Skip to main content
Menu Icon Menu Icon
Close

FCPA Scorecard Blog

Foreign Corrupt Practices Act & Anti-Corruption

Filter

Subscribe to our FinCrimes Update for news about the Foreign Corrupt Practices Act and related prosecutions and enforcement actions.

  • World Bank Sanctions Two French Companies for Corruption in Developing Countries

    The World Bank recently sanctioned two French companies for separate allegations of corruption in developing countries. On November 30, the World Bank announced that Oberthur Technologies SA, a French digital security company, was debarred for 2.5 years for “corrupt and collusive practices” related to a project that would establish a national ID system in Bangladesh. As part of its Negotiated Resolution Agreement (NRA), Oberthur acknowledged “improper payments to a sub-contractor and collusive misconduct to obtain and modify bid specifications to narrow competition and secure the award of the contract.” Oberthur was credited for its “extensive cooperation” with the World Bank’s investigation, including voluntarily acknowledging the misconduct, proactively conducting an internal investigation, holding individuals accountable, and taking “preliminary steps to improve its governance and compliance procedures.”

    On December 5, the World Bank separately announced that Sediver SAS, a French manufacturing company, was debarred for two years for a “corrupt practice” related to a project that would improve electricity infrastructure in the Congo. A World Bank investigation found evidence that the company “made improper payments to an employee of a consulting company to influence a tender process.” Under the NRA, Sediver’s parent company was also “conditionally non-debarred” for an 18-month probationary period. The holding company for the entities agreed to pay €6.8 million to the Congo, and the companies agreed to develop and implement a “group-wide integrity compliance program.” The holding company was credited for its “ongoing cooperation” with World Bank investigators, “acceptance of responsibility,” and “voluntary corrective and remedial actions.”

    International Sanctions Anti-Corruption

    Share page with AddThis
  • Court Reduces Sentence for Former Cayman Islands Soccer Executive Who Pleaded Guilty in FIFA Investigation

    On December 12, Judge Chen of the U.S. District Court for the E.D.N.Y. amended the recent sentence entered against Costas Takkas, former general secretary of the Cayman Islands Football Association. On October 31, Mr. Takkas was sentenced to serve 15 months in prison, pay $3 million in restitution, and observe a ban from international soccer organizations FIFA, Caribbean Football Union (CFU), and the Confederation of North, Central American and Caribbean Association Football (CONCACAF). Under the amended sentence, Mr. Takkas was credited 10 months for time served in a Swiss jail prior to extradition; the other terms remained the same. 

    Mr. Takkas was arrested in Zurich in 2015, as part of the U.S. government’s investigation into corruption involving FIFA. Earlier this year, Mr. Takkas pleaded guilty to a conspiracy charge, admitting that he laundered millions of dollars in bribes from sports marketing companies to Jeffrey Webb, his longtime associate and the former president of CONCACAF. Mr. Takkas is the second individual sentenced among a group of more than 40 who have been indicted or pleaded guilty since 2015. Previous FCPA Scorecard coverage of the FIFA investigation can be found here.

    International FIFA Bribery Anti-Money Laundering

    Share page with AddThis
  • Deputy Attorney General Rod Rosenstein Announces Expansion of FCPA Pilot Program

    On November 29, Deputy Attorney General Rod Rosenstein issued remarks announcing that the DOJ’s FCPA Pilot Program will be made permanent and expanded to provide greater incentives for more companies to voluntarily disclose potential FCPA violations. The new program will be formally incorporated into the US Attorney’s Manual. These changes will include greater potential benefits offered to companies that promptly disclose suspected FCPA violations.

    Rosenstein identified three components of what will be called the “FCPA Corporate Enforcement Policy.” First, companies who voluntarily disclose, fully cooperate with the DOJ’s investigation, and undertake “timely and appropriate remediation” will be entitled to a presumption that the matter will be resolved through a declination, which “may be overcome only if there are aggravating circumstances related to the nature and seriousness of the offense, or if the offender is a criminal recidivist.” Second, if the company satisfies all other requirements but there are “aggravating circumstances,” the DOJ “will recommend a 50% reduction off the low end of the Sentencing Guidelines fine range,” although “criminal recidivists may not be eligible for such credit.” And third, the policy will provide details on how the DOJ “evaluates an appropriate compliance program, which will vary depending on the size and resources of a business.”

    The Pilot Program began in April 2016. It was greeted with some skepticism that the benefits of disclosure would outweigh the potential benefits, as Rosenstein noted in his remarks. Click here to view previous FCPA Scorecard coverage of the Pilot Program. 

    DOJ FCPA Pilot Program FCPA

    Share page with AddThis
  • SBM Offshore Agrees to Pay DOJ $238 Million; Two Former Executives Charged by UK SFO

    On November 29, Dutch oilfield company SBM Offshore entered into a three year deferred prosecution agreement with the DOJ to settle allegations that SBM paid bribes to secure contracts in various countries around the world. Under the agreement, SBM agreed to pay a total of $238 million, including a $500,000 criminal fine and forfeiture of $13.2 million. The next day, the UK Serious Fraud Office announced that two former SBM executives had been charged with conspiracy to make corrupt payments in connection with government contracts in Iraq between 2005 and 2011. 

    Earlier this month, two different former SBM executives pleaded guilty in US federal court to paying bribes to government officials in Brazil, Angola, and Equatorial Guinea. Click here for FCPA Scorecard’s prior coverage of these guilty pleas. SBM has been involved in a sprawling bribery investigation involving enforcement officials in the United States, the UK, Brazil and the Netherlands. The DOJ closed its investigation in 2014 before reopening it in February of 2016. Click here to view previous FCPA Scorecard coverage of the SBM investigation.

    The company’s deferred prosecution agreement states that SBM did not receive voluntary disclosure credit even though it voluntarily disclosed the conduct to the DOJ, because the disclosure was untimely as it took place “approximately one year” after the company learned of the information. It also states that SBM received full cooperation credit because it conducted a “thorough internal investigation, [made] regular factual presentations” to the DOJ, “voluntarily [made] foreign-based employees available for interviews in the United States, [produced] documents to the United States from foreign countries” and expedited parts of the internal investigation. The deferred prosecution agreement goes on to detail the remedial measures that SBM has taken to improve its compliance function, which included hiring a third party to design and implement a new compliance program, reduce the number of third party agents engaged by the company, and terminate relationships with questionable third parties. It goes on to explain that all of these factors weighed in the DOJ’s decision not to seek a guilty plea by the company. This information provides insight into the DOJ’s expectations for receiving disclosure and compliance credit.

    DOJ SBM UK Serious Fraud Office

    Share page with AddThis
  • DOJ Charges Head of Organization Backed by Chinese Energy Conglomerate and Former Foreign Minister of Senegal with Bribing High-Level Officials in Chad and Uganda

    On November 20, the DOJ unsealed a criminal complaint charging Ching Ping Patrick Ho and Cheikh Gadio (collectively, the “Defendants”) with participating in a multi-year, multimillion-dollar scheme to bribe high-level officials in Chad and Uganda in exchange for business advantages for a Shanghai-based energy conglomerate (the “Energy Company”). Mr. Ho is the head of a non-governmental organization based in Hong Kong and Virginia that holds “Special Consultative Status” with the United Nations Economic and Social Council. The Energy NGO is funded by the Energy Company. Mr. Gadio is the former Foreign Minister of Senegal and operated an international consulting firm. The DOJ charged Mr. Ho and Mr. Gadio with (i) conspiring to violate the FCPA, (ii) violating the FCPA, (iii) conspiring to commit international money laundering, and (iv) committing international money laundering. The Defendants have both been arrested and presented before Magistrates. 

    The DOJ alleges that the Defendants conspired to bribe African government officials on behalf of the Energy Company. Specifically, the DOJ alleges that in an effort to secure oil rights from the Chadian government, the Defendants offered a $2 million bribe to the President of Chad – and in return, the Defendants secured exclusive oil rights without competition. The Defendants allegedly wired almost a million dollars through New York’s banking system in furtherance of their scheme. Mr. Ho also allegedly provided Ugandan officials with gifts and promises to share profits derived from the Energy Company.

    DOJ Bribery FCPA

    Share page with AddThis
  • Two Former SBM Offshore Executives Plead Guilty to FCPA Violations

    The Department of Justice announced last week that two former executives of SBM Offshore (“SBM”), a Dutch oil and gas services company, pleaded guilty in U.S. District Court for the Southern District of Texas. Anthony Mace, SBM’s CEO from 2008 to 2011, and Robert Zubiate, a former U.S.-based sales and marketing executive, admitted their involvement in a scheme to bribe government officials in Brazil, Angola, and Equatorial Guinea. The government’s allegations relate to payments made and kickbacks provided to foreign officials in exchange for their assistance in securing contracts in those countries.

    Zubiate is scheduled for sentencing on January 31, 2018, and Mace is scheduled for sentencing on February 2, 2018.

    Click here for FCPA Scorecard’s prior coverage of this matter.

    DOJ SBM Offshore N.V. Bribery

    Share page with AddThis
  • Wal-Mart Sets Aside $283 Million for Potential Resolution of FCPA Allegations

    On Thursday, November 16, 2017, Wal-Mart Stores, Inc. (“Wal-Mart”) disclosed in an SEC filing that it has set aside $283 million for a potential resolution with DOJ and SEC of alleged FCPA violations. The investigation into possible FCPA violations in Mexico was first disclosed in Wal-Mart’s December 2011 SEC filing and, in subsequent filings, Wal-Mart stated that the allegations had been expanded to include possible violations in Brazil, China, and India, among others.

    In its November 16 filing, Wal-Mart reiterated that it has been cooperating with the DOJ and SEC in their investigations, and the discussions with these government agencies has progressed such that Wal-Mart can reasonably estimate a probable loss of $283 million, although it noted that the company cannot assure that its efforts to resolve these matters will ultimately succeed as anticipated.

    Click here for FCPA Scorecard’s prior coverage of this matter.

    SEC DOJ FCPA Wal-Mart

    Share page with AddThis
  • DOJ Charges Five Individuals With FCPA Violations Involving Rolls-Royce

    On November 7, the DOJ unsealed FCPA charges against five individuals for their alleged participation in a foreign bribery scheme involving Rolls-Royce plc and its U.S. subsidiary (Rolls-Royce). Of the five individuals, one was indicted while the remaining four pleaded guilty for their roles in an alleged scheme to pay bribes to a Kazakhstan official in order to secure a supply contract for a gas pipeline from Kazakhstan to China.  The charges and guilty pleas were unsealed in Ohio federal district court. 

    These charges follow on the heels of the company’s January 2017 settlement with DOJ in which Rolls-Royce agreed to a three-year deferred prosecution agreement and agreed to pay $170 million to resolve charges that it conspired to violate the anti-bribery provisions of the FCPA around the world. As part of the DOJ settlement, Rolls-Royce agreed to continue to cooperate fully with the DOJ’s investigation, including its investigation of individuals. The DOJ settlement comprised just a fraction of the $800 million total penalty Rolls-Royce agreed to pay as part of a global resolution related to the corrupt conduct.  

    Of the four guilty pleas, three individuals (a former executive of Rolls-Royce, a former employee of Rolls-Royce, and an executive at an international engineering consulting firm) pleaded guilty to one count of conspiracy to violate the FCPA. The fourth individual (a former senior executive of Rolls-Royce) also pleaded guilty to one count of violating the FCPA in addition to conspiracy. The indicted individual, a former CEO of a Rolls-Royce intermediary, was charged with one count of conspiracy to violate the FCPA and seven counts of violating the FCPA, along with various money laundering charges. 

    The DOJ’s announcement noted the “significant cooperation and assistance” from the UK SFO and Brazil law enforcement.  This continues the increased trend of DOJ receiving and then highlighting cooperation efforts by its international counterparts.

    DOJ FCPA Enforcement Action Rolls Royce UK Serious Fraud Office

    Share page with AddThis
  • Charles Cain Named New SEC FCPA Chief

    After serving as Acting Chief of the SEC’s Enforcement Division’s Foreign Corrupt Practices Act Unit for more than six months, SEC veteran Charles Cain will now officially take on the position of head of the FCPA Unit. According to an SEC press release, Cain intends “to build[] upon the important work the unit has done to combat corruption and level the playing field globally.” The SEC named Cain to the Acting Chief role in April 2017 after his predecessor, Kara Brockmeyer, left the agency

    After graduating with honors from The George Washington University Law School, Cain spent two years in the private sector before joining the SEC in 1999. In addition to serving as Deputy Chief of the FCPA Unit since 2011, Cain co-authored A Resource Guide to the U.S. Foreign Corrupt Practices Act, an effort for which he received the Irving M. Pollack Award.

    SEC FCPA

    Share page with AddThis
  • SAP Self-Discloses Approximately $6.8 Million in Payments to Gupta Family-Related South African Entities

    On October 26, SAP, a German multinational software corporation, announced that it has voluntarily disclosed commission payments of approximately $6.8 million to Gupta family-related entities to the U.S. Department of Justice and the Securities and Exchange Commission.  The voluntary disclosure in July has led to an ongoing DOJ and SEC investigation into SAP’s conduct. 

    SAP acknowledged that between December 2014 and June 2017, contracts with Transnet and Eskom, both South African state-owned companies, were closed with the assistance of Gupta family-related entities.   SAP’s internal investigation has also led to the initiation of disciplinary proceedings against three employees in South Africa.  The Gupta family, which is connected to South African president Jacob Zuma, has previously denied wrongdoing associated with receiving such kickbacks.  While acknowledging cooperation with the DOJ and the SEC, SAP stated that it has had no interaction with South African authorities and has not decided whether the company will approach South African authorities in the future.  The U.S. investigation is ongoing and SAP has acknowledged that it has begun the process of sharing documents with authorities.

    SEC DOJ Anti-Corruption

    Share page with AddThis

Pages