Avoiding the DOJ's red flags of collusion

The U.S. Department of Justice appears to have collusion in its crosshairs with its formation of a procurement and collusion strike force. Here are typical schemes and red flags in the context of new DOJ guidance.

Last November, the U.S. Department of Justice (DOJ) announced the formation of a new Procurement Collusion Strike Force (PCSF). The PCSF will focus on “deterring, detecting, investigating and prosecuting antitrust crimes, such as bid-rigging conspiracies and related fraudulent schemes, which undermine competition in government procurement, grant and program funding.” Government procurement officials and members of the public can review information on the PCSF’s website about the federal antitrust laws and training programs, and report suspected criminal activity affecting public procurement.

The scope of this strike force is limited to companies doing business with the U.S. government. However, all organizations can learn from the schemes and red flags described in the DOJ guidance. “Across various industries, companies are appropriately focused on this new enforcement initiative,” says Andrew Levine, a white collar, regulatory defense and internal investigations partner with Debevoise & Plimpton, LLP. “Consistent with best practices, companies should conduct periodic compliance risk assessments to determine their relevant exposures to fraud, abuse and collusion, and implement risk-based controls to mitigate such risks, including appropriate policies and procedures, training for relevant employees, and periodic auditing and testing,” Levine says.

Most CFEs are already knowledgeable of the various forms of collusion, but it’s helpful for all organizations around the world to evaluate their anti-fraud programs and risk assessments in line with how the DOJ views collusion — just in case DOJ agents ever come knocking at your door.