Scaled-back Alibaba settlement reflects DOJ's approach to food and drug cases
The scaled-backed Alibaba settlement reflects a broader trend by the DOJ of pulling back on criminal enforcement of corporate cases involving the safety of food, drugs, and medical devices.
For eight years, Chinese online retailer Alibaba and its U.S. payment processing company failed to preven t dangerous drugs, chemicals and pill presses from being sold to American customers — even after employees warned of compliance problems, public records show.
Prosecutors at the Justice Department believed they had enough evidence to prove that the companies had committed felony violations of the Food, Drug and Cosmetic Act, multiple sources with knowledge of the matter told CBS News.
That law, first enacted in 1938, prohibits the sale, distribution or manufacturing of counterfeit, adulterated or misbranded drugs and medical devices, as well as food, supplements and cosmetics.
The case, which started during President Trump's first administration, took several years and involved investigators from multiple agencies. The evidence only became stronger during the Biden administration, after a senior official in then-Deputy Attorney General Lisa Monaco's office urged staff to keep digging, rather than settle it for less, several people familiar with the details of the case told CBS News.
As the case moved toward a resolution in recent months, career prosecutors urged Justice Department leadership to enter into a deferred prosecution agreement with Alibaba and AUS Merchant Services Inc., in which they would admit to the felony offenses, one of the sources said.
Instead, the case was recently resolved for $600 million in penalties and forfeitures and a non-prosecution agreement in which the company only admitted to committing lesser misdemeanor violations.