DOJ Teases Imminent Cases Against “Some of the Largest Corporations”
Explosive Allegations in Wall Street Journal Suggest Big Bank Potentially Facing DOJ Scrutiny
Flickr photo by David Shankbone.
Senior DOJ official John Carlin told the Financial Times to expect “cases in the weeks to come” against “some of the largest corporations” in the U.S.
The Justice Department announced plans to ramp up corporate enforcement -- and to play extra attention to corporations that avoided prosecution through leniency agreements.
Public Citizen released a report listing 20 major corporations that recently resolved criminal investigations through these agreements. The American Prospect’s David Dayen describes the report as a “cheat sheet” to show the DOJ where to start scrutinizing rogue companies.
Public Citizen president Robert Weissman and I sent a letter today to Attorney General Merrick Garland and Deputy Attorney General Lisa Monaco urging them to follow through on their promise to crack down on corporate crime.
Now the Wall Street Journal’s Dylan Tokar has revealed explosive allegations against JPMorgan Chase — a top corporate recidivist that has received no fewer than four leniency agreements in the past 10 years.
Tokar reports that a former JPMorgan compliance executive is suing the New York-based banking titan for firing her for raising concerns the bank provided misleading reports to the DOJ and SEC regarding reforms the bank agreed to undertake — reforms that were among the conditions of the 2016 leniency agreement the bank entered to resolve a Foreign Corrupt Practices Act probe.
Tokar reports:
Ms. Williams in May 2019 reviewed a draft of a report meant to update the Justice Department on JPMorgan’s compliance with the nonprosecution agreement, according to her complaint. Her complaint said the draft report made numerous misrepresentations, including claims by the bank that it had a risk-ranking methodology and invoice controls when it didn’t.
This sounds an awful lot like a description of a corporation violating the terms of its agreement — the sort of behavior for which Deputy Attorney General Monaco promised would bring “serious consequences” from the DOJ.
While the 2016 leniency agreement expired in 2019, JPMorgan Chase resolved a subsequent criminal fraud investigation with its fourth leniency agreement in ten years in 2020, and is bound by that agreement’s terms until 2023.
The question is, if the allegations are true, will the DOJ hold JPMorgan accountable?
Big Business Blotter news roundup:
TOP NEWS
DOJ non-prosecution records are target of law librarian's suit - Reuters
A lawsuit in Washington, D.C., federal court seeks greater public access to non-prosecution agreements between the U.S. Justice Department and corporations that have faced misconduct allegations. The public records complaint filed on Friday asks a court to force the Justice Department to release 12 case files from 2015 and 2019 in which the government signed non-prosecution agreements with an array of corporate defendants.
'A significant milestone': Boeing agrees to settle with Ethiopia 737 Max crash victims - USA Today
In court documents filed Wednesday in federal court in Chicago, where Boeing is based, the company admitted that its software was to blame for ET 302's loss of control and destruction, and that the 737-Max was in an "unsafe condition" to fly. Boeing's 737-Max were recertified to start flying again earlier this year. The agreement does not involve monetary compensation to the families as of Wednesday, according to court records, but it does allow victims' families to pursue individual claims in U.S. courts instead of their home country. The crash killed people of 35 nationalities. It allows Boeing to consolidate its 737-Max legal issues to the U.S. while allowing victims' families to access the U.S. legal system, which is more equipped to handle such cases.
Former coal company execs to go on trial for skirting rules - Associated Press
A group of former coal company officials will go on trial in Kentucky next week for allegedly skirting federal rules meant to reduce deadly dust in underground mines. The four men, who worked for now-bankrupt Armstrong Coal, ordered workers at two Kentucky mines to rig dust-monitoring equipment to pass air quality tests, federal prosecutors said. The inhaling of dusty air in mines can lead to an incurable and fatal disease called pneumoconiosis, or black lung, which has killed tens of thousands of coal miners.
AMAZON
Amazon Sued Over Crashes by Drivers Rushing to Make Deliveries - Bloomberg
Ans Rana was in the back seat of his brother’s Tesla Model S when they stopped behind a disabled car just before 9 p.m. on Atlanta’s busy Interstate 75. Seconds later, a blue Amazon.com Inc. delivery van slammed into them from behind—mangling the rear of the car and sending Rana, his brother and father to Wellstar Kennestone Hospital. Rana bore the brunt of the collision, suffering life-changing brain and spinal-cord injuries. [...] In June, Rana filed a lawsuit in Georgia state court, alleging that Amazon is liable for the accident. Central to the complaint: the algorithms, apps and devices the company uses to manage its sprawling logistics operation. Amazon says it isn’t legally culpable because the driver worked for Harper Logistics LLC, one of thousands of small businesses launched in recent years specifically to deliver Amazon packages.
Amazon fined $500,000 for failing to notify California workers about COVID-19 cases - The Verge
Amazon has been ordered to pay a fine of $500,000 for hiding the number of COVID-19 cases at its California workplaces from employees. First reported by the Los Angeles Times, the company agreed to pay the fine and improve the way it tracks cases and notifies workers and local health agencies. Amazon must also inform its warehouse workers in California of the “exact number of new COVID-19 cases in their workplaces” when cases arise.
FACEBOOK
Facebook Faces New Antitrust Lawsuit - NYT
The suit, filed by the now defunct photo start-up Phhhoto, accused the social network of stalling on a deal and then putting it out of business.
The lawsuit, filed on behalf of the Ohio Public Employees Retirement System (OPERS) and Facebook investors, contends that from April 29 through Oct. 21, 2021 Facebook and its senior executives violated federal securities laws by purposely misleading the public about the negative effects its products have on the health and well-being of children and the steps the company has taken to protect the public.
MORE BIG TECH
An Uber fee unfairly impacts riders with disabilities, a DOJ lawsuit says - NPR
According to federal prosecutors, Uber charges an extra fee starting two minutes after a car arrives until the trip starts and that discriminates against people with disabilities who may need more time to get in a vehicle. "People with disabilities deserve equal access to all areas of community life, including the private transportation services provided by companies like Uber," Assistant Attorney General Kristen Clarke for the Justice Department's Civil Rights Division said in a statement.
Apple to pay $30 million to employees subjected to off-the-clock searches - Courthouse News Service
The case hinged on a practice Apple implemented that required employees to show their bags and Apple devices before leaving work. These procedures occurred off the clock; a class of employees sued in 2013, arguing they should be paid for their time undergoing security checks.
Mining deaths lawsuit against major tech companies dismissed - Computer Weekly
The lawsuit against Alphabet, Apple, Dell, Microsoft and Tesla was originally filed in Washington DC in December 2019, by human rights group International Rights Advocates, on behalf of 14 families who accused the technology firms of knowingly aiding and abetting – and subsequently benefiting from – forced labour practices in the Democratic Republic of the Congo (DRC).
PHARMA / MEDICAL DEVICES
kaléo Inc., a Virginia-based pharmaceutical manufacturer, has agreed to pay the United States $12.7 million to resolve allegations that kaléo caused the submission of false claims for the drug Evzio, an injectable form of naloxone hydrochloride indicated for use to reverse opioid overdose. Evzio was the highest-priced version of naloxone on the market, and insurers frequently required the submission of prior authorization requests before they would approve coverage for Evzio.
Surgical device maker Arthrex fined $16M over alleged kickback scheme - FierceBioTech
To resolve the allegations, Arthrex has agreed to pay $16 million, with $2.5 million going to the whistleblower who initially brought the case to the government. As part of the settlement, the Florida-based devicemaker has entered into a corporate integrity agreement with the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG).
WORKER & CONSUMER SAFETY
In a settlement agreement with the U.S. Department of Labor, Smithfield Packaged Meats Corp. has committed to changing its health procedures and training relating to infectious diseases. The action follows a March 2020 Occupational Safety and Health Administration inspection that led OSHA to cite the company under the general duty clause for failing to protect workers from coronavirus hazards at its Sioux Falls facility. As part of the agreement, Smithfield will pay the assessed penalty of $13,494.
A Chinese appliance manufacturer and two of its subsidiaries have agreed to resolve criminal charges for failing to notify the U.S. Consumer Product Safety Commission (CPSC) that millions of dehumidifiers they sold to U.S. consumers were defective and could catch fire. The resolutions are the first corporate criminal enforcement actions ever brought under the Consumer Product Safety Act (CPSA). Gree Electric Appliances Inc. of Zhuhai (Gree Zhuhai), a global appliance manufacturer headquartered in Zhuhai, China, and Hong Kong Gree Electric Appliances Sales Co. Ltd. (Gree Hong Kong) entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed Thursday in the U.S. District Court for the Central District of California. A criminal information filed along with the DPA charges the companies with one felony count under the CPSA of willfully failing to report consumer product safety information to the CPSC.
ANTITRUST
U.S. states file updated antitrust complaint against Alphabet's Google - Reuters
The amended U.S. lawsuit, filed in a federal court in New York late Friday, accuses Google of using monopolistic and coercive tactics with advertisers in its efforts to dominate and drive out competition in online advertising. The lawsuit also highlights Google's use of a secret program dubbed "Project Bernanke" in 2013 that used bidding data to give its own ad-buying an advantage.
“Books have shaped American public life throughout our nation’s history, and authors are the lifeblood of book publishing in America. But just five publishers control the U.S. publishing industry,” the Attorney General continued. “If the world’s largest book publisher is permitted to acquire one of its biggest rivals, it will have unprecedented control over this important industry. American authors and consumers will pay the price of this anticompetitive merger – lower advances for authors and ultimately fewer books and less variety for consumers.”
COMMENTARY
Corporate Crime Pays! - Law Professor Mihailis Diamantis interviewed on the Ralph Nader Radio Hour
"Boeing, a repeat offender who had entered into a settlement with the FAA just less than three years before its first 737 Max crash, over similar safety issues– got away from the DOJ without any oversight of the reform that it promised to implement… Instead, all that Boeing got away with, with the DOJ, was a promise to reform its compliance systems on its own, and then to submit annual reports to the Department of Justice (drafted by Boeing and their in-house attorneys…) to the DOJ. That’s just a promise to do better in the future. Boeing already violated the trust implicit in its Charter to conduct business in a lawful manner."
It’s Time to End Murder by Spreadsheet - Alvin Bragg and Zephyr Teachout in The Nation
Two criminal justice systems, separate and unequal, means we don’t have justice. One criminal justice system is for the wealthy and well-connected, where prosecutors and judges hesitate, negotiate, and, if they even think about bringing criminal charges, are tempted to settle. The other is for poor Black, brown, and vulnerable communities where even before a trial you can be sent to a death trap like Rikers. In 2018, fewer than 40 people employed by major corporations got prison time for any federal white-collar crime, while nearly 20,000 people were federally sentenced for drug crimes. More people went to Rikers yesterday than were ever charged with causing the financial crisis.
“To be sure, these large shareholders probably did not know of the crime in advance, but that may be because they were rationally apathetic about it. Today, they hold the power to control, but exercise it only in exceptional cases.”