Joshua Hill, Jr., Christine Y. Wong, and Amanda Treleaven
Investigations + White Collar Defense and Securities Litigation
David Anderson, the recently appointed United States Attorney for the Northern District of California, has announced a corporate fraud “strike force” designed to pursue the “investigation and prosecution of corporate fraud with an emphasis on speed and the broadest possible deterrent effect.” The strike force will make use of tools more commonly associated with organized crime and drug prosecutions than white–collar matters, including wiretaps, search warrants, and criminal complaints. Such tools have historically been little used in investigations of alleged corporate fraud in the Northern District of California.
Anderson also announced his leadership team, which includes the former chief of the district’s organized crime strike force, a prosecutor in the US v. Salman insider trading case, and Assistant U.S. Attorneys with extensive experience in bank, wire, and securities fraud.
On March 5, 2019, shortly after the announcement of the corporate fraud strike force and in his first public remarks as a U.S. Attorney, Anderson stated that the central question for him was, “How can I use the time of my Assistant U.S. Attorneys more efficiently to move the cases more quickly to disposition?” Like most other jurisdictions, the Office in the Northern District of California has typically pursued its corporate fraud cases through the use of document requests, subpoenas, voluntary interviews, proffer agreements, and other information-gathering tools with analogues to civil litigation. Additionally, in recent years the Office appears to have relied primarily on grand jury indictments in order to prosecute cases, rather than criminal complaints. Now, Anderson has emphasized that he intends to use all the means available to his Office as granted by Congress, specifically calling out wiretaps and search warrants.
In his public remarks on March 5 and as reported to a leading legal publication, Anderson also highlighted a goal of “operational efficiency” and stated that he will call upon his prosecutors to offer their best plea deal at the outset, set a firm deadline to accept, and then, if the defendant does not take the deal, move forward to trial. With both this statement and the creation of the corporate fraud strike force, Anderson is signaling an intention to speed up the process for gathering necessary evidence, reduce the time it takes to reach a plea deal, and, for defendants who decline an early agreement, seek substantial penalties when the case proceeds to trial.
Potential targets of this newly aggressive approach face the risk of becoming ensnared in costly and intrusive investigations that uncover no evidence of wrongdoing. It remains to be seen whether the office will be as prolific in using such techniques as its counterpart in the Southern District of New York has been. In 2017 (the most recent year for which information is available), wiretaps were used in 15 cases involving fraud in the Southern District of New York. In the Northern District of California, the number was zero. As tools such as wiretaps and search warrants have been little used in these types of cases in California previously, the Office may face a new host of challenges to deploying them in this context.
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