FTC to Expand Criminal Referral Program to Stop and Deter Corporate Crime

FTC policy statement aimed at holding corporations and their executives accountable for crimes the agency uncovers

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The Federal Trade Commission today voted to expand its criminal referral program as part of its work to stop and deter corporate crime. While the FTC’s authority is limited to civil enforcement, the policy statement adopted at today’s open meeting will enhance the agency’s efforts to combat the criminal misconduct the FTC uncovers in consumer protection and antitrust investigations. The new measures outlined in the policy statement will ensure that cases are promptly referred to local, state, federal and international criminal law enforcement agencies so that corporations and their executives are held accountable for criminal behavior.

“At a time when major corporate lawbreakers can treat civil fines as a cost of doing business, government authorities must ensure that criminal conduct is followed by criminal punishment,” said Chair Lina M. Khan. “Today the FTC is redoubling its commitment and improving its processes to expeditiously refer criminal behavior to criminal authorities, promoting accountability and deterrence.”

Consumer protection misconduct and antitrust violations such as price-fixing, bid-rigging, market allocation deals and other related conduct cause great harm to the American public, leading to significant financial losses and warranting both civil and criminal enforcement efforts. The new policy statement outlines several ways the agency plans to improve its cooperation with its criminal law enforcement partners to stop and deter consumer protection and competition criminal violations, including by:

  • publicly reporting on the FTC’s criminal referral efforts on a regular basis to strengthen public understanding of this important work and highlight criminal prosecutions;
  • developing guidelines to ensure criminal law violations — particularly by major corporations and their executives — are identified by staff and promptly referred to criminal law enforcement agencies; and
  • convening regular meetings with federal, state, and local criminal authorities to facilitate the coordination that will enable the appropriate law enforcement partners to take up cases referred by the FTC and develop best practices to enhance this coordination.

This approach builds on the agency’s ongoing partnerships with criminal authorities to rein in misconduct. Notable consumer protection cases that the FTC worked on with criminal enforcers at the Department of Justice (DOJ) include the money transfer service Western Union. The FTC and the Department of Justice jointly brought civil and criminal charges against Western Union alleging consumer fraud, aiding and abetting wire fraud, and failure to have an effective anti-money laundering program. In 2017, Western Union entered a global settlement that included a $586 million judgment and a permanent injunction. DOJ has also charged a top former Uber executive with obstruction of justice for allegedly hiding a data breach from FTC staff during an FTC investigation into Uber’s data security practices. 

Notable recent cases on the competition side in which the FTC collaborated with federal law enforcement include Reckitt Benckiser Group and Indivior. The FTC charged that the companies used a deceptive scheme to thwart lower-priced generic competition to their branded opioid addiction treatment, Suboxone. The DOJ’s criminal case, involving closely related conduct, ultimately resulted in a $1.4 billion settlement with Reckitt, guilty pleas from two former Indivior executives and an Indivior subsidiary, and a civil settlement with Indivior. In another case, Bristol-Myers Squibb (BMS), DOJ filed criminal charges against BMS and one of its executives, charging them with perjury for making false statements to the FTC in an investigation the agency was conducting.

The Commission voted 4-0 to approve the statement during a virtual open Commission meeting.

Chair Khan as well as Commissioners Rebecca Kelly Slaughter and Christine S. Wilson issued separate statements.

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