Trump White-Collar Shift Offers Opening for Defense Attorneys

The Trump administration’s overhaul of law enforcement priorities is presenting an opportunity and a source of angst for the white-collar defense bar.

Lawyers are seizing on diminished foreign bribery and crypto enforcement in an attempt to get their clients’ cases dropped or reconsidered.

But those shifts, combined with White House pardons of several US executives, are also creating uncertainty about what shape corporate and financial enforcement will take in the coming years and how access could influence it.

“This administration does not play by the usual rules when it comes to the Justice Department,” Fordham University law professor Cheryl Bader said. “Predicting the future of white collar criminal enforcement may be difficult and will likely turn on factors that are more politically based than career prosecutors are used to.”

It’s too early to know how changes at DOJ and other agencies will impact the pace of corporate investigations, lawyers say. While new DOJ leaders are sending signals that they will devote fewer resources to white-collar enforcement, some noted that the laws remain the same and they’re telling clients as much.

At the same time, defense attorneys are becoming wary about how they present themselves to an administration looking to punish law firms that were involved in so-called “weaponization” against President Donald Trump.

Some Big Law firms have scrubbed references to their lawyers’ roles in the Mueller investigation into Russian interference in the 2016 election. Lauren Drake, a legal recruiter at Macrae, said she also saw some initial “hesitation” from firms around hiring government lawyers who may have worked on a case that could make them a target.

Prior government experience has always been seen as a big sell for corporate clients, but that also may not mean as much when power is consolidated inside the White House.

“It has been important in the past in many circumstances that clients think about hiring a firm with lawyers with good relationships with the Justice Department,” said Paul A. Tuchmann, a Wiggin and Dana partner and former federal prosecutor.

The difference now is that it’s key to “have proximity to the president, not the prosecutors,” he said.

In a statement, a Justice Department spokesperson said, “White collar enforcement focused on securing the integrity of U.S. markets and financial systems, tackling fraud, waste, and abuse, and recouping victims’ losses is our focus.”

‘Always So Inclined’

A push by defense counsel to get the government to review their clients’ case started as soon as Trump returned to the White House, and those efforts appear to have escalated in the months since.

Defendants in ongoing cases are arguing they fall outside narrower enforcement boundaries that DOJ leaders are setting. Individuals are also trying to relate their prosecutions to the president’s prior criminal matters in attempts to get clemency, said Sam Mangel, a white-collar prison consultant.

Early successes are providing even more reason to try their luck.

After Trump in February ordered the DOJ to halt new investigations under a foreign bribery law and issue new guidance limiting “overexpansive” enforcement, attorneys for two former Cognizant Technology Solutions Corp. executives went directly to then-acting Deputy Attorney General Emil Bove in an attempt to quash their case.

By April 2, a former Trump attorney now serving as the acting US attorney in New Jersey filed a motion to drop it. The move came weeks after new DOJ leaders ordered the dismissal of a separate corruption matter against Eric Adams, partly because it was preventing the New York mayor from tackling illegal immigration.

“Defense lawyers have always been so inclined but now even more so to nip investigations in the bud,” Robert Frenchman, a white-collar defense partner at Dynamis LLP, said. “You’re going to see a lot of that.”

Crypto Enforcement

Such attempts are especially apparent in the crypto sector, where companies now have an ally in the White House to their efforts to cement the industry’s US presence.

The Securities and Exchange Commission has closed or paused at least a dozen investigations since Trump’s inauguration, and the DOJ in March issued a memo disbanding its crypto enforcement team and disavowing the Biden administration’s “regulation by prosecution” strategy.

Such a broad swing in US crypto enforcement means “people are trying every avenue” to get an ongoing case dropped or past resolution reconsidered, said Sarah Concannon, a co-chair of Quinn Emanuel’s SEC enforcement defense practice.

“What’s the right way to do this is still an open question,” she said, adding that too many people approaching the new SEC Chair, Paul Atkins, early in his tenure could cause requests with the most merit to get “lost in the shuffle.”

Optimism, Frustration

The shifts are creating optimism for some lawyers while also generating frustration about a department that’s limiting its engagement with the defense bar.

In the week after the DOJ dropped the Cognizant case, prosecutors said they would continue bringing three separate foreign bribery prosecutions, including one against executives at the voting machine company Smartmatic Corp., to trial.

Frank Rubino, a Florida-based attorney for one of the Smartmatic defendants, said the defense team pressed prosecutors for an explanation and were told it was an “internal decision” that wouldn’t be made public.

“We feel they reached inconsistent positions on cases that are extremely similar fact patterns,” Rubino said.

Priority Shifts

Even as some cases move forward, law firms are bracing for a retreat in corporate investigations, as Attorney General Pam Bondi pushes more resources to areas like immigration and drug trafficking and removes career officials across the agency.

A more targeted white-collar enforcement regime focusing on health-care fraud and cases in which American citizens or the government are victims is likely to replace the current one, said Fry Wernick, a Vinson & Elkins partner and former senior Justice Department official.

Beyond that, the president’s use of his power to target foes and help perceived allies is changing the traditional dynamics between the government and defense counsel.

“If you represent companies or individuals that have something to offer that can help advance the administration’s agenda, there’s a broader playbook available for sure,” said Wernick. “It’s kind of a dealmaking environment.”