Today, we introduce what will be a recurring feature at The Legal Pulse, Five Questions for . . . . With this feature, we will engage private lawyers, academics, business leaders, and other professionals in brief conversations on leading legal and regulatory topics of concern to the free enterprise community.
The Legal Pulse: We note that you have done quite a bit of work in the False Claims Act area, which has become notorious for its qui tam/whistleblower provisions. With that in mind, tell us about the Dodd-Frank financial regulation reform bill’s expansion of the whistleblower program at the Securities and Exchange Commission, and how do you think it will impact compliance with and enforcement of laws like the Foreign Corrupt Practices Act?
Jeff Ifrah: It’s hard to know how many successful cases will be brought as a result of these provisions. Certainly the ability to participate in sharing an SEC settlement is very attractive and can be very lucrative to those who bring suit. My fear is that a lot of time and money will be spent as a result of complaints that lack merit.
The Legal Pulse: DOJ, SEC, and other actors in criminal law enforcement have placed a great premium on voluntary disclosure and other cooperative actions by individuals and companies. With penalties going up and government becoming increasingly aggressive, do you expect a concurrent shift in the corporate suites away from cooperation and disclosure, and towards more of an adversarial posture?
Ifrah: No way. Even in the rare cases where probation rather than prison time is a likely sentencing option, it’s not realistic to adopt an aggressive adversarial posture with the government. That does not mean to imply that your role as defense counsel is to lie down and be trampled. The best approach is to adopt a strategy of working with the government toward a non-prosecution or deferred prosecution agreement. To successfully do so, you need to build trust and confidence with the government from Day One and to project to the government that you know the facts of your case and that you understand the variety of tools available both to you and to the government.
The Legal Pulse: In the area of health care, where do you see U.S. Attorneys and other criminal enforcers focusing their attention currently, and over the next year?
Ifrah: It’s interesting: There have not been a whole lot of public statements about health care enforcement priorities. The lack of media coverage regarding notable and sizable health care settlements appears to reflect the fact that DOJ’s enforcement priorities lie elsewhere. Certainly, traditional health care fraud, such as providing unnecessary medical services, will continue. I think many of us expected to see a rise in Part D-related fraud and I don’t believe that has actually happened.
The Legal Pulse: DOJ recently asked the U.S. Sentencing Commission to investigate what it sees as widely disparate sentences in financial fraud cases. What do you think motivated this request, and what will result from it?
Ifrah: It’s not clear to me that DOJ’s request was motivated by financial crimes cases. It seems to me that DOJ had other concerns, such as child pornography. To the extent that DOJ’s request was motivated by financial crimes cases, I just don’t see the argument. Financial crimes cases continue to generate the highest sentences time and time again.
The Legal Pulse: Federal law enforcement officials have numerous options when weighing whether and how to take legal action against a business or an executive or employee, i.e. many laws and regulations can be enforced administratively, civilly, or criminally. What can targets of government action and their lawyers do to steer enforcers away from criminal action?
Ifrah: Cooperation, cooperation, cooperation. Bearing in mind that each case is different and cooperating is NOT the same as rolling over, helpfully providing information is a client’s best stance. An effective starting point can be demonstrating how your client’s level of liability pales in comparison with other folks on the government’s radar screen, but in my experience that’s often just not enough. The government now wants something from your client, and your best shot at avoiding prosecution is to deliver honest, helpful and timely information.