The SEC recently brought an FCPA action against a former Goldman Sachs executive
for an alleged bribery scheme, but decided not to charge the bank itself.
The case holds some important lessons for FCPA compliance, as Foley Hoag attorneys John Murray and Shrutih Tewarie discuss in this Law360 article. More
In the past two weeks, the federal government has charged several individuals in Paycheck Protection Program loan fraud schemes. The allegations have ranged from applying for loans for non-operating businesses to using loan funds to buy cars and jewelry. Charges announced this week showed a whole new level of creativity. A Texas man, Samuel Yates, allegedly used an online name generator to make up the names of hundreds of employees in an effort to obtain a $5 million loan. … More
In yet another sign that the federal government is following through on its warnings about PPP loan fraud, the Department of Justice, according to reports from Reuters, has issued grand jury subpoenas to several Wall Street banks related to an investigation into PPP loans. The subpoenas were reportedly issued by the DOJ’s Fraud Section. The issuance of the subpoenas does not necessarily indicate wrongdoing by the banks. … More
Federal prosecutors continued to quickly respond to PPP loan fraud, bringing two additional cases that allege clear misuse of the funds intended for small businesses. In one case, prosecutors in Georgia charged reality TV personality Maurice Fayne, aka “Arkansas Mo” of “Love & Hip Hop: Atlanta” fame, with bank fraud for allegedly using $1.5 million of a $2 million PPP loan to maintain his luxury lifestyle. … More
Earlier today, the Supreme Court threw out federal program and wire fraud convictions for two former public officials who conspired to induce traffic jams in Fort Lee, New Jersey as political retaliation in 2013. Bridget Anne Kelly and William Baroni were convicted of fraud charges in 2015 for their role in diverting lanes of traffic on the George Washington Bridge to “send [Fort Lee’s Mayor Mark Sokolich] a message” after Sokolich refused to support Governor Christie’s re-election campaign in 2013. … More
On Tuesday, May 5, the Department of Justice (DOJ) filed charges in the federal District Court of Rhode Island against David A. Staveley and David Butziger for conspiracy to make a false statement and conspiracy to commit bank fraud in connection with loan applications made under the federal government’s Payroll Protection Program (PPP). The Complaint alleges that Staveley of Andover, Massachusetts, and Butziger of Warwick, Rhode Island,… More
The United States Attorney for the District of Massachusetts is proactively seeking to find, investigate, and prosecute unlawful attempts to exploit the COVID-19 pandemic and is asking hospitals to assist. U.S. Attorney Andrew Lelling sent a letter to leaders of Massachusetts hospitals asking them to report any “individuals and companies that may have acquired vital medical supplies in excess of what they would reasonably use, or for the purpose of charging exorbitant prices.” The Secretary of Health and Human Services has designated 15 categories of supplies as “scarce,” thereby enabling prosecutors to seek certain civil and criminal enforcement remedies against anyone accused of hoarding or gouging prices for those supplies. … More
The Department of Justice (DOJ) announced a criminal complaint last Friday in the most significant COVID-19 fraud prosecution to date. A complaint is a charging document usually submitted to a court to obtain an arrest warrant. It is not an indictment, and, unless an early resolution is reached, in order to pursue the case further DOJ will have to present the case to a grand jury to vote on charges (whenever grand juries are once again in session).… More
The recently-reported sales of stock by several U.S. Senators following private briefings on the COVID-19 pandemic, apparently allowing them to avoid significant losses before the markets plummeted, have focused attention on the Stop Trading on Congressional Knowledge (STOCK) Act. The Act, which President Obama signed into law in 2012, followed the public outcry resulting from a “60 Minutes” report on lucrative trades by members of Congress during the debate over the Affordable Care Act and prior to the 2008 financial crisis. … More
Partner John Murray recently published an alert on guidance from the SEC Division of Enforcement regarding the unique risks of insider trading posed by the COVID-19 pandemic. The full alert can be found here. More