Ashcroft Law Firm

Fighting Corporate Fraud

U.S. Attorney General Ashcroft took the helm at the U.S. Department of Justice (“DOJ”) in 2001, months before several corporate scandals festering in the 1990s erupted into major maladies. Corporate executives implicated brought down their companies and damaged investor confidence, wiping out workers’ incomes, retirement accounts and life savings, casting shadows over American business integrity and the free-market system.
On July 9, 2002, President Bush formed the Corporate Fraud Task Force, which enabled Attorney General Ashcroft, with lawyers from the U.S. Department of Justice and partners in the new Task Force, to move swiftly and decisively against corporate corruption.

The results were dramatic. In its first 30 months, the Task Force filed more than 480 criminal cases against over 990 defendants – corporate executives, attorneys, accountants, stock brokers, investment advisors and more – and convicted over 600 corporate criminals, including those from Enron, WorldCom, ImClone and Adelphia. Additional achievements include:

⦁ 77 Chief Executive Officers and/or Presidents convicted
⦁ 31 Chief Financial Officers convicted
⦁ 15 corporate entities convicted
⦁ 11 Chief Operating Officers convicted
⦁ 67 corporate Vice-Presidents convicted
⦁ 11 General Counsels and/or attorneys convicted

Confronting Price-Fixing, Cartels and Collusion

Secret agreements among competitors, cartels and collusion to fix prices, allocate customers or reduce output are all detriments to fair economic competition, and illegal under U.S. Antitrust laws. The DoJ pursued cartels as its top priority in antitrust enforcement. Companies participating in cartels commit fraud against their customers. Severe prison sentences are the single most successful deterrent to anticompetitive cartel activity.
Once President Bush signed the 2004 Antitrust Criminal Penalty Enhancement and Reform Act, strengthening criminal antitrust penalties and the DoJ’s detection and prosecution efforts, there was over a 17% increase in grand juries investigating cartel behavior under Attorney General Ashcroft’s expert direction. The results included:

⦁ 123% increase in jail-time days imposed for criminal antitrust violations
⦁ 20% increase in the number of individuals sentenced to jail for criminal antitrust crimes
⦁ 847% increase in restitution to victims of criminal antitrust crimes
⦁ 26% increase in fines for merger filing violations
⦁ 2.4% increase in number of merger cases filed as a percentage of merger transactions filed

Taking On Health, Safety and Environment Fraud

Promoting the health and safety of citizens by enforcing legal requirements is also part of the firm’s track record. Under Attorney General Ashcroft, the Department of Justice obtained record-breaking payments from polluters; protected drinking water supplies; mandated the proper storage, treatment, and disposal of hazardous wastes and chemical substances; called for facilities to develop emergency response plans and assured that pipeline safety took precedence.
The Department of Justice also won benefits for human health and the environment, providing a strong return on taxpayer dollars. Setting new records for enforcement and protecting the nation’s health, welfare and environment, the courts imposed more than $181 million in civil penalties for violations in environmental cases in 2004, second only to the previous year’s record recovery of $203 million, about $80 million more than any previous year in the DoJ’s enforcement history.
In a landmark Clean Water Act enforcement action against a pipeline business, the DoJ recovered the largest civil penalty ever from a single company– $34 million. It also secured a comprehensive repair and maintenance agreement for the 5,500-mile pipeline, which had spilled 1.45 million gallons of oil across five states. And the DoJ won the largest civil penalty settlement ever in an EPA wetlands enforcement case that year.
Additional achievements include:
⦁ Setting new records for obtaining commitments by polluters
⦁ Setting new records for civil penalties under the environmental laws
⦁ Attaining the largest civil penalty settlement in an EPA wetlands enforcement case, $1.8 million, against the Yellowstone Mountain Club
⦁ Obtaining a nearly $60 million, 8-company natural resource damage settlement to restore natural resources, second only to the 1991 Exxon Valdez consent decree

Successful Civil Settlements

The Civil Division and U.S. Attorneys recovered over $5.7 billion in settlements and judgments in just four years, with almost half of $13.4 billion recovered after the False Claims Act was strengthened in 1986. Healthcare alone restored $4.46 billion to the U.S. Treasury from 2001 to 2004.
Other success stories include a $49 million settlement with Shell Oil; and, a $162.7 million settlement with Shell Oil, Exxon, Phillips Petroleum, Burlington Resources, Marathon Oil, and Unocal – for allegations that they underpaid royalties for oil extracted from federal lands. These restored $440 million in federal funds, plus an additional $10 million to Native Americans for losses suffered on tribal lands.
Defending civil laws, Ashcroft’s record includes:
⦁ 44% increase in civil fraud settlements and judgments, totaling about $5.7 billion in 2004 from 2003
⦁ 56% increase in civil fraud settlements and judgments in whistleblower cases, totaling over $4.4 billion from 2001 to 2004 compared to the previous four years
⦁ 103% increase in whistleblower shares, over $803 million in 2001-2004 compared to the previous four years
⦁ 73% increase in healthcare fraud settlements and judgments, approximately $4,5 billion in 2001-2004 compared to the previous four years
⦁ 12% increase in Defense Department fraud settlements and judgments, totaling $583 million in 2001-2004 compared to the previous four years

Aggressive Prosecution Record

The Ashcroft record reflects the firm’s deep experience and enforcement expertise. We can and have served as third-party reviewer in the following settings:
⦁ Approved to serve as World Bank Group Integrity Office Compliance Advisor / Monitor
⦁ Served as United States Department of Justice Third-Party Monitor;
⦁ United Nations Independent Professional Ethics and Internal Compliance Expert;
⦁ Serving as United States Department of Justice Independent Review Organization
⦁ Served as Office of Thrift Supervision Independent Review Consultant
⦁ Served as Office of the Comptroller of the Currency Independent Review Consultant
⦁ Selected by the U.S. Trustee as Corporate Governance, Special Investigations, and International Regulatory Consultant
Our firm ensures compliance with complex settlement agreements and applicable fraud, abuse and anti-corruption laws (US FCPA), the United Kingdom’s Bribery Act (UKBA), and various other nations’ public and private corruption laws and regulations. We also assist with companies’ efforts to develop, implement, monitor and audit best-in-class compliance programs and compliance-related policies and procedures. We develop and evaluate compliance training, provide formal progress reports to governments, investigate allegations of illegal or unethical conduct, and address other operational responsibilities.

SOURCES: Preserving Life and Liberty:  The Record of US DOJ 2001-2005 (Various pages); www.justice.gov