Acting Assistant Attorney General Matthew R. Galeotti Delivers Remarks at the Global Investigations Review Annual Meeting

Remarks as Prepared for Delivery

Thank you, Winston and Patrick, for that kind introduction. Just a few months ago, the Criminal Division laid out an ambitious roadmap for white-collar enforcement to make our nation safe and prosperous, vindicate victims' rights, and provide fairness and transparency to individuals and corporations.

At the outset, let me underscore the following: white-collar enforcement remains a priority for the Criminal Division. Fraud in U.S. markets and government programs harms hardworking Americans and the public fisc. Illicit financial networks enable transnational criminal organizations, cartels, terrorists, and rogue nation states by allowing them to funnel narcotics and human smuggling proceeds and evade sanctions and tariffs.

Today, I want to speak about where our efforts stand, highlighting specific examples, and tell you where we are going.

My message is simple: A few months ago, I said we would focus on the work of holding white-collar criminals accountable, and we are doing just that. We are identifying, investigating, and prosecuting fraud and corruption, and we are doing so in an effective, focused, fair, and efficient manner. Most importantly, we are focused on protecting the interests of the American people.

As I look back on the past few months, and look to the rest of the year, let me focus on a few key priority areas for the Division: health care fraud, procurement fraud, market integrity, including crimes associated with Chinese variable interest entities, and foreign corruption.

First, health care fraud.

It has been a record-breaking year for health care fraud enforcement. Health care fraud costs American taxpayers billions of dollars a year. It also harms patients, subjecting them to medically unnecessary or contraindicated treatments - all so that criminals can line their pockets.

The Criminal Division's Health Care Fraud Unit continues to lead the Department's efforts to disrupt and prosecute the most complex and large-scale health care fraud schemes across the country, holding both individuals and corporations accountable in record numbers.

In June, we announced the largest health care fraud takedown in U.S. history. Around the country, we secured charges against over 300 individuals, including nearly 100 medical professionals. Together, these schemes involved the submission of $14.6 billion in fraudulent claims targeting Medicare, Medicaid, and other essential programs.

As part of the takedown, we announced Operation Gold Rush, where we charged 29 defendants for their alleged role in transnational criminal organizations that submitted over $12 billion in fraudulent claims to U.S. health insurance programs. This operation showcased our team's innovative and effective approach to preventing health care fraud. The Health Care Fraud Unit's Data Analytics Team and its partners detected anomalous billing through proactive data analytics, and HHS-OIG and CMS successfully prevented the organizations from receiving all but a small fraction of the approximately $4.45 billion that was scheduled to be paid out by Medicare.

We continue to charge and get significant sentences for health care professionals that abuse the trust of vulnerable victims and have secured significant forfeiture in those cases.

Significantly, as part of our efforts to root out health care fraud, you will also see an emerging focus on corporate enforcement in this space.

Last month, we announced two corporate health care fraud resolutions: a deferred prosecution agreement with Kimberly-Clark Corporation in which it agreed to pay up to $40 million to resolve a criminal charge related to the sale of adulterated surgical gowns, and a non-prosecution agreement with Troy Health, Inc., a provider of Medicare Advantage plans that admitted to fraudulently enrolling Medicare beneficiaries and identify theft. These are the first two corporate resolutions by our Health Care Fraud Unit in nearly a decade.

We continue to investigate corporations involved in similar misconduct and expect to see even more health care fraud-related corporate resolutions in the coming months.

Another high-impact area for the Criminal Division has been fraud that victimizes U.S. investors and undermines U.S. financial markets. Earlier this year, we said that we would pursue cases against those who sought to harm American consumers and investors, and we are doing just that.

In particular, we are actively investigating cases connected to foreign companies listed on U.S. exchanges, specifically variable interest entities (or VIEs) - typically Chinese-affiliated companies listed on U.S. exchanges that present significant risks to U.S. retail investors, whom they target using social media and messaging applications.

Last week, we charged the co-CEO of a Chinese issuer traded on NASDAQ (under the ticker OST), along with a financial advisor, who orchestrated a brazen "ramp and dump" fraud scheme involving non-bona fide securities transactions that placed nearly $80 million of freely tradable OST shares into the hands of co-conspirators for pennies on the dollar. The very same day, as one of the sham securities offerings, a synchronized social media campaign intended to pump OST's share price was launched. This campaign utilized the stolen identities of many U.S. investment advisors to target retail investors. This coordinated effort allowed the co-conspirators to sell more than $100 million worth of OST shares, victimizing unwitting investors. Many of those victim-investors were ordinary American retail investors, and they suffered significant losses when the stock price collapsed, losing more than 94% of its value in one day.

In addition to bringing these criminal charges against these two individuals, we seized millions in assets from relevant brokerage accounts used by co-conspirators, demonstrating swift action by the Department to prevent American victim funds from being expatriated.

Last week's criminal charges send a clear message that the Criminal Division is committed to disrupting the rampant exploitation of American retail investors by foreign actors. Make no mistake, this is just the beginning of our aggressive enforcement in this space. We look forward to working in parallel with the SEC's recently announced Cross-Border Task Force to combat these bad actors looking to con Americans out of their hard-earned dollars.

Our prosecutors' dedication to holding accountable those responsible for waste, fraud, and abuse that harms the American taxpayer is evident in a recent action we announced in June. We secured the guilty pleas of four defendants, including a government contracting officer for USAID and three executives, for their roles in a decade-long bribery scheme involving at least 14 prime contracts worth over $550 million in U.S. taxpayer dollars. In addition, the two companies that employed those individuals - Apprio and Vistant - admitted criminal liability and entered into three-year deferred prosecution agreements.

Similarly, we see combatting trade and customs fraud as essential to protecting our country's interests. The Criminal Division is leading the Department's efforts to investigate and prosecute trade fraud cases-with a particular focus on (1) cases involving long-running efforts to evade hundreds of millions in tariffs, including tariffs on Chinese products, and (2) trade fraud schemes carried out by or with the knowledge of corporate executives. Here too I expect public enforcement actions later this year.

Following the President's Executive Order in February, the Deputy Attorney General issued FCPA enforcement guidelines in June, which set forth non-exhaustive priority areas for the Department's prosecutors. As the DAG announced, he led a process reviewing all such matters, and the Division will firmly - but fairly - prosecute foreign bribery cases consistent with the Guidelines.

For example, last month, we charged two Mexican businessmen who resided in Texas with FCPA violations relating to conduct involving PEMEX, the Mexican state-owned oil company.

Last month we also resolved our investigation into Liberty Mutual, the U.S.-based insurance company, for violations of the FCPA relating to conduct by personnel of its subsidiary in India. In that resolution, in light of the Company's voluntary self-disclosure, we concluded our investigation under Part I of the Corporate Enforcement Policy (CEP) in under 18 months. The resolution required Liberty Mutual to disgorge $4.7 million in profits.

Earlier this week, we secured the conviction at trial of a U.S. businessman for his role in a nearly five-year scheme to bribe Honduran government officials in order to secure business for a Georgia-based manufacturer of law enforcement uniforms and to launder money.

And I expect there will be more activity this year - both with respect to individual and corporate enforcement.

The hallmarks of our enforcement approach are pragmatism, even-handed justice, and putting the right incentive structures in place. This approach is reflected in our revisions to the CEP.

Our revisions to the CEP set forth: (1) a clear path towards resolving corporate investigations without ongoing obligations, (2) the available fine reductions for cooperation and remediation, and (3) the factors that determine the form of a final corporate resolution. Put simply, the CEP crystallizes the benefits to companies that voluntarily self-report, cooperate, and remediate - they will receive a declination, not just a "presumption."

While we have maintained some discretion in cases where there are aggravating circumstances, this is not a game of "gotcha."

Some companies have already seen the CEP's benefits in action. These efficient resolutions have equally benefitted the American people by taking the profit out of crime and remediating harm caused by bad actors.

In addition to the Liberty Mutual case I mentioned, we expect in the coming weeks, and even in the coming days, several resolutions under Part I of the revised CEP.

Let's be clear about these Part I resolutions. They are resolutions in which the Division follows through on its promise that, where a company voluntarily self-discloses, fully cooperates with our investigation, and timely and appropriately remediates, we will not bring charges against the company if it disgorges any illicit profits and makes any victim compensation payments. We are focused on incentivizing and rewarding good corporate citizenship and holding others accountable.

The message you can take from these actions is clear: timely, voluntary self-disclosure, cooperation, and taking responsibility for misconduct can help you avoid prolonged investigations and secure the benefits the Criminal Division offers to promote good corporate citizenship.

The Criminal Division is positioned to have an exceptional year in white-collar enforcement. To date, the Fraud Section has charged over 200 individuals with over $16 billion in alleged loss, convicted over 140 individuals, conducted 17 trials, and resolved 6 corporate cases. Notably, the average fraud loss per individual charged in the Criminal Division's Fraud Section is over $70 million, which is an all-time high, demonstrating the Section's continued focus on prosecuting the worst offenders.

Let me close by looking ahead to the future. The Criminal Division will continue to focus on vigorous, efficient, and fair white-collar enforcement across our priority areas - health care fraud, market integrity, procurement fraud, and corruption, among others.

I will close by emphasizing that our dedication to holding wrongdoers accountable remains as firm as ever. The fight against fraud, corruption, and corporate misconduct is essential to maintaining the integrity of our financial system and protecting the American public.

This year has been a strong one so far, filled with significant milestones, with more to come in the months ahead. The Criminal Division's prosecutors remain focused on the work of protecting the American people and upholding the rule of law.

Thank you.

*These remarks were delivered on Thursday, Sept. 18.