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Oct. 18 — Legal loopholes in the United Kingdom and European Union make it necessary for international lawyers to work with U.S. attorneys to ensure that white collar crime is prevented and prosecuted, according to international lawyers at a London conference.
Lawyers from around the globe met in London on Oct. 10 to discuss emerging international trends in white collar crime and how partnerships across borders can appropriately address those new issues. Topics included pending legislation in the U.K. and E.U., bribery crimes, and corruption in the sports industry.
All speakers emphasized the need for communication between international attorneys from the beginning of case investigations. Collaboration allows for sharing resources between countries and ensuring defendants aren’t subjected to double jeopardy, they said.
Lawyers also discussed the influence of the U.S.'s prosecution of FIFA, which caused other European nations to reevaluate their own tools and statutes to better pursue future sports corruption cases.
The opening keynote discussion set the tone for the conference and involved questions posed to the chief of the criminal division’s fraud section at the U.S. Justice Department and the director of enforcement and market oversight at the Financial Conduct Authority—the U.K.’s equivalent of the U.S. Securities and Exchange Commission.
Mark Steward, director from the FCA in London, said the relationship between U.S. and U.K. prosecutors has improved over time. Years ago, Steward said U.S. attorneys from the DOJ or SEC could be secretive about their cases.
DOJ Division Chief Andrew Weissmann, Washington, agreed that the relationship had improved, saying that now the standard practice is to involve international prosecutors early on in the process. However, he added that the practice should not just be a habit, but the model for all international white collar crime cases.
Steward said when countries work together, they can better identify which government is in the best position for investigating and trying the case. It also allows all countries affected by a particular crime to feel their interests have been adequately addressed in the outcome and penalty of the case, he said.
Collaboration benefits not just the prosecutors, but the defense as well, Steward said. By conversing early on, international lawyers can ensure their clients are not subjected to double jeopardy by being prosecuted in multiple countries for the same crime, he explained.
Policy differences between U.S. and U.K. on white collar crime prosecution became the center of conversation during a panel on market manipulation—a newly minted crime in the U.K. that went into effect July 2016.
Roger Burlingame, a partner at Kobre & Kim LLP in London and former assistant U.S. attorney in the U.S. Attorney’s Office for the Eastern District of New York’s Criminal Division, offered his opinion “as an outsider.”
The perception abroad is that the U.S. is more aggressive than other countries in pursuing white collar crime cases because of statutory sentences that are longer than most countries’ and offers financial incentives for whistleblowers, Burlingame said.
Defendants are afraid of the U.S. criminal justice system because possible sentencing attached to charges is usually announced consecutively, which makes it sound like defendants face much longer sentences than they end up receiving, he said.
While the U.K. might enjoy “ethically superior” grounds by not paying financial incentives to whistleblowers for market manipulation or insider trading, Burlingame said the U.S. can bring more cases because it receives more tips.
That’s because the U.S. is more practical with prosecutions, he said. U.S. prosecutors are more likely to work with outside counsel when conducting their own investigations, he explained.
“Our principles aren’t going to get in the way of prosecuting wrong-doing,” Burlingame said.
The reason people care about corruption in the sports industry is because sports “teach us universal values in childhood and bind us” as adults, said James D. Gatta, criminal division chief at the U.S. Attorney’s Office for the Eastern District of New York in New York City.
“That’s why it’s important for us as regulators to be concerned about corruption,” Gatta said. “We need to be sure that people understand those values cannot be corrupted.”
Speakers on the panel used the U.S.'s 2015 prosecution of FIFA as a reference point in talking about corruption in the sports industry.
For example, FIFA went largely unregulated until the U.S. got involved, said Judy Krieg—partner at Shepherd and Wedderburn LLP, London, and former financial regulator at the UK Financial Services Authority. Until then, governments struggled to sufficiently investigate the international soccer organization, she said.
“When the U.S. came in with its resources, it cracked [the case] open,” Krieg said.
Gatta, who worked at the U.S. Attorney’s Office that brought charges against FIFA and several high-ranking officials, said in many places feedback seemed to focus on why it had taken so long for a governmental organization to investigate FIFA’s practices.
The U.S. ended up being the only organization with laws that allowed it to prosecute FIFA, said Nathalie Von Taaffe—head of sanctions and anti-corruption compliance for Europe, the Middle East, and Africa at Credit Suisse in London. Even though Switzerland hosts the headquarters of FIFA and more than 40 sports organizations, Von Taaffee said it didn’t have a statute outlawing bribery until 2000.
The same went for many European nations, which limited the venues that could claim jurisdiction, she said.
The U.S. used its RICO laws to show that FIFA officials took an organization with a legitimate purpose and corrupted it with a multi-generational scheme to use bribes in determining where games were hosted and broadcast on TV in addition to who would head the organization, Gatta said.
When the U.S. successfully prosecuted FIFA officials, Krieg said companies in the sports industry suddenly needed to take corruption and bribery statutes—which many European countries now have or are planning to pass soon—seriously.
Von Taaffe agreed, adding that the case gave countries the opportunity to reevaluate the resources and tools available to law enforcement.
“Now is the time to revisit laws,” she said.
The discussions were part of the American Bar Association Criminal Justice Section’s Fifth Annual London White Collar Crime Institute. The event was hosted by Berwin Leighton Paisner LLP on Oct. 10-11.
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Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
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