Summary
In a memorandum dated May 12, 2025, the head of the U.S. Department of Justice (DOJ) Criminal Division announced the division's approach and priorities for white collar crime enforcement in the new administration. The updated guidance establishes the division's new enforcement priorities, including a focus on health care fraud, trade and customs fraud, and fraud that in financial markets harms U.S. investors, and expands aspects of the existing whistleblower program to better align with these new priorities. The Criminal Division's announcement revises existing policies that incentivize companies to self-report misconduct and suggests that the division will limit the use of compliance monitors when negotiating criminal resolutions.
The Upshot
The Criminal Division announced its enforcement priorities and made meaningful changes to existing policies to support its new priorities. Several existing Criminal Division policies and programs—including its whistleblower award program, policies related to corporate investigations and enforcement and self-reporting, and corporate compliance monitor guidelines, will change accordingly to bring them into line with the new enforcement priorities.
In remarks made this week, Matthew R. Galeotti, the current head of the Criminal Division, noted that recent DOJ enforcement efforts "have come at too high a cost for businesses and American enterprise" and announced that the division was "turning a new page on white collar and corporate enforcement." The new policy will, in some cases, expand and, in other cases, contract Biden-era policy initiatives. For example, the new enforcement priorities expand several policies announced during the Biden administration, including the Corporate Whistleblower Awards Pilot Program and encouragement of self-reporting through the Corporate Enforcement and Voluntary Self-Disclosure Policy. But the announcement also pulls back on certain Biden administration priorities, like the use and selection of compliance monitors for corporate criminal enforcement.
The Bottom Line
The Criminal Division has identified 10 "high-impact" areas that represent the administration's white collar crime enforcement priorities. Many of these priorities are well-known and established (e.g., health care fraud, procurement fraud, market manipulation and investor fraud, violations of the Controlled Substances Act); but others are new (i.e., tariff and customs fraud and fraud perpetrated through variable interest entities (VIEs), "which are typically Chinese-affiliated companies listed on U.S. exchanges that carry significant risks to the investing public . . .")
The memo from the head of the Criminal Division is addressed to the Criminal Division and does not alter or eliminate policies promulgated by other DOJ components, including the United States Attorneys' Offices. Consequently, until higher level leadership officials or the heads of those components issue new guidance, United States Attorneys' Offices that have adopted their own voluntary self-disclosure policies (i.e., the Southern District of New York's Whistleblower Pilot Program (launched in 2024), and the Northern District of California's Corporate Voluntary Self-Disclosure Policy (launched in 2023)) remain unaffected. With respect to changes to existing Criminal Division policies, the whistleblower policy will also provide for potential awards for individuals who report sanctions offenses, immigration crimes, trade and tariff fraud, procurement fraud, and other offenses. In an effort to eliminate "unchecked and long-running investigations" that are costly both to companies and the division and "can unduly interfere with day-to-day business operations," the division will emphasize efficiency in its investigations and further incentivize companies to self-report misconduct. Finally, DOJ will narrow when prosecutors can use compliance monitors for companies entering corporate resolutions.
In remarks to the Securities Industry and Financial Markets Association (SIFMA) Anti-Money Laundering and Financial Crimes Conference on May 12, 2025, and in a memo titled "Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime" released the same day (the Enforcement Memo), Matthew R. Galeotti, current head of the Criminal Division, announced the division's "enforcement priorities and policies for prosecuting corporate and white collar crime in the new administration." His remarks and the Enforcement Memo represent a change in approach to white collar crime enforcement and a move away from recent "efforts [that] have come at too high a cost for businesses and American enterprise." The Enforcement Memo notes that "overbroad and unchecked corporate and white collar enforcement burdens U.S. business and harms U.S. interests." Galeotti remarked that U.S. companies "need clear guidance and certainty on the concrete benefits that each company . . . can earn through self-reporting, owning up to criminal conduct, remediating, and cooperating" with the Criminal Division.
Guided by the "core tenants" of focus, fairness, and efficiency, the Enforcement Memo: (1) articulates the Criminal Division's 10 areas of focus when investigating and prosecuting corporate crime; (2) expands the Corporate Whistleblower Award Pilot Program to advance these priorities; (3) clarifies the Criminal Division's Corporate Enforcement and Voluntary Self Disclosure Policy to make investigations more efficient and encourage self-reporting; and (4) limits the use of compliance monitors in corporate resolutions.
New Priorities for White Collar Crime Investigations
In the Enforcement Memo, the Criminal Division explains that it will prioritize investigating and prosecuting corporate crimes in 10 "high-impact areas:"
- Fraud and abuse in government programs, including health care fraud, program, and procurement fraud. The Enforcement Memo specifically mentions Medicare, Medicaid, defense spending, and other programs.
- Trade and customs fraud, including tariff evasion.
- Fraud perpetrated through variable interest entities (VIEs), market manipulation, and securities fraud.
- Other investment frauds that victimize U.S. investors.
- Conduct that threatens the U.S. national security, including "threats to the U.S. financial system by gatekeepers, such as financial institutions and their insiders that commit sanctions violations."
- Complex money laundering (including Chinese Money Laundering Organizations and other organizations that launder drug proceeds).
- Material support by corporations to foreign terrorist organizations, including cartels.
- Violations of the Controlled Substances Act and the Federal Food, Drug, and Cosmetic Act (including the manufacturing of "counterfeit pills laced with fentanyl" and unlawful distribution of opioids "by medical professionals and companies").
- Bribery and associated money laundering that impact U.S. national interests.
- Crimes involving digital assets.
Changes to DOJ's Whistleblower Programs
The Enforcement Memo outlined an expansion of the Criminal Division's Corporate Whistleblower Awards Pilot Program to better align with and support its focus on these priority areas. According to Galeotti, these changes "reflect [the Criminal Division's] focus on the worst actors and most egregious crimes."
In 2024, DOJ announced its Corporate Whistleblower Awards Pilot Program, which provided a path for individuals to be eligible for awards if they provided original and truthful information about corporate misconduct. But, the 2024 pilot program was limited to tips about only a subset of corporate crime: crimes involving financial institutions, foreign and domestic corruption, and healthcare fraud schemes involving private insurance plans.
The new amendments add several new substantive areas to the pilot program, including many of the administration's enforcement priorities, among them:
- Procurement and federal program fraud;
- Trade, tariff, and customs fraud;
- Immigration-related offenses; and
- Sanctions offenses, material support of foreign terrorist organizations, and those that facilitate international cartels, including money laundering and narcotics crimes.
As was true with the prior whistleblower policy, there are a number of requirements for eligibility for the whistleblower awards program, among them that the information must result in forfeiture for an award to be made.
Amendments to DOJ's Corporate Enforcement and Voluntary Self-Disclosure Policy
In his speech to SIFMA, Galeotti warned that the belief that DOJ "will be quick and heavy-handed with the stick, and stingy with the carrot" leads to "lengthy drawn-out investigations." The Enforcement Memo directs the Criminal Division to streamline corporate investigations and revisions to its Corporate Enforcement and Voluntary Self-Disclosure Policy to encourage self-reporting (self-disclosure is the "key"). The division's goal in the revision was to be "maximally transparent so that companies . . . can make appropriate decisions when faced with potential misconduct." To assist companies and counsel, the division published a flow chart outlining three alternatives:
- Companies that voluntarily self-disclose misconduct, fully cooperate, remediate, and have no aggravating circumstances, can expect a declination (meaning the division does not pursue criminal charges or a criminal resolution). Previously, these companies only received a presumption of a declination.
- Under the revised policy, companies that self-disclose, cooperate, and remediate but do have aggravating circumstances can still receive a declination. The amended policy gives prosecutors discretion to decline prosecution if a company's cooperation and remediation outweigh the aggravating circumstances. Previously, prosecutors were not given such discretion.
- Where a company self-reports in good faith but DOJ already knows about the conduct (what the amended policy calls "Near Miss" Voluntary Self-Disclosure), under certain circumstances, a company may still receive a short-term nonprosecution agreement, a 75 percent reduction in the criminal fine, and will not be required to engage a compliance monitor.
Limited Use of Compliance Monitors
Finally, the Enforcement Memo states that the division will only require a compliance monitor when "necessary." Under the Biden administration, the division's use of compliance monitors as part of corporate resolutions expanded. In his remarks to SIFMA, Galeotti announced that the division would review existing corporate resolutions where compliance monitors were appointed. Compliance monitors can be "a burden on businesses that are frequently making self-directed improvements" when not used properly, according to Galeotti. These changes are detailed in a second May 12, 2025, memo titled "Memorandum on Selection of Monitors in Criminal Division Matters" (the Monitor Memo).
The Monitor Memo updates in two areas:
- First, the Monitor Memo clarifies the factors that prosecutors must consider when determining whether a monitor is appropriate, including: (1) the seriousness of conduct and risk that it will happen again; (2) the availability of other effective independent governing oversight; (3) the efficacy of the company's corporate compliance program at the time of the resolution; and (4) the maturity of the company's controls and ability of the company to test and update its compliance program.
- Second, the memo sets out criteria ensuring that when a monitor is necessary, prosecutors "appropriately tailor and scope" the monitor's review to address the risk of recurrence of the underlying criminal conduct.
Conclusion
In issuing the Enforcement Memo and enacting changes to numerous DOJ policies, the new administration's Criminal Division has established its enforcement priorities and objectives. First, the Enforcement Memo contains a mix of traditional areas of Criminal Division focus (fraud, market manipulation, material support of terrorism, narcotics) and new areas (variable interest entities, custom and tariff-related crimes). Second, the Criminal Division will expand its whistleblower program to better align with these new priorities. Third, the Criminal Division is focusing on efficient investigations and providing a clearer path to noncriminal resolution (self-reporting, cooperation, and remediation) than the previous administration. Finally, the Enforcement Memo and Monitor Memo strongly suggest that the use of compliance monitors as part of the resolution package will likely decrease.
Ballard Spahr's White Collar Defense and Investigations Group has robust experience in advising public and private sector clients in navigating changing DOJ priorities, as well as responding to governmental inquiries and investigations and civil enforcement proceedings. We are currently advising clients on a host of these topics, including many involving the Criminal Division's area of focus. Please contact us if we can assist you in advice and counsel regarding such matters or in responding to active inquiries, investigations, or proceedings.
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