Is the center of the corporate crime universe shifting from New York City to Washington, D.C.?

Historically, the belly of the corporate crime beast was based in Manhattan, home to Wall Street and the Southern District of New York.

But with increasing focus on the Foreign Corrupt Practices Act (FCPA), money laundering and currency manipulation cases — all based at Main Justice — major law firms are bolstering their Washington, D.C. presence.

Case in point — Debevoise & Plimpton.

Earlier this month, David O’Neil, the former head of the Justice Department’s Criminal Division, signed on with Debevoise & Plimpton — not in New York City, but in Washington, D.C.

“The Southern District of New York is a tremendous office with a long and storied tradition. It is always going to be a powerhouse office,” O’Neil told Corporate Crime Reporter in an interview last week. “I have witnessed in my time in the Department a significant growth in the work that Main Justice is doing. It is not that the Southern District is doing less. It’s that Main Justice is doing more. There are a number of reasons for that. Some are the result of the U.S. Attorney’s Manual, which requires that the Fraud Section have a role in every Foreign Corrupt Practices Act (FCPA) case. Much of it is FCPA driven.”

“When I started out, I actually worked some FCPA cases in private practice. But at that time, it was more of a niche practice. It was not the same kind of focus that it is now.”

“Today, in some ways, white collar practice is synonymous with FCPA practice. As a result, in every FCPA case, Main Justice’s Fraud Section is going to be an active player. That just necessarily means that Main Justice is going to be playing a central role in those case. The same is true of tax cases. Bringing tax cases requires the approval of Main Justice.”

“And then I would point to some of the currency manipulation cases — which straddle the Criminal Division and the Antitrust Division. They also have a heavy Main Justice center of gravity.”

O’Neil was a lead prosecutor in the BNP Paribas case — one of the largest corporate crime plea agreements in recent memory.

“The BNP Paribas case is instructive for future cases,” O’Neil said. “Leading up to that case, it was widely reported that there were concerns raised about the collateral consequences of the bank pleading guilty. In fact, what we have seen is that the bank remains healthy despite the guilty plea.”

“Companies are going to come into the Department and argue that they can’t take a guilty plea because of the potential disastrous effects on its business or its existence. That argument was difficult to make before BNP Paribas and Credit Suisse. It’s that much more difficult now in light of those two guilty pleas.”

“The Department will take seriously arguments about collateral consequences, but I don’t think that will be a reason not to pursue a guilty plea when the Department otherwise would have.”
Is the FCPA pipeline still loaded?

“The FCPA is going to continue to be an active area,” O’Neil said. “I don’t think we are anywhere near the end of the pipeline. In fact, you see the Department devoting greater resources, including through the creation of a dedicated FCPA unit at the FBI. My prediction would be that FCPA cases continue at their current pace or increase.”

What about new directions at the Department?

“Money laundering, Bank Secrecy Act and cases involving violations of OFAC (Office of Foreign Assets Control) sanctions are going to increase,” O’Neil said. “Obviously, this past year saw a few significant ones, including the BNP Paribas case. That’s going to be an area that’s going to be more active.”

“There is a real focus on bringing the same level of rigor and focus to the money laundering cases as there currently is on fraud cases. And you will probably see cases involving both FCPA and money laundering or FCPA and export control. That trend is going to increase. And that will become another core area of focus by the Department.”

Do foreign companies tend to get harsher treatment from the Department?

“I don’t think foreign companies are treated more harshly because they are foreign companies,” O’Neil said. Foreign companies have been involved in some of the larger resolutions. Primarily that’s because of the reasons that the Attorney General and others said publically. In the BNP Paribas case the volume of sanctioned transactions was much larger than in other cases. The cooperation by the company was deficient. And compliance was problematic. And it was those factors that led to the decision to require a guilty plea in that case. And that would be true whether the company was a foreign company or a domestic company.”

[For the complete q/a transcript of the Interview with David O’Neil, see 29 Corporate Crime Reporter 4(13), January 26, 2015, print edition only]