Since Sept. 11, 2001, federal prosecutors in North Texas put white-collar corporate criminal investigations on the backburner.
That is about to change.
Northern District of Texas U.S. Attorney Erin Nealy Cox said Friday that she and her office are getting more aggressive in identifying, pursuing and prosecuting illegal activity – especially financial fraud – by businesses and corporate leaders in Texas.
In a program Friday at the University of Texas School of Law’s Fifth Annual Government Enforcement Conference, Nealy Cox said that white-collar criminal activity, including prosecutions under the Foreign Corrupt Practices Act and the False Claims Act, is a priority for her office.
“We just got more resources toward FCPA and financial institution crimes that we have not been focusing on for the past few years,” said Nealy, who has been on the job for 10 months.
Legal experts say that federal prosecutors in North Texas have shied away from corporate financial fraud cases – healthcare fraud is the one exception – for nearly two decades and instead have focused on drug and gun-related crimes.
“Talk is cheap and nothing speaks louder than actually bringing cases.” Erin Nealy Cox
In an exclusive interview with The Texas Lawbook, Nealy Cox said the white-collar unit has 15 lawyers and that there are many new cases in the pipeline.
“I assure you that you are going to see more activity coming from that section,” she said. “Talk is cheap and nothing speaks louder than actually bringing cases.”
Nealy Cox said that her office is now employing much more data mining as a means of generating investigative leads, including financial fraud and opioid use.
Legal experts at the UT Law conference said the appointment of Nealy Cox as U.S. Attorney combined with the leadership of former federal white-collar prosecutor Shamoil Shipchandler as regional director of the U.S. Securities and Exchange Commission are strong signals that federal regulators are finally getting serious about aggressively pursuing financial fraud in North Texas.
Nealy Cox and Shipchandler have committed to pursuing cybersecurity crimes as a priority for their agencies. In fact, Nealy Cox started focusing her legal expertise on cyber breaches in 2008 at a time “when no one was discussing cybersecurity.”
In a Q&A session with Locke Lord partner Paul Coggins, Nealy Cox said that U.S. Department of Justice leaders in Washington, D.C. certainly have priorities they want U.S. Attorneys to pursue, but she said Attorney General John Ashcroft and Deputy Attorney General Rob Rosenstein give U.S. Attorneys freedom to determine their own agendas.
“The Northern District of Texas is 96,000 square miles. The problems that we have in Dallas are not the problems we have in Amarillo,” she said. “We have to look where does it make sense for us to bring our federal law enforcement efforts to bear.”
“D.C. is very focused on immigration and I thank God every day that we are not a border district,” she said.
Nealy Cox said that the DOJ allowed the Northern District to compete with other offices for 500 new federal prosecutor positions.
“This attorney general gave us to the most new spots of any district except the Southern District of New York,” she said. “I just hired my 14th new AUSA. We opened one spot and we have 327 applications for it.”
Coggins, who is a former U.S. Attorney, ended the Q&A with one question:
“Do you watch [Showtime TV series] Billions and is it close to reality?”
“Yes, I watch it,” Nealy Cox answered, “and no, not at all.”