Despite the collapse at trial of a major foreign bribery case last year that used recordings and undercover agents to gather evidence, the Federal Bureau of Investigation isn’t going to back off such traditional law enforcement techniques in white collar cases.
“We will do it again — see you out there,” Ronald Hosko, assistant director of the FBI’s Criminal investigative Division said today at a compliance conference hosted by Dow Jones in Washington, D.C.
Hosko said the bureau is going to use the full range of investigative techniques available in pursuing its cases. Specifically, he noted that defendants’ own words are often the best evidence against them.
The FBI convenes a board every six months, Hosko said, to look at undercover operations from a liablity, operational and legal perspective to be sure cases are pointing in the right direction.
The collapsed Foreign Corrupt Practices Act case last year involved 22 defendants in the defense supply industry that were snared in an undercover operation in which FBI agents posed as representatives of the defense minister of the west African nation of Gabon. The Justice Department dropped all charges last year following mistrials and acquittals in federal court in Washington, D.C.
Richard Bistrong, a government cooperator, who was himself sentenced to prison for violations of the FCPA, wore a wire and worked with FBI agents to build a foreign bribery case against colleagues in the industry.
After withdrawing the charges, the government reevaluated the case and decided not to spend tax dollars to seek a favorable outcome that seemed unlikely, Hosko said.
At any given time, Hosko said the FBI is working several dozen FCPA cases across the country, in close cooperation with U.S. Attorney’s offices and the Justice Department’s criminal Fraud Section.
In addition to the Washington Field Office, Hosko said the bureau has agents working FCPA cases in epicenters such as New York, Los Angeles, San Francisco and Houston.
Because the government has limited resources, Hosko said the FBI won’t pursue cases without strong evidence. Those cases require layers of approval before they can be initiated.
“If the FBI comes knocking on your door, whether you’re a private citizen or in corporate America, or in the public sphere, you should assume there is a reason why we’re there,” Hosko told the audience of professionals at the Dow Jones Global Compliance Symposium.
In addition to federal prosecutors, Hosko said the FBI also works closely with the Securities and Exchange Commission and the Commodity Futures Trading Commission.
Though the SEC has recently opened a whistleblower office, which pays bounties to whistleblowers who give the government information that leads to enforcement actions, Hosko said the FBI hasn’t seen a “tsunami” of whistleblower information coming in.
“It’s a piece of the puzzle,” said Hosko, emphasizing that the FBI uses a variety of methods to build cases.
One of an FBI agent’s major tasks is to peel back layers of information to find the truth, Hosko said. Often individuals involved in cases tell lies, which the agents work to expose until the facts are revealed.
Hosko said the U.S. Sentencing Guidelines offer an incentive to be truthful with government investigators. Cooperators may be sentenced more leniently than those who stonewall or lie to protect themselves.
“Early engagement is always the preferred course,” Hosko told the compliance professionals. “Early and truthful and candid engagement.”