcement. To the contrary, companies – particularly those that are in the health care space, receive government grants or contracts, operate in global regions impacted by terrorist organizations or cartels, or are involved in international trade – should expect vigorous enforcement in areas that align with the Administration's policy priorities.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
