The U.S. government is investigating whether Amazon.
Com Inc. may have used laws stemming from the savings and loan crisis to mislead lenders about their workplace safety record and gain credit in a legal action that company lawyers called “unprecedented.” There is a nature.
The Federal Attorney’s Office in Manhattan is investigating Amazon under the Financial Institutions Reform, Recovery and Enforcement Act, a law that allows civil lawsuits for fraud affecting banks. The office is rolling out the 1989 legislation, while the Department of Labor is proceeding with an Amazon workplace safety investigation, which has already led to several citations.
Last December, the Department of Labor named Amazon at six warehouses that didn’t properly report injuries, and this week cited three of the company’s facilities, saying workers were at ergonomic or equipment hazards. Stated.
Amazon has indicated it intends to appeal the citation. The company also said it never knowingly misrepresented its safety record.
Because the Philea case runs under civil law, the government can prove its claims more easily than criminal prosecution.
In August, the Federal Attorney’s Office in Manhattan found that Amazon may have shared information with online retailers over the past five years with at least $90 million in contracts or with financial institutions involved in contracts, particularly information Amazon shared about damages. issued a subpoena to Amazon seeking Complying with Fees and Labor Laws.
A division of Amazon contested the subpoena and related subpoenas in federal court in Seattle last month.
Zainab Ahmad, a partner at Gibson, Dunn & Crutcher Law Firm, said in a letter to government attorneys attached to the court documents that “safety investigations could be pushed into Philea’s investigation.” It’s hard to understand that there is,” he said.
“Philea is dealing with financial fraud, not employee safety,” Ahmad added, calling the federal prosecutor’s office’s legal doctrine “very tenuous” and “unprecedented.”
The office is looking for a variety of documents regarding Amazon’s labor practices, including internal communications that address workplace productivity policies. The office is also seeking video surveillance footage of Amazon facilities and has served subpoenas to obtain testimony from Amazon employees, including senior executives, Ahmad said.
Amazon said in court documents from its Seattle lawsuit that the request for information was “unrealistic,” and the federal attorney’s office reached out to assert jurisdiction under Firrea.
The law was intended to target insiders looting savings and lending institutions, but is being applied in a new way by government attorneys, partners of law firm Sullivan & Cromwell LLP and Philea-related said Robert Jufra, who has worked on the lawsuit. .
“The Department of Justice has a history of abusing the Philea Act and extending it far beyond its intended purpose,” he added.
Firrea emerged as a “superweapon” for the U.S. Department of Justice after the 2008 financial crisis when it was used to sue the banks themselves, according to the Civil Fraud Division of the U.S. Attorney’s Office in Manhattan. said Brian Feldman, a former attorney who had Privately practiced at Harter Secrest & Emery LLP.
Feldman, who worked on Philea-related litigation during his tenure, said that while the Amazon lawsuit would involve a “set of new circumstances,” Philea was written to allow the government to tackle various frauds affecting banks. said to be
Any fraud lawsuit against Amazon would affect whether the company made false statements to lenders and whether those false statements influenced their decision-making, he said.
A spokesman for the Federal Attorney’s Office in Manhattan did not respond to a request for information about the identity of the financial institution whose transactions with Amazon are under scrutiny.
Write to Richard Vanderford at Richard.Vanderford@wsj.com.
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