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Michael Gilbert

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Michael Gilbert is a partner in the Governmental Practice in the firm's New York office.

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A federal district court in the Middle District of Florida issued a decision on Sept. 30th that threatens the federal government’s continued reliance on the False Claims Act (“FCA”) as the most powerful weapon in the Department of Justice’s enforcement arsenal. U.S. District Judge Kathryn Kimball Mizelle threw out a case against a group of Medicare Advantage organizations and providers on the grounds that an individual whistleblower suing on behalf of the federal government under the FCA, often called a “relator” in a “qui tam” lawsuit, violates the U.S. Constitution’s “appointments clause.” The Court concluded that relators, who are acting on behalf of the federal government, must be considered officers of the government and appointed in a manner consistent with Constitutional requirements. See U.S. ex rel Zafirov v. Florida Medical Associates, LLC, No. 8:19-cv-1236, 2024 U.S. Dist. LEXIS 176626, ECF No. 346 (M.D. Fl. Sept. 30, 2024).Continue Reading FCA Whistleblowers – No More?

More than two years after announcing the first round of settlements in the ongoing “off-channel communications” probe, the SEC recently announced another round of settlements with 26 financial firms, totaling $390 million in fines. These most recent settlements are notable for two reasons: (1) they include the SEC’s second settlement with an entity operating solely as a registered investment adviser (“RIA”) with no associated broker-dealer, and (2) the SEC has again explicitly noted that companies that self-reported obtained lower fines.Continue Reading Latest Round of SEC “Off-Channel” Communications Settlements Highlights Risks for Investment Advisers and Benefits of Self-Reporting

In December 2023, President Biden signed the new Foreign Extortion Prevention Act (FEPA), closing a gap in the Foreign Corrupt Practices Act (FCPA) by criminalizing the “demand side” of foreign bribery. While the FCPA prohibits offering or paying bribes to foreign government officials, the FEPA made it illegal for foreign officials to solicit or accept bribes from U.S. entities or individuals. Less than a year after its enactment, Congress has quietly passed significant amendments to the new law, with the stated goal of removing “inconsistencies between the language of the FCPA and the FEPA [b]ecause these statutes are intended to be complementary, with parts of them addressing the same problem.” See 170 Cong. Rec. H4656-02, H4657.Continue Reading Congress’s Recent “Technical” Amendments to the Foreign Extortion Prevention Act Change Key Aspects of the New Law

Over the last several years, the Securities and Exchange Commission (“SEC”) has been laser-focused on the use of so-called “off-channel communications” in the financial services industry. On the theory that employees’ use of personal devices and platforms (such as WhatsApp) to communicate about business violates the “books and records” requirements applicable to financial institutions, the regulator has conducted intrusive and extensive investigations. To respond to the SEC, many companies have required employees to have their personal cell phones copied and reviewed. Continue Reading What Private Equity Firms Need to Know About the Ongoing SEC Investigation of “Off-Channel” Communications

Just one day after Deputy Attorney General Lisa Monaco announced the U.S. Department of Justice’s (“DOJ’s” or “Department’s”) whistleblower pilot program on March 8, 2024, the DOJ’s Criminal Division highlighted its plans to apply the program in its fight against global corruption. Specifically, the Criminal Division described its plan to apply the new whistleblower initiatives to Foreign Corrupt Practices Act (“FCPA”) cases as part of its overarching priority of targeting the “most complex financial crimes and having the greatest possible impact on corporate conduct.”[1]Continue Reading DOJ Plans to Apply the New Whistleblower Rewards Pilot Program to FCPA Cases

The United States Department of the Treasury has announced that it is working to address what it perceives as money laundering risks associated with investment advisers. Specifically, the agency asserts that absent consistent and comprehensive anti-money laundering (“AML”) and countering the financing of terrorism (“CFT”) obligations, corrupt officials and other illicit actors may invest ill-gotten gains in the U.S. financial system through hedge funds and private equity firms. Treasury indicated its intention to issue a proposal in the first quarter of 2024 that would apply Bank Secrecy Act (“BSA”) AML/CFT requirements, including suspicious activity report obligations, to certain investment advisers. Continue Reading Treasury Announces Renewed Push for Investment Adviser AML Rules in Q1 2024

On December 13, 2023, CoinList Markets LLC (“CoinList”) agreed to pay $1,207,830 pursuant to a settlement agreement with the Office of Foreign Assets Controls (“OFAC”) in connection with allegations that the San Francisco based virtual currency exchange violated OFAC’s Russia/Ukraine sanctions by allowing users in Crimea, an embargoed country, to open accounts on its platform.Continue Reading Sanctions Enforcement in the Cryptocurrency Industry Continues to be a Focus

On December 14, 2023, with bipartisan support, Congress passed the Foreign Extortion Prevention Act (“FEPA”), making it a federal crime for any foreign government official to demand, receive, or agree to receive a bribe from a U.S. company or individual, or any person while in United States territory in exchange or in connection with obtaining or retaining business. The legislation is part of the National Defense Authorization Act, and is anticipated to be signed into law by President Biden. Considered by the law’s authors to be one of “the most sweeping and consequential foreign bribery laws in nearly half a century,” FEPA has “the potential to help root out foreign corruption at its source.”[1]Continue Reading Corrupt Foreign Leaders Now on the Hook for Bribery Charges: Congress Passes the Foreign Extortion Prevention Act

Written by Paul Desmond in the key of E-flat minor and performed by the Dave Brubeck Quartet using a funky quintuple (5/4) time, “Take Five” is and was the biggest selling jazz single of all time. But it is also slang for exercising one’s Fifth Amendment privilege against self-incrimination. Because many civil lawyers ask when and how to invoke the privilege, we thought we would take a stab at answering some of the not-so-obvious questions that often arise.Continue Reading “Take Five” – A Guide to Invoking the Fifth Amendment in Civil Cases

The U.S. authorities are increasingly taking actions against big-name crypto mixers for potential violations of sanctions regulations. On November 29, 2023, the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) sanctioned Sinbad.io (“Sinbad”), which is a virtual currency mixer. As a result, U.S. persons are generally prohibited from dealings involving Sinbad or its property interests. Virtual currency mixers are anonymized software tools that allow users to conceal the source or owner of digital assets.Continue Reading OFAC Sanctions Crypto Mixer Following Allegations of Laundering Funds to North Korea

Last week, the Department of Justice (“DOJ”) announced it declined to prosecute Lifecore, a U.S. biomedical company, after Lifecore voluntarily disclosed that a company it acquired paid bribes to Mexican officials and falsified documents both before and after Lifecore’s acquisition.[1] Continue Reading Voluntary Self-Disclosure of FCPA Violations Following Acquisition Avoids Corruption Charges