OFAC’s Pegasus Settlement: Lessons for Logistics Providers on Screening and Subpoena Responses
On October 9, 2026, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $175,015 settlement with California-based freight forwarder Pegasus Worldwide Logistics (Pegasus) for apparent violations of U.S. counter-narcotics sanctions and OFAC reporting requirements. The enforcement action arose from Pegasus’s involvement in shipping a $5,950 machine supplied by a sanctioned Chinese company that had changed its name following its designation. Despite the relatively modest transaction value, OFAC imposed a substantial penalty, citing deficiencies in Pegasus’s sanctions screening, failure to investigate red flags, and incomplete response to an administrative subpoena.
OFAC found that Pegasus failed to conduct sanctions screening at the outset of the transaction and subsequently screened only the supplier’s new name, overlooking email and telephone information that would have identified the company as a sanctioned party. Pegasus also continued processing payments after receiving a U.S. Customs and Border Protection detention notice referencing OFAC. Compounding these failures, Pegasus initially certified that it had no documents responsive to an OFAC subpoena, only to produce responsive records months later. OFAC treated the incomplete response as a separate basis for liability and an aggravating factor in calculating the settlement.
The action underscores OFAC’s heightened compliance expectations for logistics companies and other intermediaries, regardless of their size or the value of the underlying transaction. It also highlights the importance of screening all available identifying information before engaging in transactions, promptly escalating sanctions-related red flags, and ensuring complete and accurate responses to government inquiries. OFAC further emphasized the availability of financial incentives for sanctions whistleblowers, reinforcing the importance of effective internal reporting and escalation procedures. Click here for the full post.
DOJ’s National Fraud Enforcement Division Issues First Corporate Enforcement Priorities
On October 1, 2026, Assistant Attorney General Colin M. McDonald issued Directive 26-12, “Corporate Enforcement in the Fight Against Fraud,” setting out the recently established National Fraud Enforcement Division’s corporate enforcement strategy. The Directive calls for an “aggressive, all-tools approach” to corporate fraud and identifies four priority areas: health care; fraud affecting public trust or the financial integrity of Americans and markets; significant tax and revenue evasion; and tariff evasion, import fraud, and forced labor.
The Directive also provides an early look at how the Fraud Division will decide which corporate cases warrant particular attention. Prosecutors are instructed to place “great weight” on ten factors, including management involvement, concealment from government agencies or auditors, misconduct lasting three years or more, conduct spanning at least three federal districts, and conduct causing harm to at least 25 victims or losses of at least $25 million. The Directive also formalizes the involvement of the Division’s Corporate Enforcement Section throughout corporate investigations and resolutions.
At the same time, the Directive preserves DOJ’s broader corporate enforcement framework, including the Department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy. It also directs Fraud Division leadership to develop additional incentives for whistleblowers—including participants in misconduct—to come forward with credible information. For companies operating in the Division’s priority areas, the Directive provides important new guidance for assessing enforcement risk, conducting internal investigations, and evaluating potential voluntary disclosures. Click here to read the full post.
The Race to Report: DOJ’s Antitrust Division Highlights Leniency, Whistleblowers, and Trial Readiness
On September 22, 2026, Daniel Glad, Acting Deputy Assistant Attorney General for Criminal Enforcement in DOJ’s Antitrust Division, delivered remarks at a conference hosted by the Women’s White Collar Defense Association (“WWCDA”), a non-profit organization co-founded by Sidley Senior Counsel Karen Popp. His remarks, among other things, highlighted the interaction between the Division’s Leniency Policy and its newer Whistleblower Rewards Program, as well as the Division’s recent criminal trial record.
Glad emphasized that companies confronting potential criminal antitrust conduct may now face two races: one against other participants seeking leniency and another against potential whistleblowers with independent incentives to report. Because only one participant can obtain leniency, Glad cautioned that companies need not complete an internal investigation before considering whether to seek a marker.
Glad also pointed to the Division’s four consecutive criminal jury trial convictions as evidence of its readiness to litigate cases and its focus on presenting them efficiently. Taken together, his remarks underscore the importance of quickly assessing potential antitrust misconduct, evaluating reporting options early, and preparing for a Division that remains willing to take criminal cases to trial. Click here to read the full post.
DOJ Loosens the Whistleblower Program’s Bar on “Other Program” Claimants in Latest Revision
On July 30, 2026, the U.S. Department of Justice (DOJ) revised its Corporate Whistleblower Awards Pilot Program, expanding the pool of individuals who may qualify for an award. Most notably, DOJ eliminated the prior rule that automatically disqualified whistleblowers who could have been eligible for an award under another U.S. government whistleblower program, such as those administered by the SEC or CFTC. Instead, a whistleblower is now disqualified only if he or she actually receives an award from another program for reporting the same or substantially the same misconduct, while DOJ retains discretion to reduce or deny duplicative awards.
The revised guidance also includes several administrative updates, including confirmation that the program is now administered by the Criminal Division’s Money Laundering, Narcotics, and Forfeiture Section (formerly the Money Laundering and Asset Recovery Section) and that submissions will be made through a dedicated online intake portal. The covered subject-matter areas remain unchanged from the May 2025 expansion and continue to include, among other areas, financial institution crimes, bribery, healthcare fraud, trade and customs fraud, procurement fraud, immigration offenses, and sanctions-related misconduct.
For companies, the revisions further strengthen incentives for whistleblowers to report directly to DOJ, including in matters that may also be eligible for other agency whistleblower programs. At the same time, DOJ’s Corporate Enforcement and Voluntary Self-Disclosure Policy continues to provide a pathway to a declination for companies that promptly self-disclose, cooperate, and remediate misconduct, reinforcing the importance of effective internal reporting mechanisms and careful consideration of self-disclosure decisions in the face of potential whistleblower reports. Click here to read the full post.
Tariff Enforcement at the Forefront: Importer Agrees to Pay $549.5 million in Largest-Ever Trade-Related False Claims Act Settlement
On May 12, 2026, the Department of Justice (“DOJ”) announced a $549.5 million settlement with Perfectus Aluminum Acquisitions LLC and four affiliated companies to resolve allegations that they violated the False Claims Act (“FCA”) by evading customs duties. This settlement is the largest trade-related settlement under the FCA.
The action was initiated by qui tam cases brought by individuals who worked for U.S.-based competitors and the Aluminum Extrusion Counsel and ultimately coordinated through the DOJ’s Trade Fraud Task Force, which involved cooperation between DOJ and the Department of Homeland Security. This case highlights the increasing use of the FCA to hold importers liable for the underpayment of customs duties, the Administration’s commitment to enforcing U.S. customs laws, and the potential for competitors and former employees to harness the FCA to motivate federal investigations into allegations of trade fraud.
This post examines the settlement and discusses its implications for importers, manufacturers, and other companies facing customs and trade enforcement risk.
Three Potential Benefits, One Powerful Incentive: NDIL’s New Individual Self-Disclosure Program
On May 14, 2026, the U.S. Attorney’s Office for the Northern District of Illinois (NDIL) announced a new Individual Self-Disclosure Program offering qualifying individuals three potential forms of relief in exchange for voluntary self-disclosure and cooperation: letter immunity, a deferred or non-prosecution agreement, or criminal prosecution with substantial sentencing relief. The Program’s express three-tier structure distinguishes it from many other federal self-disclosure programs, which generally focus on the possibility of a non-prosecution or deferred prosecution agreement. To qualify, individuals must provide a complete and truthful proffer, cooperate fully with law enforcement, testify if required, and disgorge any criminal proceeds, among other requirements. This post summarizes the Program’s key features and highlights how it compares to similar self-disclosure initiatives adopted in other jurisdictions.
“Don’t Wait”: DOJ Criminal Division Chief Signals Faster Disclosure Expectations and Uptick in Corporate Enforcement
On May 7, 2026, Assistant Attorney General A. Tysen Duva used his first major speech to the compliance community since DOJ’s March 2026 rollout of its department-wide Corporate Enforcement Policy (CEP) to deliver a clear message: corporate enforcement activity is expected to increase, companies should self-disclose misconduct early—even before completing internal investigations—and robust compliance programs remain central to DOJ’s expectations.
DOJ’s FOCUS Initiative: An Invitation or a Warning to Data Miner Relators?
On April 30, 2026, the Department of Justice’s Civil Division announced the Fraud Oversight through Careful Use of Statistics, or FOCUS, initiative. The initiative is aimed at a fast-growing category of False Claims Act relators that exploded in the aftermath of the pandemic and the Paycheck Protection Program: “data miners” who analyze publicly available government data to identify potential fraud and then file qui tam complaints. DOJ’s message to these non-traditional relators is twofold. First, the Department seems to have accepted that data-miner relators are here to stay, and so has invited sophisticated, well-supported data analysis that can help identify fraud that might otherwise go undetected. But second, DOJ intends to prioritize data-miner relators who can demonstrate meaningful pre-filing diligence, analytical rigor, familiarity with the governing program rules, and legally sufficient allegations.
For companies in sectors with substantial government funding or reimbursement, including healthcare, life sciences, defense, education, technology, and other government contractors, the practical takeaway is straightforward. Companies should evaluate their own publicly available data with the same skepticism and sophistication that a relator, short seller, or agency analyst might apply. Leveraging enhanced analytics and AI to match and front-run potential data miner-driven qui tams will allow companies to quickly assess the likely source of government interest, and explain it.
