Financial Crimes Compliance Attorney
We Help Companies and Financial Institutions Avoid Federal Penalties Through Comprehensive and Effective Financial Crimes Compliance
Financial Crimes Compliance Team Lead
Former DOJ Trial Attorney
Contact John directlyFinancial crime prevention and prosecution are top priorities for the U.S. Department of Justice (DOJ), Federal Bureau of Investigation (FBI), and other federal agencies. To uncover and prosecute financial crimes, federal authorities leverage the substantial resources they have at their disposal, and they target companies and financial institutions that lack the compliance mechanisms needed to meet all pertinent statutory and regulatory requirements.
At Oberheiden P.C., we help companies and financial institutions avoid federal scrutiny — and we help them withstand federal scrutiny when necessary. We do this by offering custom-tailored financial crimes compliance solutions. Our lawyers and consultants work closely with our clients’ executives and key stakeholders to assess their needs, and then they rely on their combined federal experience to craft compliance programs that are comprehensive, actionable, and flexible enough to allow for adaptation as companies’ and financial institutions’ needs change over time.
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Key Areas of Financial Crimes Compliance
Financial crimes compliance is an extremely complex area that presents risks for companies and financial institutions of all sizes. Federal laws and regulations prohibit businesses, banks, and other entities not only from engaging in certain practices, but from executing transactions with certain entities as well. Companies and financial institutions also owe various reporting obligations to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and other federal authorities, and failure to meet these requirements can trigger scrutiny that can uncover other violations if targeted entities do not have effective compliance programs in place.
So, what does it take for companies and financial institutions to maintain financial crimes compliance? The answer varies from entity to entity. Requirements vary based on factors ranging from industry and size to transaction value and counterparty. With this in mind, some key areas of financial crimes compliance that U.S. companies, foreign companies, banks, and other financial institutions may need to address include:
Corporate Fraud
Corporate entities must comply with numerous federal laws and regulations in the financial realm. These laws and regulations, such as the Sarbanes-Oxley Act of 2002 and Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, impose requirements and prohibitions in multiple areas—from corporate accounting practices to recordkeeping and public disclosure.
Financial Institution Fraud
Financial institutions are also subject to a bevy of statutory and regulatory obligations. From stepping in to prevent fraudulent transactions to complying with anti-money laundering (AML) and know-your-customer (KYC) requirements, banks and other institutions play a gatekeeping role, and they can face substantial risks in the event of noncompliance.
Securities and Commodities Fraud
Companies, financial institutions, brokerage firms, and other entities and individuals also have extensive compliance obligations under federal securities and commodities laws. From misrepresentations and omissions to identity theft and prohibited marketing practices, numerous allegations can lead to intense federal scrutiny of entities’ compliance efforts.
Cryptocurrency and Digital Assets Fraud
Cryptocurrency and digital assets fraud is a growing area of concern for the DOJ, FBI, and other federal authorities. Companies, institutions, firms, and individuals doing business in this space must ensure that they have a comprehensive understanding of the laws and regulations that apply, and they must implement adequate compliance policies and procedures to prevent fraud.
Federal Reporting Compliance (FinCEN and IRS)
Under the Bank Secrecy Act (FSA), Foreign Account Tax Compliance Act (FATCA), and other laws, companies, institutions, firms, and individuals can owe various reporting requirements to FinCEN and the Internal Revenue Service (IRS). Failure to maintain federal reporting compliance can lead to substantial penalties—including criminal penalties in many cases.
Office of Foreign Assets Control (OFAC) Compliance
The Office of Foreign Assets Control (OFAC) has oversight and enforcement authority with respect to financial transactions involving foreign entities and individuals. Companies and financial institutions involved in these transactions must maintain strict OFAC compliance, as failure to do so can lead to asset seizures, federal investigations, and other consequences.
Health Care, Mortgage, Consumer, and Insurance Fraud
Many federal authorities target financial crimes in specific industries. For example, the U.S. Department of Health and Human Services’ Office of Inspector General (DHHS OIG) investigates providers and other entities for health care fraud, while the U.S. Federal Trade Commission (FTC) investigates companies and financial institutions for mortgage fraud, insurance fraud, and other financial crimes that affect consumers.
Government Program Fraud
Federal authorities aggressively target companies, financial institutions, and individuals for government program fraud. This area of federal criminal enforcement came into the spotlight during the height of the recent pandemic, with fraud under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program costing taxpayers tens of billions of dollars in a short period of time. Today, federal authorities are attuned to the risk of government program fraud, and they are closely scrutinizing entities and individuals that apply for relief.
Political Financial Crimes
Financial crimes in the political arena are another priority area for federal authorities. We help elected officials, politicians, committees, and other organizations maintain compliance and avoid prosecution for political financial crimes.
Money Laundering, Conspiracy, and Other Federal Crimes
Along with the financial crimes discussed above (among others), the DOJ, FBI, and other authorities also routinely pursue investigations targeting money laundering, conspiracy, and other federal crimes. These crimes carry substantial penalties, and companies and financial institutions must ensure that their compliance programs are adequate to withstand scrutiny in the event of a federal inquiry.
7 Key Elements of an Effective Financial Crimes Compliance Program
Regardless of a company’s or financial institution’s specific compliance obligations, its financial crimes compliance program should consist of several core elements (potentially among various others). As a baseline, an effective financial crimes compliance program should include:
- Financial Crimes Compliance Needs Assessment – Companies and financial institutions should work with their counsel to comprehensively identify their specific areas of need.
- Evaluation of Existing Compliance Policies and Procedures – After identifying their areas of need, companies and financial institutions should assess the efficacy of their existing compliance policies and procedures.
- Compliance Program Development – With a clear understanding of what is necessary, outside counsel can develop a comprehensive and custom-tailored financial crimes compliance program.
- Compliance Program Implementation and Training – Financial crimes compliance programs are only effective when properly implemented. All relevant personnel should receive training that is appropriate to their individual roles.
- Monitoring and Auditing – To identify and address compliance deficiencies as efficiently as possible, companies and financial institutions must monitor and audit their compliance efforts on a routine basis.
- Enforcement – Companies and financial institutions must also adopt effective enforcement mechanisms to remedy and deter compliance violations.
- Documentation and Investigation Preparedness – To demonstrate compliance and withstand federal scrutiny when necessary, companies and financial institutions must thoroughly document their compliance efforts, and they must have protocols in place for responding to federal financial crimes investigations.
FAQs: Maintaining Financial Crimes Compliance for Companies and Financial Institutions
Do All Companies Need a Financial Crimes Compliance Program?
All companies should assess the need for a financial crimes compliance program. Needs vary widely based on company size, industry, geographic reach, and other factors. While not all companies will need a lengthy set of compliance policies and procedures, all companies should ensure that their personnel have an adequate understanding of the legal risks their business activities entail.
Do All Financial Institutions Need a Financial Crimes Compliance Program?
Generally, all financial institutions need to address financial crimes compliance. From maintaining KYC and OFAC compliance to providing adequate internal training regarding identity theft and customer fraud, banks and other institutions need to ensure that they are taking all necessary steps to avoid federal prosecution for financial crimes.
Federal authorities enforce financial crimes compliance through various means. Authorities such as the DOJ and FBI routinely conduct financial crimes investigations, often relying on information from whistleblowers and other third-party sources to identify targets. When conducting investigations, federal authorities can gather additional information through subpoenas, civil investigative demands (CIDs), and various other judicially enforceable requests for records and statements.
What Are the Penalties for Federal Financial Crimes?
The penalties for federal financial crimes vary from one statute to the next. Broadly, federal financial crimes carry the potential for fines and prison time, and large-scale prosecutions can present risks for multi-million-dollar financial liability and years of imprisonment for executives and other individuals.
Should Companies and Financial Institutions Engage Outside Counsel for Financial Crimes Compliance?
Due to the risks of failing to maintain financial crimes compliance, companies and financial institutions should engage outside counsel to assist with developing, implementing, auditing, and enforcing their compliance programs. At Oberheiden P.C., we work with companies and financial institutions across the United States, and our lawyers and consultants rely on their experience inside the federal government to help our clients make informed and strategic decisions.
Speak with a Financial Crimes Compliance Attorney or Consultant at Oberheiden P.C.
If you need to know more about financial crimes compliance, we invite you to schedule a complimentary initial consultation at Oberheiden P.C. To speak with a senior compliance lawyer or consultant in confidence, please call 888-680-1745 or request an appointment online today.