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DOJ Expands Use of Data to Find Corporate Wrongdoing

After using data-mining techniques for years to combat healthcare fraud, Justice Department criminal division prosecutors are expanding these tactics to hunt for other types of corporate wrongdoing, the Wall Street Journal reports. The DOJ has kept its data-analytics work largely out of the spotlight, but its recent successes as well as references to the program made by department officials at legal conferences have begun attracting the attention of lawyers and criminal-justice experts. “You’re seeing an increased focus on emerging technology broadly,” said Kenneth Polite, the assistant attorney general overseeing the effort, who is preparing to step down to return to practicing law.


The Justice Department made its latest breakthrough in applying the data tactics to markets-related misconduct earlier this year when it announced insider-trading charges against the former chief executive of telehealth provider Ontrak, Terren Peizer. The Justice Department’s recent use of data analytics is a sea change for how such techniques have traditionally been used in criminal cases. Where data was applied in the past to build a case once it had already been identified, the goal of the department’s more recent efforts has been to find cases where patterns in the data warrant further investigation, according to Polite. “What that data allows us to do is identify those aberrant trends which are indicative of criminal activity,” Polite said. “We can’t look at everyone…but we can use that data to identify where we should be looking.” In recent months, Justice Department officials have hinted that they plan to scrutinize using data analytics in their enforcement of the Foreign Corrupt Practices Act, a 1977 statute that prohibits companies from paying bribes to foreign officials to gain a business advantage.

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