Bloomberg Law recently published two articles drawing on the Women's White Collar Defense Association (WWCDA) Thought Leadership Subcommittee’s recent WaterCoolerPLUS session entitled “COVID-Era Challenges to Federal Indictments.” Both articles, co-authored with fellow WWCDA members, offer practical insights for practitioners seeking to challenge federal indictments related to COVID-19.
Third Circuit Reaffirms That Willfulness Does Not Require Knowledge That Conduct is Criminal, Rather Than Merely Unlawful
On December 4, 2020, the Third Circuit affirmed the district court’s willfulness jury instruction in a criminal payroll tax case under I.R.C. § 7202, which followed the familiar definition of willfulness found in Cheek v. United States. In United States v. Gilmore, the Third Circuit rejected the defendant’s contention that willfulness requires knowledge that the defendant’s conduct is criminal, affirming that “willfulness in the context of tax crimes merely requires knowledge and violation of a duty.”
Since its China Initiative was announced two years ago, the Department of Justice (DOJ) has expanded its focus from prosecuting individuals suspected of stealing trade secrets and other sensitive information for the Chinese government to prosecuting those who fail to disclose ties to Chinese government agencies and businesses.
Signing Tax Return Without Checking the Box and Failing to File FBARs Constitutes Willfulness as a Matter of Law, Fourth Circuit Holds
On October 20, 2020, the Fourth Circuit upheld the imposition of enhanced civil penalties on husband and wife taxpayers for their willful failure to file Reports of Foreign Bank and Financial Accounts (FBARs), despite any evidence that they were aware of the FBAR-filing requirement.
In the September 2020 edition of the Pennsylvania Association of Criminal Defense Lawyers’ (PACDL) For the Defense magazine, Carolyn Kendall examines the careful balance judges and court administrators must strike between ensuring that judicial proceedings protect the rights of the accused and minimizing the risk of COVID-19 transmission.
Third Circuit Underscores Importance of Police Policies and Procedures in Precedential Decision on the Inevitable Discovery Rule
On May 15, 2020, the Third Circuit considered whether physical evidence discovered during a vehicle search made after a defendant's involuntary admission that he had drugs in his car should have been suppressed or whether it could be admitted pursuant to the inevitable discovery rule.
Third Circuit Addresses Parameters of Permissible Law Enforcement Investigation Overview Testimony in Precedential Opinion
On May 5, 2020, the Third Circuit addressed the permissible limits and scope of overview testimony provided by a law enforcement officer to summarize the government's case at the beginning of trial. In its first precedential opinion on this issue, the Third Circuit, in United States v. Lacerda, the court held that an officer cannot provide "overview testimony that opines on ultimate issues of guilt, makes assertions of fact outside of the officer's personal knowledge, or delves into aspects of the investigation in which he did not participate."
First, DOJ updated its interpretation of one of the three “fundamental questions” that an evaluating prosecutor should ask. In addition to determining whether the company’s compliance program (1) is well designed and (2) works in practice, prosecutors should also consider (3) whether the program is being applied earnestly and in good faith. The updated guidance explains that this third question requires prosecutors to determine if the program is “adequately resourced and empowered to function effectively.”
FinCEN Releases First Advisory on COVID-19 Illicit Activity, Including New Red Flags for Potential COVID-19 Fraud and Scams
On May 18, 2020, the Department of Treasury's Financial Crimes Enforcement Network (FinCEN) released its first advisory to financial institutions about detecting and preventing COVID-19 fraud. The guidance provides financial institutions with 22 red flag indicators to help identify potential illicit activity related to the pandemic, such as price gouging and hoarding medical supplies; fraudulent cures, tests, and vaccines; and non-delivery scams. FinCEN plans to issue additional advisories about financial crimes related to the pandemic in the future.
On April 17, 2020, in United States v. Costanzo, the Ninth Circuit upheld the conviction of a defendant under the â€œstingâ€ money laundering provision, ruling that the defendant's bitcoin sales to undercover agents had the requisite effect on interstate commerce as the sales used internet-enabled and cellular network connected devices.
In a letter released Thursday, April 16, 2020, the U.S. Attorney for the Eastern District of Pennsylvania called on area hospitals, health systems, and other providers to join the government's fight against coronavirus-related fraud. Hospitals, providers, and other health care institutions are on the front lines of the coronavirus pandemic and know first-hand the challenges in obtaining critical supplies. They also are in a unique position to identify COVID-19-related fraud, such as offers to sell non-existent or fake equipment and price gouging of supplies.
FinCEN Imposes Civil Money Penalty on Former Bank Officer for Failing to Adequately Staff Bank's AML Compliance Function and for Capping Bank's Suspicious Activity Reports
In February, 2018, FinCEN and the Office of the Comptroller of the Currency imposed a $185 million civil money penalty on U.S. Bank N.A. for willful violations of the Bank Secrecy Act (BSA), including failing to establish and implement an adequate anti-money laundering (AML) program and failing to report suspicious activity. On March 4, 2020, FinCEN imposed a $450,000 civil money penalty on the Bank's former Chief Operational Risk Officer for his role in these failures.