DOJ Appoints New Leaders of Corporate Enforcement Program

The creation of two new leadership positions within the Department of Justice sends another strong signal to the private sector that federal law enforcement is pouring resources into corporate investigations to identify potential national security violations such as evasion of sanctions and export controls, and material support for terrorism. On Monday, September 11, the Department announced the creation of two new leadership positions in its National Security Division; Ian C. Richardson, a former Assistant U.S. Attorney in the Eastern District of New York focused on national security corporate prosecutions, will serve as Chief Counsel, and Christian J. Nauvel, formerly Senior Counsel to the Assistant Attorney General for DOJ’s Criminal Division, will be Deputy Chief Counsel for Corporate Enforcement.

Key Takeaways

These appointments are part of the Justice Department’s broader efforts to target corporate criminal conduct, particularly where companies are accused of violating laws passed to protect the security of the United States. Deputy Attorney General Lisa Monaco has previously described the “new level of intensity and commitment to sanctions enforcement” in particular in recent years, reiterating on several occasions that sanctions are “the new [Foreign Corrupt Practices Act].” That new level of intensity also is meant to encourage companies to fully investigate any potential violations and disclose such conduct to the Department. In a June 2022 speech, she explained:

The growth of sanctions enforcement follows the path that the FCPA traveled before it. Both FCPA and sanctions enforcement are relevant to an expanding number of industries. They have extended beyond just U.S. actions to an increasingly multilateral enforcement regime. And they both reward companies that develop the capacity to identify misconduct within the organization, and then come forward and voluntarily disclose that misconduct to the department.

Commenting on the appointments, Assistant Attorney General Matthew G. Olsen explained this effort is aligned with the Division’s core mission to protect national security: “In an era of renewed nation-state competition, corporations are on the front lines of the fight to defend our national security.” He referred to an increasing number of violations of national security laws coming to light through the Division’s investigations, and said that “enforcing the laws that deny our adversaries the benefits of America’s innovation economy and protect technologies that will define the future is core to the National Security Division’s mission.”

As part of the Department’s broader efforts to prosecute corporate conduct believed to threaten national security, DOJ also is adding more than 25 prosecutors to investigate and prosecute economic crimes like sanctions evasion and export control violations. This expansion was announced in a March speech by Deputy Attorney General Monaco, when she also previewed the establishment of the Chief and Deputy Chief Counsel positions the Division filled this week. Monaco stated “these actions demonstrate the breadth of the department’s commitment to combating corporate crime, particularly where it places our collective security at risk.” She specifically called out the Division’s increasing focus on corporate sanctions violations, saying it “will work closely with U.S. attorneys’ offices and the Criminal Division to apply enforcement strategies that have proven their worth in other areas of the department.”

The creation of these leadership roles reflects a concern regarding the increasing number of violations of laws that protect national security and an interest in strengthening the National Security Division’s corporate criminal enforcement efforts in cases involving, for example, exports of contraband in violation of sanctions and which raise concerns that the United States financial system is being used to fund terrorist organizations. Monday’s press release comes on the heels of DOJ unsealing an unprecedented criminal resolution on Friday, September 8, involving a shipping company which transported close to 1 million barrels of crude oil from Iran in violation of sanctions. The company, Suez Rajan Limited, pled guilty in April to conspiracy to violate the International Emergency Economic Powers Act. As part of its sentence, the court ordered the company to pay a nearly $2.5 million fine and imposed three years corporate probation. Additionally, Empire Navigation, the company operating the vessel carrying the contraband oil, agreed, as part of a deferred prosecution agreement, to cooperate. As part of the agreement, Empire transported the seized oil to the United States at its own expense, according to Friday’s press release.

The National Security Division—specifically the Counterintelligence and Export Control Section—is among the departments involved in investigating and prosecuting the criminal matter and continues to be involved in ongoing related investigations and litigation, including a civil forfeiture action brought concerning the contraband Iranian oil now in the United States. That action is based on terrorism and money laundering statutes, according to DOJ.

Conclusion

The expansion of the Corporate Enforcement Program and establishment of new leadership to spearhead these efforts is a clear indication that the Department is serious about its interest in targeting companies for sanctions violations and other allegations of corporate criminal conduct in areas implicating national security. The Iranian oil case highlights these efforts and is just one example of the increasing focus within corporate criminal enforcement on investigating and prosecuting sanctions violations and any other conduct in violation of export control measures or otherwise threatening national security.

Attorneys in Ballard Spahr’s White Collar Defense/Internal Investigation Group have deep experience in advising corporate clients on evaluating and developing strong compliance programs in light of changes in federal enforcement trends as well as assisting clients in navigating thorny investigations.  Please contact us for more information.

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