Federal prosecutors are increasingly scrutinizing how the administration’s regulatory agenda intersects with commercial real estate, according to Partner Todd Gee and Associate Sydney Sznajder of Husch Blackwell. The Department of Justice’s evolving approach could heighten exposure for developers, investors and others in the sector, particularly as it expands enforcement around financial transparency and corporate accountability.
The DOJ’s priorities now include tracing whether foreign investment in U.S. real estate involves funds tied to sanctioned individuals or countries. Prosecutors are also expected to pay closer attention to potential money laundering through development projects, including funds linked to drug cartels or terrorist organizations. Developers could face additional questions about sourcing construction materials—particularly if mislabeled imports are used to sidestep tariffs—and about the legal work eligibility of contractors and construction crews.
According to Husch Blackwell, the DOJ has overhauled its white-collar crime enforcement structure on three pillars: targeting high-impact crimes, ensuring fairness through proportionate enforcement and improving efficiency through streamlined investigations. For the commercial real estate industry, possible areas of heightened enforcement include trade and customs fraud, such as tariff evasion and complex money laundering activities involving layered financial transactions.
A key component of this shift is the DOJ’s new corporate voluntary disclosure framework, which offers three main paths to resolution. Companies that voluntarily self-disclose misconduct, cooperate fully with investigators and take timely remedial steps may avoid prosecution altogether. For cases in which declination is not available—such as when the government already knows the issue—prosecutors may instead pursue a non-prosecution agreement. These agreements typically last fewer than three years and can result in penalties that are about 75 percent lower than the low end of the U.S. Sentencing Guidelines range. In other situations, a guilty plea may still be required, though fines can be reduced by up to half of the prescribed range.
The department has also revised its Corporate Whistleblower Awards Pilot Program. Only individuals are eligible to report violations, and they must provide original information derived from their own knowledge or analysis. The program offers potentially significant monetary rewards to those who assist investigators with actionable intelligence.
Gee and Sznajder advise commercial real estate companies to strengthen internal compliance programs and document review processes in anticipation of tougher enforcement. They recommend retaining outside counsel for independent investigations when risks arise, ensuring compliance teams are fully briefed on emerging enforcement trends, closely monitoring vendor selection and procurement procedures, maintaining thorough records and providing regular employee training.
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