By Lionel André and John P. Rowley III, Partners, SECIL Law PLLC | Washington, D.C.
When private equity firm White Deer Management LLC discovered that a newly acquired portfolio company, Unicat Catalyst Technologies, had engaged in criminal violations of U.S. sanctions and export laws, it acted decisively: it halted unlawful transactions, launched an internal investigation, retained outside counsel, and voluntarily self-disclosed the violations to the Department of Justice (DOJ).
Those decisive actions are a clear example of successful corporate leadership: timely internal investigation, swift disclosure, and robust cooperation can preserve reputational value and avoid criminal liability.
The Outcome: No Prosecution
On June 16, 2025, the DOJ’s National Security Division (NSD) and the U.S. Attorney’s Office for the Southern District of Texas publicly announced their decision to decline prosecution against White Deer. In addition, the DOJ entered into a non-prosecution agreement with Unicat, while securing a guilty plea and a $1.6 million money judgment from Unicat’s former CEO, Mani Erfan, for his role in a wide-ranging scheme to violate U.S. sanctions against Iran, Venezuela, Cuba, and Syria.
This marks the first declination issued under the DOJ’s 2024 Mergers & Acquisitions (M&A) Policy, a milestone emphasizing the Department’s growing focus on incentivizing self-policing and voluntary disclosures.
Key Takeaways for Corporate Decision-Makers
- Internal Investigations Must Be Prompt, Thorough, and Independent
White Deer acted within weeks of learning of a suspicious transaction. The new CEO, while integrating Unicat post-acquisition, canceled a pending deal with an Iranian customer and quickly brought in counsel to investigate. By the time the voluntary disclosure was made, the company had already confirmed multiple violations of sanctions and begun identifying the responsible parties.
Leadership must empower internal teams and external advisors to investigate red flags with independence and urgency.
- Voluntary Self-Disclosure Protects the Acquirer
Under the NSD’s M&A Policy, acquirers that complete a bona fide acquisition, promptly self-disclose, cooperate fully, and remediate appropriately are entitled to a presumption of declination from criminal prosecution, even when the acquired entity committed serious violations.
The DOJ is signaling that it rewards transparency—particularly when the violations originate before the acquisition and are swiftly addressed.
- Robust Cooperation Earns Real Credit
White Deer and Unicat provided full cooperation, including making overseas records available, translating foreign language materials, and delivering proactive updates. They terminated responsible employees, redesigned their compliance infrastructure, and took steps to recover funds from the sellers.
Cooperation isn’t just checking boxes—it’s showing a meaningful commitment to accountability and reform.
- Failure to Investigate Post-Acquisition Can Be Costly
Had White Deer ignored or delayed its response, it may well have faced prosecution, financial penalties, or reputational damage. Instead, DOJ statements emphasized White Deer’s “responsible corporate leadership” in discovering and halting the misconduct.
Inaction is a risk multiplier. Every delay in confronting known or suspected violations increases the potential for legal and financial exposure.
What This Means for You
Whether you’re a corporate executive overseeing M&A activity, an in-house counsel charged with compliance oversight, or outside counsel advising a buyer in a transaction, this case should be a blueprint:
- Due diligence must continue post-closing. Even a comprehensive pre-acquisition review cannot uncover every hidden risk.
- Build a rapid response framework so that when red flags arise, your organization can respond swiftly with legal, operational, and compliance resources.
- Document everything. The DOJ places significant weight on a company’s ability to demonstrate its intent, its actions, and its cooperation.
- View compliance as a strategic asset, not a regulatory burden. White Deer’s commitment to transparency protected its investment, reputation, and leadership.
Conclusion
The White Deer case underscores that proactive compliance isn’t just sound ethics—it’s smart business. In today’s climate of heightened enforcement and geopolitical sensitivity, companies that self-police and collaborate with the government are increasingly seen not as violators, but as partners in upholding national security and the rule of law.
The decision to voluntarily disclose to the government is always context-dependent. We would not suggest, as a blanket rule, that disclosure is the best or only course of action in every case—even in light of the favorable outcome here. Rather, companies and their counsel must carefully weigh both the potential benefits and risks of disclosure. These decisions demand thoughtful, experience-driven analysis. It helps to work with counsel who understands not only what can go right—but also what can go wrong.
If your company uncovers potential misconduct, don’t delay. Investigate, disclose, cooperate, and remediate. The DOJ is watching—and it’s prepared to reward those who lead with integrity.
About the Authors:
Lionel Andre is a former Assistant United States Attorney in the Fraud & Public Corruption Section of the U.S. Attorney’s Office and a former Assistant Chief Litigation Counsel in the SEC’s Division of Enforcement, with more than 30 years of experience handling complex white-collar cases. John P. Rowley III is a former federal prosecutor with decades of experience representing clients in high-stakes trials and investigations. Together, they help lead SECIL Law’s white-collar practice, offering clients strategic counsel, seasoned judgment, and a track record of success in sensitive enforcement matters.
Lionel and John can be reached at landre@secillaw.com and jrowley@secillaw.com respectively.
