Financial Advisory

In June 2025, the US Department of Justice (DOJ) declined to prosecute White Deer Management LLC, a private equity firm, after it voluntarily disclosed violations of US sanctions and export control laws committed by its acquired company, Unicat Catalyst Technologies LLC. The DOJs decision was influenced by White Deers proactive approach, which included full cooperation and significant remediation efforts following the discovery of the violations. The issues arose when White Deer acquired Unicat and subsequently uncovered that the former CEO had conspired to sell products to customers in sanctioned countries, generating approximately $3.33 million in revenue from these illegal transactions. Upon discovering a pending transaction with an Iranian customer, White Deers new management immediately canceled it and initiated an internal investigation. They retained legal counsel and, before the investigation concluded, submitted a voluntary self-disclosure (VSD) to the DOJ. The DOJs declination marked a significant application of its Enforcement Policy for Business Organizations in the context of mergers and acquisitions. White Deers disclosure was deemed timely, occurring within three months of discovering the misconduct, despite the acquisition having closed ten months prior. The DOJ recognized White Deers bona fide acquisition and noted that the firm had no pre-existing disclosure obligation. The firms actions mitigated potential national security risks and demonstrated exceptional cooperation by providing all relevant facts and records, including those from employees personal devices. As a result of the self-disclosure, Unicat entered into a non-prosecution agreement (NPA) with the DOJ, agreeing to forfeit proceeds from the violations and pay civil penalties to the Office of Foreign Assets Control (OFAC) and the Bureau of Industry and Security (BIS). OFAC imposed a civil monetary fine of $3,882,797, which was less than the maximum penalty due to mitigating factors such as the cooperation shown by Unicat and the extensive internal investigation conducted. The case underscores the importance of post-acquisition due diligence and the benefits of self-disclosure, as both the acquiror and the acquired entity were able to avoid more severe penalties through their proactive measures. White Deers experience illustrates the critical need for companies to act swiftly and comprehensively in addressing compliance issues to leverage the DOJs MA policy effectively.