Manhattan D.A. Signals “Upstream” Enforcement Push with New Corporate Crime Task Force

The New York County District Attorney’s Office (“Manhattan D.A.”) recently announced a new Corporate Crime and Antitrust Task Force (the “Task Force”) to pursue “complex investigations targeting fraud and misconduct by corporations and corporate executives, including antitrust violations, health care and other consumer fraud.” The Task Force will seek to “hold organizations fully accountable” for corporate crime, deter misconduct across industries, and drive broader structural change.

The Task Force will pursue systemic accountability, with a particular focus on entities, senior leadership, and the organizational structures that facilitate or benefit from unlawful conduct. The Manhattan D.A. emphasized that corporate actors can cause harm equal to or greater than that caused by individuals and that investigations therefore should not necessarily end with an individual employer. Instead, the Task Force will “doggedly pursue” senior decision-makers, companies, and other entities involved in or benefiting from unlawful conduct. The Task Force will be led by Matthew Bogdanos, a veteran prosecutor with roughly four decades at the Manhattan D.A. and experience handling both violent crime and complex white-collar matters, and will include approximately five Assistant District Attorneys and two investigative analysts with experience on both the prosecution and defense sides of financial services fraud, securities fraud, and antitrust matters. 

The Task Force will tap the Manhattan D.A.’s career investigators, forensic accountants, and Financial Intelligence Unit, which analyzes FinCEN data and could allow Bank Secrecy Act and suspicious activity reporting to inform investigative leads.

The Task Force reflects an expansion of the Manhattan D.A.’s existing “upstream” enforcement philosophy, which seeks to move beyond individual offenders and trace criminal activity to the businesses, systems, and intermediaries that “enable and profit from crime.” The Manhattan D.A. cited similar prior initiatives based on this philosophy, including involving ghost guns, which led to New York safety standards for 3D printers and outreach to manufacturers and technology platforms; cryptocurrency prosecutions and the proposed CRYPTO Act targeting unlicensed virtual currency businesses; investigations of large-scale retail “fencing” operations; seizures of website domains used to sell stolen credit card data; and efforts to disrupt online scams targeting immigrant communities, including schemes involving individuals posing as pro bono legal organizations.

Significantly, several of these initiatives involved pressure on companies that were not themselves accused of wrongdoing, including technology platforms and manufacturers, to modify policies or support legislative changes. Companies whose products, platforms, or services can be exploited by third parties to commit wrongdoing should therefore anticipate that the Manhattan D.A. may engage them as part of its broader effort to disrupt criminal activity, even where the companies themselves are not investigative targets.

Key Takeaways

Companies should view the Task Force as a signal of heightened local enforcement activity directed at both companies and senior executives.

• Treat state and local prosecutors as a distinct enforcement risk. Companies with operations, customers, or transactions connected to Manhattan should not assume that federal enforcement priorities define the full extent of their exposure. Shifts in federal enforcement emphasis may create opportunities for state and local prosecutors to pursue matters that receive less attention at the federal level.
• Review compliance in identified priority areas. Companies operating in areas such as antitrust, health care, and consumer-facing businesses should assess whether their compliance programs adequately address relevant risks, including communications with competitors, pricing and bidding practices, as well as billing and marketing controls.
• Assess executive-level accountability. With the Task Force emphasizing senior decision-makers, boards and management should ensure that compliance responsibilities are clearly defined, material red flags are appropriately escalated, and governance materials demonstrate active oversight.
• Test financial controls. Given the Manhattan D.A.’s access to sophisticated forensic accounting and financial intelligence resources, companies should assess whether their financial controls and, where applicable, anti-money-laundering processes are sufficiently robust to withstand prosecutorial scrutiny.
• Consider third-party and potential platform misuse. Companies whose products, platforms, services, or supply chains could be exploited by bad actors should evaluate their safeguards, onboarding, and monitoring practices, and procedures for identifying and responding to potential misuse.
• Evaluate internal reporting and investigation protocols. Effective reporting channels and prompt, credible internal investigations can help companies identify potential misconduct early, remediate problems, and preserve strategic options if government scrutiny follows. Investigations should be independent of the business functions and individuals under review, with outside counsel oversight, where warranted, to strengthen credibility with prosecutors and protect privilege.
• Update government-investigation response plans. Companies should ensure they are prepared to respond quickly to subpoenas, search warrants, and other investigative demands, including by identifying appropriate internal stakeholders and engaging experienced counsel early when contacted by the Manhattan D.A.

Womble Bond Dickinson (US) LLP’s White Collar Defense and Criminal Investigations Team navigates domestic and international clients in all manner of white collar, regulatory, corporate and congressional investigations. Our team includes a distinguished roster of veteran defense attorneys, former federal prosecutors and U.S. Attorneys who served at the highest levels of the Department of Justice and at leading United States Attorneys’ Offices. Our team includes Chambers Ranked (Band 1) lawyers and alumni of the U.S. Department of Justice, the SEC’s Enforcement Division, the U.S. Senate, House of Representatives, and in-house compliance specialists of publicly traded companies.