US top cop says Justice Department using new tools

* Lanny Breuer cites wiretaps in Galleon and FCPA sting

*"In are the days of proactive enforcement"

By Dan Margolies

MIAMI, Feb 25 (Reuters) - The head of the U.S. Department of Justice's criminal division told a gathering of criminal defense lawyers on Thursday that the division was using tools "not often seen in white collar cases" to combat financial fraud.

In a speech at a white collar crime conference, Lanny Breuer cited the use of wiretaps in the Galleon hedge fund insider trading case and the use of undercover agents in a recent prosecution of 22 people under the Foreign Corrupt Practices Act (FCPA).

"Taken together, these two cases reflect a new chapter in white collar criminal enforcement, one that I'm confident has not gone unnoticed by you, or by your clients," he said.

"Out are the days of resting easy in the belief that only self-reporting or tipsters will bring criminality to light. In are the days of proactive and innovative white collar enforcement."

Breuer called the FCPA case the largest single prosecution of individuals in the history of the Justice Department's enforcement of the statute, which makes it illegal to pay bribes to secure business abroad.

"Put simply," he said, "the prospect of significant prison sentences for individuals should make it clear to every corporate executive, every board member, and every sales agent that we will seek to hold you personally accountable for FCPA violations."

Breuer said the Justice Department would continue to pursue criminal charges against corporations "when the criminal conduct is egregious, pervasive and systemic, or when the corporation fails to implement compliance reforms, changes to its corporate culture, and undertake other measures designed to prevent a recurrence of the criminal conduct."

He urged corporations that discover FCPA or other criminal violations to make voluntary disclosures and cooperate with the Justice Department.

Saying that the department was committed to fighting fraud "from Wall Street to Main Street," Breuer cited as an example establishment of a Medicare Strike Force to combat health care fraud.

Since it first began operating in Miami and Los Angeles in 2007, the strike force has charged more than 300 defendants in 200 cases totaling about $860 million in fraud, he said. Breuer said 230 defendants had been convicted and nearly 200 had been sentenced to prison.

The strike force has expanded its operations to Detroit, Houston, Brooklyn, New York, Tampa, Florida and Baton Rouge, Louisiana as part of a Healthcare Fraud Prevention & Enforcement Action Team.

In the area of mortgage fraud, Breuer said the Justice Department was pursuing enforcement strategies "that are threat-based and intelligence-driven."

To achieve "firm and fair justice," Breuer said the Justice Department was reorganizing sections within the agency "to better rationalize our approach in key programmatic areas."

The department, he said, was also looking at white collar sentencing disparities that lead to vastly different sentences for similar crimes.

He criticized the "few in the defense bar who see blood in the water and are determined to attack the Department's prosecutors indiscriminately - and without any factual basis."

Such tactics, he said, are not acceptable.

"So, as we move forward in our dialogue, let's deliver on our shared responsibility not to distort the truth," he said. "... But above all else, let's deliver on our shared responsibility to serve the interests of justice." (Reporting by Dan Margolies)