Insights

September 13, 2021 | Compliance Risk + Compliance

The pandemic hit, mayhem and lockdowns ensued, and trillions of dollars were appropriated for COVID relief by Congress. It’s a lot, and as response and recovery continues to unfold, fraudsters saw an opportunity and are taking it. In response, Senator Chuck Grassley (R-IA) – historically a champion of the False Claims Act (“FCA”) – is leading a bipartisan group of senators who have proposed legislation, the False Claims Act Amendments Act of 2021 (“FCA Amendments Act of 2021”), that, if … Read More

June 14, 2021 | Compliance

With administration change comes policy change. As the Biden administration continues to implement its policies, we are seeing a changing view on sales of U.S. strategic goods to foreign entities.

Specifically, as reported by Reuters, the Biden administration will “…’reprioritize’ other factors including U.S. national security, human rights and nonproliferation….,” in addition to economic security with relation to exports of weapons and strategic goods. In addition, the administration will look more favorably at strategic goods exports that are defensive … Read More

December 14, 2020 | Compliance Risk + Compliance

Although regulators often seek to empower compliance officers within their institutions, a troubling question lingers as to whether regulators are undercutting this important message by simultaneously sending mixed or unrefined signals about when a Chief Compliance Officer should be held personally liable for the compliance failings of his or her firm. The director of the U.S. Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently urged investment firms to empower Chief Compliance Officers (CCOs), saying, “The CCO is … Read More

November 11, 2020 | Compliance Financial Crime Consulting

In its recently issued Sanctions Systems Annual Report FY 2020, the World Bank Group (WBG) confirmed its commitment to investigate and sanction corruption and fraud occurring in bank-financed projects, despite the unprecedented challenges of the COVID-19 pandemic.  The report, co-authored by the Integrity Vice Presidency (INT), the Office of Suspension and Debarment (OSD), and the Sanctions Board, revealed little coronavirus-related slowdown in the WBG’s enforcement activities.  To the contrary, the bank’s in-house investigatory teams initiated roughly the same number of … Read More

September 17, 2020 | Compliance National Security

As my colleague Ken Mendelson noted, the watchword for ACI’s recent CFIUS conference was “mitigation.”  As a result of the new rules implementing the Foreign Investment Risk Review Modernization Act (“FIRRMA”), the number of deals requiring mitigation is likely to grow significantly.

The conference, however, focused mostly on the kinds of deals that would require mitigation.  The conference offered little detail regarding the specific mitigation measures that might be sufficient to get a transaction approved.  Those measures could … Read More

September 14, 2020 | Compliance

As might have been expected, the urgent distribution of hundreds of billions of dollars by the government in coronavirus relief funds has strained the capacity to process it and left ample fodder for further government oversight and investigations.  Anyone who received this funding or was involved in the process to distribute it should assess their potential exposure and be prepared when the government knocks at the door.

The strain is evidenced by developments reported over the last couple of weeks.  … Read More

July 23, 2020 | Compliance Financial Crime Consulting

In the Summer of 2015, the New York State Department of Financial Services (“DFS”) became the first state banking regulator to issue a stand-alone virtual currency regulatory framework (23 NYCRR Part 200).  Prior to the creation of this virtual currency license, also known as the “Bitlicense,” institutions followed different paths to seek approval from the DFS for their crypto-related activities involving New York or New York residents.  Some institutions, like Paxos Trust Company, LLC (f/k/a itBit Trust Company, LLC) and … Read More

July 9, 2020 | Compliance Financial Crime Consulting

The New York Department of Financial Services (“NYDFS”) recently sanctioned Deutsche Bank (“DB”) $150 million for BSA/AML deficiencies.  According to the regulator’s factual findings, the compliance failures arose in connection with the bank’s private wealth relationship with Jeffrey Epstein, and correspondent banking relationships with Danske Bank Estonia (“Danske Estonia”) and FBME Bank (“FBME”), both located in Eastern Europe.

This latest enforcement action against DB follows several others issued against the bank by NYDFS since 2015, including for improper conduct arising … Read More

June 11, 2020 | Compliance

Oversight of congressional funding and the economic impact of the COVID-19 pandemic picked up steam this week. Anyone who received funding from the CARES Act or other disaster relief legislation needs to be sure the money can be properly accounted for.

The Senate recently confirmed Brian Miller as Special Inspector General for Pandemic Recovery (SIGPR).  As SIGPR, he will oversee the taxpayer-funded pandemic recovery fund and lead audits and investigations to prevent and detect fraud and abuse. Miller will also … Read More

June 10, 2020 | Compliance

The COVID-19 pandemic has left us all in an embattled state, and the businesses that fuel our economy have probably been hit hardest of all. In an effort to help mitigate the damage, the government is funneling $2.2 trillion to hard-hit companies via the CARES Act (Coronavirus Aid, Relief, and Economic Security Act). While the potential is always high for fraud and abuse in relation to large, cumbersome governmental actions, this is never truer than when they are precipitated by … Read More