New head of DOJ’s criminal fraud section has compliance background

According to reports, the US Department of Justice (DOJ) has hired Glenn Leon, a former compliance officer at Hewlett Packard Enterprise Co., to lead the criminal division’s fraud section, signaling the DOJ’s continued focus on the need for effective corporate compliance programs.

Leon will replace Joe Beemsterboer, a 10-year veteran of the fraud section who has been instrumental in the growth of the healthcare fraud unit. The Fraud Section is the primary economic criminal law enforcement unit nationwide and is responsible for investigating healthcare fraud, corruption, market manipulation, fraud, money laundering and other financial crimes. Leon joined HP in 2014 and spent most of his time as Director of Ethics and Compliance.

Leon’s appointment isn’t entirely unusual, given his years as an assistant U.S. attorney, including three years as a fraud section supervisor. However, it is likely that the selection of a corporate compliance professional for the role was intentional.

In recent years, the DOJ has placed particular emphasis on the effectiveness of corporate compliance programs used to stop violations before they occur. Having such a program is now an expectation for any company seeking leniency from the DOJ. Assistant Attorney General Kenneth Polite made several remarks during NYU Law’s Corporate Compliance and Enforcement Program on March 25, stressing the importance for businesses to invest in improving their compliance and enforcement programs. their internal controls now to avoid violations or risk paying dearly for violations found in the future. He said, “Our message is clear: companies that invest seriously in improving their compliance programs and internal controls will be better viewed by the Department. Support your compliance team now or pay later.

At that same program, Polite previewed a new DOJ policy, which requires CEOs and Chief Compliance Officers (CCOs) to certify that a compliance program is “reasonably designed and implemented to detect and prevent violations of the law…and operates effectively”.

Businesses would be wise to invest the right resources in compliance now, given the DOJ’s continued focus on the issue.

The fact that Leon was a CCO and understands the requirements placed on compliance officers and corporate compliance programs can help alleviate any CCO discomfort with this policy. Certainly, having someone who has lived with and worked through the day-to-day complexities of establishing an effective compliance program in a large international company should ensure that the attention and evaluation of those programs by the Fraud Section will be more accurate and meaningful in resolving corporate criminal investigations. .

More corporate surveillance?

Leon’s appointment likely also signals an added focus on corporate surveillance as a condition for solving criminal cases. When a company resolves a criminal investigation through a deferred prosecution or non-prosecution agreement, the DOJ may order the company to adopt a strict compliance program that must be evaluated by an independent corporate monitor. . A corporate monitor assesses a company’s compliance with the terms of the corporate criminal resolution. In recent guidance, Assistant U.S. Attorney General Lisa Monaco said prosecutors are free to require a corporate monitor when they determine it is appropriate to ensure compliance, a change per over advice offered during the Trump administration disfavoring such post-settlement monitoring. Leon’s compliance experience may also signal a focus on greater diversity among surveillance fellows and more on limiting the cost and scope of such surveillance.

Leon’s appointment will also likely see an expansion of self-reporting programs; companies able to detect, correct, and report violations themselves through an effective compliance program are likely to be viewed more favorably by the DOJ.

Leon’s selection is a signal that the DOJ will exercise scrutiny over the effectiveness of a company’s compliance program and culture.