AG Bondi releases memos on cartels and Joint Task Force October 7: Implications for industry

The US Department of Justice (DOJ)’s Attorney General, Pam Bondi, recently released over a dozen memoranda on a variety of policies – ranging from plea agreements and sentencing criteria, to the DOJ’s amplified focus on eliminating cartels and transnational criminal organizations.

Issued on February 5, 2025, the policy directives enumerated in these memoranda direct significant changes to investigative and enforcement authorities and priorities, particularly in regard to foreign individuals and entities that pose a threat to national security in the US and abroad. Businesses are encouraged to stay ahead of these changes given their breadth and reach.

This client alert analyzes two of the memoranda – “Establishment of Joint Task Force October 7” and “Total Elimination of Cartels and Transnational Criminal Organizations” (Memoranda) – and identifies implications for businesses.

1. “Establishment of Joint Task Force October 7” (10-7 Memorandum)

The 10-7 Memorandum established the Joint Task Force October 7 (JTF 10-7), which focuses on holding Hamas accountable and investigating individuals and entities that facilitated Hamas’ actions during its terror attack in Israel on October 7, 2023, as well as on “achiev[ing] justice for victims and fight terrorist-led antisemitism.” Specifically, the priorities of JTF 10-7 are:

• Pursuing criminal charges against the perpetrators of the October 7 Hamas attack on Israel


• Providing services to the victims of the October 7 attack and coordinating the return of hostages


• Seeking arrest and extradition of Hamas leadership charged in a complaint filed in the Southern District of New York in February 2024


• “Investigating and prosecuting acts of terrorism, antisemitic civil rights violations, and other federal crimes committed by Hamas supporters in the United States, including college campuses”


• “Investigating and prosecuting those responsible for funding Hamas,” and


• Supporting the Israeli government, US Department of Defense, and US Department of the Treasury in their efforts “to pursue non-criminal responses to the October 7 attack and other terrorist activities by Hamas.”

JTF 10-7 will be comprised of (1) attorneys and supervisors from the DOJ’s National Security Division (NSD), who have already been involved in the ongoing investigation of the October 7 attack; (2) US Attorneys’ Offices, which will be responsible for prosecutions brought within their districts; (3) agents from the Federal Bureau of Investigation (FBI) with significant experience investigating terrorism matters; (4) the Department of the Treasury; and (5) the Internal Revenue Service. JTF 10-7 will be supervised by the Office of the Deputy Attorney General, which will oversee US engagement with Israeli counterparts and coordination of task force assets.

JTF 10-7 has been given wide latitude to achieve its mandate, including the suspension of Justice Manual guidance requiring prior approval from the DOJ’s Office of International Affairs (OIA) before issuing or enforcing compulsory legal process (eg, subpoenas) directed to persons or entities located in a foreign country.

As part of the DOJ’s Criminal Division, OIA is “the Central Authority of the United States under treaties, multilateral conventions, and executive agreements providing for mutual legal assistance in criminal matters,” and thus serves as a diplomatic intermediary between the DOJ, the US State Department, and foreign nations and their law enforcement agencies.

The 10-7 Memorandum makes clear that the aim of suspending the prior approval requirement is to pave the way for the “JTF 10-7 to issue administrative subpoenas to foreign banks with correspondent accounts in the United States pursuant to 31 U.S.C. § 5318(k).” The suspension thus allows the Secretary of the Treasury or Attorney General to issue, without prior approval from OIA, a subpoena to any foreign bank with a correspondent account in the US and to compel the production of records maintained outside of the US.

Further, the Memorandum also directs the DOJ’s Office of Legislative Affairs (OLA) to advocate for amendments to the extraterritorial venue statutes, 18 U.S.C. § 3238 and 28 U.S.C. § 1355, to “expand options for bringing prosecutions in Districts where investigations occur or particular expertise exists.” Specifically, the OLA will seek an amendment to these statutes that replaces the phrase “in the District of Columbia” with the phrase “any district authorized by law.”

Implications

• The 10-7 Memorandum signals a particular focus by the DOJ on targeting funds overseas that are linked to Hamas. Specifically, suspension of pre-approval authorities for the Section 5318(k) subpoena should put foreign banks on notice that any accounts with links to Hamas and its supporters will likely raise the risk of being subpoenaed as part of a US investigation. This is notable, among other reasons, because:


• Section 5318(k) subpoena authority is broad: it extends subpoena power to any account at any foreign bank with a correspondent account in the US, whether or not there is a nexus between the suspected transaction(s) and the correspondent account, and even if the records are located outside the US.


• In previous litigation in the US, foreign banks have tried, unsuccessfully, to challenge Section 5318(k) subpoenas on jurisdictional and comity grounds. The penalty for noncompliance includes substantial fines and, ultimately, restrictions on access to the US financial system.


• To the extent US or foreign banks with correspondent accounts in the US have conducted business with organizations or individuals with potential ties to Hamas, those banks run the risk of being exposed to investigations and prosecutions by the DOJ and its various components. In particular, prosecutors throughout the country will have the ability to serve subpoenas on foreign banks without preapproval from OIA or NSD, which means that Section 5318(k) subpoenas – which have been used sparingly by the US in the past – could increase in volume and frequency.


• Although the stated focus is on investigating and prosecuting those responsible for funding Hamas, businesses whose supply chains provided materials to Hamas could face exposure pursuant to existing authorities, such as the International Emergency Economic Powers Act (IEEPA), given Hamas has been on the Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) list since 1997.

2. “Total Elimination of Cartels and Transnational Criminal Organizations” (Cartels and TCOs Memorandum)

The Cartels and TCOs Memorandum serves to implement President Donald Trump’s objective of pursuing “total elimination” of cartels and transnational criminal organizations (TCOs) that pose a threat to US sovereignty and public safety. It outlines four main areas of action: (1) charging priorities, (2) removing bureaucratic impediments to aggressive prosecutions, (3) creation of the Joint Task Forces Vulcan and Alpha, and (4) pursuing legislative changes. The policy changes set forth in the Memorandum are effective for 90 days and can be renewed or made permanent if deemed appropriate by the Offices of the Attorney General and Deputy Attorney General.

Charging priorities

The Cartels and TCOs Memorandum:

• Directs more DOJ resources to the prosecution of cartels and TCOs


• Encourages prosecutors to charge serious offenses against leaders and managers of cartels and TCOs, including, where warranted: capital crimes, terrorism charges, racketeering charges, Continuing Criminal Enterprise offenses (21 U.S.C. § 848), violations of the International Emergency Economic Powers Act (IEEPA) (50 U.S.C. § 1705), and machinegun charges under 18 U.S.C. §§ 924(c)(1)(B)(ii) and 924(o)


• Encourages prosecutors to forego criminal prosecution and instead seek removal of low-level investigative targets of cartels and TCOs in the US without immigration status to preserve resources


• Discourages foreign arrests and extraditions of targets who may be eligible for safety valve or minor role adjustments, and


• Directs the Maritime Unit of the Narcotics and Dangerous Drug Section to devote significant resources to investigations that involve inspecting, interdicting, seizing, and forfeiting commercial shipping vessels that transport narcotics, precursor chemicals, petroleum products, and/or human trafficking victims.

Removing bureaucratic impediments to aggressive prosecutions

The Cartels and TCOs Memorandum also removes “bureaucratic impediments” by eliminating approval requirements to give federal prosecutors “full and immediate access” to a broad array of charges.

Specifically, the Cartels and TCOs Memorandum suspends or modifies approval requirements for (1) capital crimes, (2) terrorism and IEEPA charges, (3) violent crimes and racketeering charges, (4) Foreign Corrupt Practices Act (FCPA) charges, and (5) money laundering and asset forfeiture.

These suspensions and/or modifications are to be implemented for a period of 90 days and renewed or made permanent as deemed appropriate by the Attorney General and Deputy Attorney General.

Terrorism and IEEPA

The Cartels and TCOs Memorandum suspends the approval requirements administered by the NSD for the filing of most terrorism and IEEPA charges; seeking search warrants relating to such charges; and applying for material witness warrants in connection with investigations targeting members or associates of any cartel or TCO designated as a Foreign Terrorist Organization (FTO) or Specially Designated Global Terrorist (SDGT).

While approval requirements are suspended, consultation with the NSD is encouraged to facilitate coordination and uniform treatment of any diplomatic sensitivities.

As explained in a recent client alert regarding President Trump’s Executive Order laying out a procedure for designating cartels and other organizations as FTOs and/or SDGTs, the potential breadth of the cartel designations could create compliance challenges with countering the financing of terrorism (CFT), Bank Secrecy Act (BSA), anti-money laundering (AML), and US trade and economic sanctions requirements.

FCPA implications

The Cartels and TCOs Memorandum directs prosecutors to prioritize investigations related to foreign bribery that facilitates the criminal operations of cartels and TCOs, and shift focus away from unrelated investigations and cases.

The Memorandum also suspends the portions of Justice Manual relating to FCPA and Foreign Extortion Prevention Act (FEPA) investigations and prosecutions that require such investigations be conducted by the Fraud Section for matters relating to foreign bribery related to cartels and TCOs.

Under the new policy, US Attorneys’ Offices are only required to give the DOJ’s FCPA Unit within the Fraud Section 24 hours’ notice of their intention to seek charges and provide any existing memos related to the charge upon request.

Money laundering and asset forfeiture

Additionally, according to the Cartels and TCOs Memorandum, the Criminal Division’s Money Laundering Asset Recovery Section (MLARS) must shift focus towards cartels and TCOs, likely meaning less priority will be given in the short term to investigations, prosecutions, and asset forfeiture actions targeting other types of conduct.

The Memorandum also disbands the DOJ’s Kleptocracy Team, Task Force KleptoCapture, and the Kleptocracy Asset Recovery Initiative.

The Kleptocracy Asset Recovery Initiative focused on forfeiting the proceeds of foreign official corruption and (where appropriate) using those recovered assets to benefit the people harmed by these acts of corruption and abuse of office, including laundered funds misappropriated from 1MDB, a Malaysian sovereign wealth fund.

Task Force KleptoCapture, meanwhile, paired NSD, MLARS, Tax Division, and other prosecutors with the FBI, the US Department of Homeland Security, and other law enforcement agencies.

Task Force KleptoCapture focused on, among other things: (1) foreign influence operations targeting the US and enforcing sanctions and export restrictions; (2) combatting efforts to undermine restrictions taken against Russian financial institutions by those who tried to evade AML and know-your-customer measures; (3) targeting the use of cryptocurrency to evade sanctions or US responses to Russian military aggression; and (4) using asset forfeiture to seize assets belonging to sanctioned individuals or identified as the proceeds of unlawful conduct.

The DOJ attorneys working on these initiatives will return to their prior posts and the ample DOJ resources devoted to these initiatives will be redirected to eliminating cartels and TCOs.

Joint Task Forces Vulcan and Alpha

In the Cartels and TCOs Memorandum, Attorney General Bondi also empowered and expanded two existing joint task forces (JTFs), JTF Vulcan and JTF Alpha, to target cartels and TCOs. JTF Vulcan was created in 2019 to dismantle Mara Salvatrucha (MS-13), and JTF Alpha was created in partnership with the Department of Homeland Security to target human smuggling and trafficking groups. Both JTFs will be under direct oversight by the Attorney General and Deputy Attorney General with support from each of the DOJ’s law enforcement components.

Pursuit of legislative changes

The Memorandum further directs certain DOJ components to evaluate and potentially advocate for several legislative reforms. These proposed reforms include, among others, “permanently placing fentanyl-related substances on Schedule I of the Controlled Substances Act,” “broadening 21 U.S.C. § 843 to cover manufacturing and other conduct relating to fentanyl and fentanyl-related substances,” and “requiring serialization of pill-press machines and the machines’ critical parts to facilitate tracking and investigation by law enforcement.”

Takeaways and recommendations

• The Memoranda make clear that DOJ resources previously dedicated to Russia sanctions and other national security priorities will be reassigned to focus on the total elimination of cartels and TCOs and the pursuit of Hamas and individuals or entities that facilitated or funded the October 7 events. Specifically, the robust interagency tools and resources that comprised the now-eliminated Task Force KleptoCapture will be redirected toward cartels and TCOs, and likely Hamas as well. Financial services, global trade and logistics, and other companies with operations, supply chains, or customers in Latin America or the Middle East can expect that the US government will continue to use sweeping sanctions, export controls, and AML regulatory tools in tandem with criminal charges.
  
  
• While the OFAC has implemented a TCOs sanctions program since 2011, and over 150 entities and individuals have been designated as TCOs, the Memoranda and the President’s Executive Order are less clear on who or what would be considered “cartels.” Companies are strongly encouraged to remain vigilant, have screening and other compliance tools in place, and prepare to act quickly if and when OFAC and/or the State Department officially designate certain entities.


• Entities that rely on commercial shipping can anticipate delays and interruptions to the supply chain due to more frequent inspection, interdiction, seizure, and forfeiture of commercial shipping vessels. Supply chains will likely be under heightened scrutiny by law enforcement officials for potentially containing narcotics, precursor chemicals, petroleum products, and/or human trafficking victims.


• Entities are encouraged to increase their counterparty due diligence efforts and should consider terminating relationships with counterparties who fail to adequately respond to due diligence requests due to the risk that they could be affiliated with cartels, TCOs, or Hamas.


• With US enforcement of cartel- and TCO-related cases taking priority, other jurisdictions may take the lead in prosecuting foreign corruption cases that involve multiple jurisdictions.


• Workforces will be under heightened scrutiny, and entities employing individuals without lawful status may face investigations by DOJ components and/or the Department of Homeland Security. Entities are encouraged to prepare for potential audits and inquiries about their employees and contractors and possible removals of the same.


• Companies, particularly those involved in financial services or global trade with operations or customers in Latin America or the Middle East, are encouraged to be prepared to respond to law enforcement inquiries and visits.


• Healthcare providers who use fentanyl lawfully are encouraged to prepare for the possibility that such use could become unlawful if fentanyl is moved from Schedule II to Schedule I.

For more information

If you have any questions about the implications of the new DOJ policy directives, please contact the authors, your DLA Piper relationship attorney, or any member of DLA Piper’s White Collar or National Security and Global Trade practices.