The Wall Street Journal’s front-page headline on April 15 tells it all: “White Collar Enforcement Recedes Under Trump.”
It can’t be any clearer than what the article states: “The Trump Administration is retreating from some types of white-collar enforcement, including cases involving foreign bribery, public corruption, money laundering and crypto markets. In some cases, the administration is effectively redefining what business conduct constitutes a crime.”
And while it’s not the Journal’s purpose to present a solution to this policy — or is it political? — shift, allow me to propose one here: Let “the locals” take over where they can.
Undoubtedly, each time a new administration comes into office, the possibility exists that its Justice Department, and maybe even local U.S. Attorneys’ offices depending on where they are geographically situated, may place greater emphasis on certain types of criminal wrongdoing — be it narcotics, violent crime, health care fraud, corruption, or illegal entry. Investigations over threats to the homeland’s security were at the forefront of the U.S. Justice Department’s prosecution menu in the wake of 9/11, for instance, and illegal entry is always a greater priority for prosecutors near the Southern border.
President Trump’s FBI and Justice Department have emphatically set their focus on “violent” crime.
Both FBI Director Kash Patel and Attorney General Pam Bondi have communicated that they will be focused on “taking down” those who physically “invade” the United States or harm people, rather than those who merely harm the pocketbooks of others. Therefore, their agencies will no longer be in the business of investigating white-collar offenses to the same degree as has occurred during presidential administrations over the last half century.
We need look no further than Trump’s recent pardons of Carlos Watson, convicted of defrauding investors of Ozy Media, or of Trevor Milton, the founder of Nikola Corp., also convicted of securities fraud. Although we cannot know for sure because of the lack of transparency surrounding these pardons, they appear to the seasoned outside observer as though the pardons were unrelated to the merits of the underlying prosecution. So, the prosecution of white-collar crime, including corruption and business fraud, will no longer constitute a priority — and, perhaps in particular, as it appears, if it is directed at supporters of the president or his administration.
That is where state prosecutors can potentially come in.
If, say, as in the case of Mayor Eric Adams of New York, the acts alleged as campaign finance fraud in the federal indictment also constitute grand larceny under state law, should the local DA file similar charges? That depends. Let’s stipulate that the DA shouldn’t — and we believe the Manhattan DA wouldn’t — file the charges out of an effort either to “get” Adams or, more plausibly, to stick it to the president. But if he truly believes in the independent exercise of prosecutorial authority given to him by the voters, that Mayor Adams got away with something when he made his Faustian bargain, it is his prerogative—some might even say, his duty—to seek an indictment by a state grand jury.
And shouldn’t that be the case for local prosecutors around the nation? If a local prosecutor honestly believes that a meritorious federal case against a defendant warranting prosecution has not been brought or has inappropriately resulted in a dismissal by federal prosecutors or a presidential pardon, the local prosecutor who has an applicable statute and venue for a state case relating to the same conduct should seriously consider bringing the case in state court. And if the federal government has stepped aside, it will give the local prosecutor free rein over the investigation, likely without any possibility of interference from “the feds.”
Of course, it must be acknowledged that it is unquestionably easier to prosecute an individual, particularly a white-collar defendant, in federal court rather than in state court. The rules of evidence and procedure are far more lenient for prosecutors in federal court, and the available statutes far more wide-ranging. It is also easier for a federal prosecutor to obtain a lower-level defendant’s cooperation in order to better prosecute the most important defendant(s) in a particular criminal episode.
Remember, too, the administration has no authority and the president no pardon or commutation authority over state prosecutions. If local prosecutors believe that they themselves are able to prosecute some offenders or offenses that the federal government no longer wants to, they should follow the facts and the law where they lead.
Indeed, doing so and stepping into the breach in meritorious cases would be acting in the finest traditions of the Department of Justice itself.
Joel Cohen, a former state and federal prosecutor, practices white collar criminal defense law at Petrillo, Klein & Boxer. He is the author of “Blindfolds Off: Judges on How They Decide” (ABA Publishing, 2014), and an adjunct professor at both Fordham and Cardozo Law Schools.
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