SEC Division of Enforcement Director Gurbir Grewal and several high-ranking officials from the U.S. Attorney’s Offices for the Southern and Eastern Districts of New York and the FBI spoke on November 29, 2022 at a conference sponsored by Sandpiper Partners LLC concerning hot topics in SEC and DOJ enforcement.  The panelists all made clear that the views they expressed were their own, but those views are worth hearing.

In late October, a New York district court refused to dismiss the Department of Justice’s (DOJ) indictment against defendant Nathaniel Chastain, who was charged with wire fraud and money laundering relating to his using insider knowledge to purchase non-fungible tokens (NFTs) prior to them being featured on OpenSea, an online

The Second Circuit recently held that a denial of a motion to dismiss a criminal indictment based on the Foreign Sovereign Immunities Act (“FSIA”) is immediately appealable under the collateral-order doctrine but concluded that even if FSIA did provide immunity from criminal prosecutions, that immunity would not extend to a

ThinkstockPhotos-452970107In an effort to lessen the risk that businesses and individuals performing legitimate financial transactions will have funds frozen through a prosecutor’s use of forfeiture laws, on March 31, Attorney General Eric Holder issued new guidance concerning asset forfeiture in structuring offenses.  The new policy restricts the use by prosecutors of civil or criminal asset forfeiture for structuring until after a defendant has been criminally charged or found to have engaged in additional criminal activity.  A typical structuring offense is where a single currency transaction with a financial institution (generally above $10,000) is broken into a series of transactions by an individual for purposes of avoiding the filing of a currency transaction report by the financial institution.  Structuring at times accompanies charges of other criminal activity such as money laundering, but can also be charged as a standalone offense.

On April 23, 2014, the U.S. Court of Appeals for the Second Circuit reinstated the action brought by the European Community and its 26 member states against RJR Nabisco and related entities (collectively, “RJR”) for allegedly laundering drug money through the exchange of discounted euros and cigarettes. In the long-running case European Community v. RJR Nabisco, Inc., the Second Circuit applied and clarified the presumption against extraterritoriality of United States laws.

The European Community claims that Columbian and Russian criminal organizations smuggled illegal narcotics into Europe. The drugs were allegedly sold, producing revenue in euros, which the criminal organizations “laundered” by using money brokers in Europe to exchange the euros for the domestic currency of the criminal organizations’ home countries.  The money brokers then sold the euros to cigarette importers at a discounted rate, and the cigarette importers then used the euros to purchase RJR’s cigarettes from wholesalers or “cut-outs.” The wholesalers then purchased the cigarettes from RJR and shipped the cigarettes to the importers who purchased them. Finally, the money brokers used the funds derived from the cigarette importers to continue the laundering cycle.