Although uncertainty swirls around many aspects of the Coronavirus (COVID-19) crisis and its impact, in the world of white collar criminal enforcement, some certainties do exist: opportunities for fraud—against vulnerable populations, consumers, shareholders, market participants, and the government, among others—always abound in unstable times. Government watchfulness will be infused with resources and vigor; and the surest way for companies to avoid repeating painful lessons from prior natural and human-caused crises is to remain laser-focused on compliance and the need for increased vigilance on the part of compliance professionals.
With a $2 trillion Coronavirus relief package that includes, among other things, $367 billion in aid for small businesses, $500 billion in loans to larger industries, and $100 billion of funds allocated to hospitals and health systems, likely to be approved by the legislature and signed into law imminently,1 the government will quickly begin pumping money into the U.S. economy and will be keeping a close watch for potential misuse or corruption. As companies experience increased business pressure to adapt and survive in a world of teleworking and social distancing, their employees may also face increased pressure to meet business and client demands, which may tempt some to consider bribery, fraud, or other corruption. And while factors like a cash crunch of unprecedented scale, incredible anxiety over how long conditions affecting business operations will continue to play out, and unpredictability associated with what recovery will look like are all urgent issues at present, companies must resist the urge to push its compliance programs to the back burner. If history teaches anything, it is that uncertain times make good compliance practices more critical than ever.
The historical trend of enforcement actions in prior crises provides an effective signpost of what is to come. Now is the time for businesses, which have in recent years heeded the call of the Department of Justice ("DOJ"), among other law enforcement agencies and regulators, to take seriously the need for robust and not mere paper compliance initiatives with empowered personnel, to remain focused on enhanced compliance, to take preemptive measures to avoid any corporate governances failures, and to remind employees about the long-term consequences of cutting corners for immediate gain.
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Alexander J. Merton