In a March 12, 2015 American Banker article, Venable partner Jeffrey D. Knowles discussed the high stakes involved in the Justice Department's Operation Choke Point, a federal probe targeting banks handling fraudulent transactions. Following recent pushback from Congress and the financial services industry, observers say the Justice Department is pushing ahead with the program citing two recent settlements.
"The congressional scrutiny clearly slowed down the DOJ investigations — they were distracted. But I think the Justice Department is back to business," said Knowles. "It's an open question whether they're going to launch any new investigations, but clearly they're wrapping up pending investigations that have been in the pipeline for some time."
A key factor going is whether banks will face criminal charges. Until recently, all matters settled under Operation Choke Point have been civil. "Banks file hundreds of thousands of suspicious activity reports every year, and they've done that in partnership with the Department of Justice and the banking agencies as partners in fighting fraud," said Knowles. "And now instead of the banks being viewed as working partners with government in combatting fraud on consumers, the government is actually pointing their gun and making the banks themselves the target of those activities."