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US Justice Department Faces Challenges in Corporate Crime Crackdown: 2023 Penalties Hit Eight-Year Low

In 2023, the United States Justice Department faced a challenging year in its pursuit of corporate crime, as evidenced by its lowest penalties secured in at least eight years. The department's Washington D.C. Fraud Section, which specializes in tackling corporate wrongdoing related to healthcare, securities, and foreign bribery, found itself grappling with a myriad of obstacles. Despite concluding eight settlements with companies, in collaboration with international regulators, the total fines garnered a staggering 68% decline, dropping below the $1 billion mark for the first time since 2015, according to an in-depth Reuters analysis of the agency's annual report.


US Justice Department Faces Challenges in Corporate Crime Crackdown: 2023 Penalties Hit Eight-Year Low

This decline can be attributed to several factors, notably the pandemic-induced trial backlog, which diverted crucial resources from settlement negotiations. Furthermore, the historically impactful bribery unit seemed to have pursued fewer major cases, further contributing to the downward trend in penalties. Such figures may come as a disappointment to progressive groups and lawmakers who had high expectations for a robust corporate crackdown promised by the Biden administration's Department of Justice. Indeed, recent policy changes have faced criticism for their perceived leniency, sparking concerns about the department's commitment to holding corporate wrongdoers accountable.


"We are focused on holding culpable individuals accountable, including corporate executives and gatekeepers, and pursuing the most impactful cases," emphasized Acting Assistant Attorney General Nicole Argentieri in a statement to Reuters. Despite the challenges, the department remains resolute in its mission, highlighting its continued efforts to try complex financial cases nationwide. While the number of convictions at trial in 2023 slightly decreased compared to the previous year, the department still achieved a historically high level of success.


COMPANY FORMATION &   DOMICILATION SERVICES

Among the notable cases in 2023 were a guilty plea and a substantial $206.7 million penalty against Ericsson for breaching a previous bribery-related resolution, as well as insider trading charges leveled against a healthcare company CEO. Additionally, approximately one quarter of individuals charged were executives, lawyers, or medical professionals, underscoring the department's focus on pursuing accountability at all levels of corporate hierarchy.


The Fraud Section, known for publishing annual reports since 2015, had previously recorded escalating penalties for foreign bribery involving major companies such as Ericsson, Goldman Sachs, and Airbus. However, shifts in leadership within the agency have undoubtedly impacted some of these initiatives. Nonetheless, Deputy Assistant Attorney General Lisa Miller expressed confidence in the department's pipeline and its innovative use of data to identify and dismantle wide-ranging fraud and foreign bribery schemes as efficiently as possible.


It's crucial to note that the data provided does not encompass all major DOJ settlements, such as the $4.3 billion settlement with Binance, the world's largest cryptocurrency exchange, which was handled by a different unit within the department. This underscores the multifaceted nature of the department's efforts to combat corporate crime, which extends beyond the scope of the reported figures.

By fLEXI tEAM

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