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DOJ Announces New Task Force on Market Integrity and Consumer Fraud

The U.S. Department of Justice (DOJ) earlier this week announced that it was disbanding the Financial Fraud Enforcement Task Force, established under the Obama Administration. In its place, pursuant to an Executive Order, the DOJ plans to establish the Task Force on Market Integrity and Consumer Fraud (the Task Force). The purpose—according to a DOJ press release—is to deter fraud on consumers, especially veterans and the elderly, and the government, specifically as it relates to health care.

Additionally, the Task Force will focus on digital currency fraud, money laundering, securities and commodities fraud, and "fraud affecting the general public," the Executive Order states. It will provide guidance both for the investigation and prosecution of specific fraud cases and provide recommendations "on fraud enforcement initiatives."

The Task Force is a multiagency effort. Although the DOJ will lead the group under Deputy Attorney General Rod Rosenstein, the Executive Order directs him to include a host of other federal agencies—from the Secretary of Education to the Commissioner of Social Security. Of the many agencies named in the Executive Order, representatives from three of the agencies joined Deputy AG Rosenstein in the formal announcement: the Bureau of Consumer Financial Protection (CFPB), the U.S. Securities and Exchange Commission, and the Federal Trade Commission.

The Acting Director of the CFPB, Mick Mulvaney, echoed a sentiment shared by all four agencies, saying "[i]nteragency cooperation is incredibly important to these complex issues." Acting Director Mulvaney also favorably cited the "growing cooperation" among the DOJ and other federal and state agencies.

The announcement comes just two months after the Deputy Attorney General announced new DOJ policies that highlighted interagency cooperation. These policies, which will be added to the U.S. Attorneys' Manual, advise federal prosecutors on how to avoid duplicative penalties—as well as directing U.S. Attorneys to coordinate with other federal and state regulators to ensure that duplicative fines are not imposed. In addition, U.S. Attorneys are instructed to consider the overall fine that may be imposed in order to guarantee that the amount of fines, penalties, and forfeiture is appropriately tailored.

This new Task Force goes well beyond these new DOJ policies. Beyond providing a mechanism to help coordinate interagency fraud prosecutions and enforcement initiatives, it also is intended to advise the Attorney General and Congress on interagency cooperation. Specifically, the Task Force is directed to advise the Attorney General on ways to "enhance cooperation" among federal, state, local, and tribal authorities "in the investigation and prosecution of fraud." It is also tasked with proposing to Congress any changes in rules, regulations, or policies that would "improve the effective investigation and prosecution of fraud and other financial crimes."

Copyright © by Ballard Spahr LLPNational Law Review, Volume VIII, Number 194



About this Author

Kaplinksy, partner, New York, finance

Alan S. Kaplinsky is Co-Practice Leader of the firm's Consumer Financial Services Group, which has more than 115 lawyers. Mr. Kaplinsky devotes his practice exclusively to counseling financial institutions on bank regulatory and transactional matters, particularly consumer financial services law, and defending financial institutions that have been sued by consumers in individual and class action lawsuits and by government enforcement agencies. Visit Mr. Kaplinsky's profile in Wikipedia.

Marjoree Peerce Litigator  Criminal Defense Ballard Law FIrm

Marjorie J. Peerce is a litigator, with a practice focus on white collar criminal defense, regulatory matters, and complex civil litigation. In her more than 30 years of practice, she has handled matters across the criminal and regulatory spectrum. She is Co-Managing Partner of the firm's New York Office.

Ms. Peerce appears in New York state and federal courts, as well as in federal districts around the country. She has handled criminal and regulatory investigations concerning, for example, violations of the Internal Revenue Code, securities fraud (including Bitcoins), the Foreign Corrupt Practices Act (FCPA), the Bank Secrecy Act, government contract procurement and subsidy fraud, mail fraud, bribery, accounting fraud, immigration fraud, health care fraud, environmental matters, commodities fraud, computer fraud and hacking, and criminal customs investigations. Ms. Peerce has handled a significant number of matters with the SEC, as well as with FINRA and the CFTC. She has handled numerous matters with the New York Attorney General in a variety of areas. She also regularly represents individuals in myriad matters in the Criminal and Supreme Courts in New York City.

Andrew D'Aversa, Ballard Spahr, Philadelphia, Litigation White Collar Attorney

Andrew N. D'Aversa is an associate in the Litigation Department and was a summer associate with the firm in 2016. He focuses his practice on white collar defense. He has experience in matters involving money laundering and the application of state money services statutes and regulations to virtual currency and related products. Andrew maintains an active pro bono practice working with the Pennsylvania Innocence Project. Andrew is a frequent contributor to Money Laundering Watch, Ballard Spahr’s blog focused exclusively on money laundering issues.