Publications

Since leaving the Manhattan DA’s Office’s Major Economic Crimes Bureau at the end of 2024, I am frequently asked the following question: “Is the Manhattan DA’s office (“DANY”) going to start indicting white-collar cases that the DOJ is not prioritizing? My answer has been that we will have to wait to see because such cases take time from investigation to indictment. The recent charges brought by DANY against Silver Birch, and multiple individuals, indicate that the D.A.’s office may indeed be filling the gap in enforcement.

On Monday, DANY announced that its Major Economic Crimes Bureau had indicted six individuals and two corporate defendants for what it described as a “sprawling $76M fraud.” The indictment charges a complex scheme of fraud and money laundering involving the creation of a fake company, Silver Birch, and other fake companies which were purported Silver Birch customers. The purpose of the scheme was to make Silver Birch appear to have a steady stream of income to induce commercial lenders to loan it money, which the defendants then stole and laundered.

While most of the attention has understandably been focused on the dollar figure involved—the largest case (in monetary terms) DANY has brought since Alvin Bragg took the helm—the final paragraph of D.A. Bragg’s press release was particularly notable. More particularly, Mr. Bragg thanked “the members of the Serious Frauds Office in the U.K. for their assistance in the course of their parallel investigation” and thanked “the U.S. Department of Justice” for their assistance with the investigation.

The press release indicates that the Department of Justice was aware of the investigation and assisted in it, but chose not to bring charges itself, deferring instead to state enforcement authorities. During prior administrations, federal deferral to state authorities would typically happen only when: (1) the case was a relatively low priority for the U.S. Attorney’s Office; (2) the state investigation was much further along than the federal investigation; or (3) if DOJ could not go forward against a particular defendant (for example, owing to a Presidential pardon).

It is unclear which of these typical explanations applies to the deferral to state authorities. A case of this magnitude, with losses over $75 million, a complex money laundering scheme, with money moving nationally and internationally, and which required the cooperation of law enforcement and prosecutorial authorities in foreign countries, is precisely the sort of white-collar case that, in the past, would have been investigated and prosecuted by federal authorities. The fact that the case was brought by DANY may owe to DANY’s investigation progressing more rapidly. In a case like this, however, that would be unusual, because federal authorities have potent investigative tools that state authorities do not have. Those tools include investigative grand juries with no restriction on hearsay evidence, a severe sentencing scheme that encourages cooperation, superior access to tax records, and superior ability to obtain foreign records using mutual legal assistance treaties. What is more likely is that the case was simply not a high priority for the current Justice Department.

There is another reason the press release was notable. That is, the indication of the Department of Justice’s cooperation with DANY’s investigation of the case. While traditionally, federal-state cooperation was customary, the fact of DOJ’s cooperation with Alvin Bragg’s office is noteworthy. Of course, it was Bragg’s office that brought a criminal prosecution of the now-President that resulted in more than 30 felony convictions (a case that was defended by Acting Attorney General Todd Blanche). The President is notoriously vengeful (think of Leticia James and now, apparently, E. Jean Carroll) and appears to hold particular sway and control over the previously independent Justice Department. The fact that there was cooperation between federal authorities and Bragg’s D.A.’s office in the Silver Birch case is a positive development.

The takeaways from this indictment are that (1) even if DOJ has been de-emphasizing white collar crime, there are highly sophisticated prosecutor’s offices willing and able to take on these complex cases, and (2) the U.S. Attorney’s Offices are, at least in some instances, cooperating with those investigations. It may be time for many white-collar defense attorneys who are used to practicing in federal court to start getting acquainted with the New York Rules of Criminal Procedure, because the next wave of white-collar enforcement may be coming from One Hogan Place.

Daniel Passeser is counsel in Wiggin and Dana’s litigation department and is resident in the firm’s New Haven office. Prior to joining Wiggin and Dana, Daniel served as an Assistant District Attorney in the New York County District Attorney’s Office assigned to the Major Economic Crimes Bureau, the Public Corruption Unit, and the Office of the Special Narcotics Prosecutor.

Reprinted with permission from the July 9, 2026 edition of the “New York Law Journal” © 2026 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or [email protected].