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  • GSK responding to inquiries from SFO, DOJ, and SEC regarding its use of third party advisors in China

    In a securities filing on Wednesday, Feb. 7, U.K.-based pharmaceutical company GlaxoSmithKline PLC (“GSK”) announced that it is responding to requests for information from the DOJ and SEC regarding third-party advisors that GSK engaged in China. These requests came about after GSK, pursuant to its continuing obligation to report to the SEC on its efforts to improve compliance following its September 2016 settlement of allegations that it violated the FCPA, informed the SEC and DOJ that the SFO had sought additional information in the course of its own investigation, which began in May 2014. GSK was also investigated by Chinese authorities and, in September 2014, GSK’s Chinese subsidiary was reportedly found guilty of bribery resulting in GSK’s payment of a $491.5 million fine. 

    Previous FCPA Scorecard coverage here and here.

    DOJ SEC FCPA SFO Bribery

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  • Allegations by short seller lead to corruption investigation of OSI systems

    In a securities filing on Thursday, Feb. 1, California-based OSI Systems, Inc. revealed that the DOJ and SEC have launched investigations into its FCPA compliance and regarding trading by company employees in the OSI Systems securities. These investigations were spurred by a report issued in December 2016 by a short seller, Muddy Waters LLC, which accused OSI of paying bribes to win a major contract in Albania. OSI Systems has denied that allegation, and stated in its Form 8-K filing that it is cooperating with the government’s investigations.

    DOJ SEC FCPA

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  • SEC declines enforcement against Cobalt in FCPA investigation for second time

    Houston-based Cobalt International Energy, Inc. announced in a January 29, 2018 8-K filing that the SEC had concluded its second investigation relating to the company’s operations in Angola, and that SEC staff did not intend to recommend an enforcement action. The SEC’s investigation began in March 2017. As detailed in previous FCPA Scorecard posts, this follows the DOJ’s February 2017 declination and the SEC’s January 2015 declination following other investigations of the company’s Angola operations.

    SEC Cobalt International Energy Angola

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  • SFO confirms opening of criminal investigation into aerospace and defense group

    On January 18, the Serious Fraud Office (“SFO”) confirmed the opening of an investigation of Chemring Group PLC (“Chemring”) and its subsidiary, Chemring Technology Solutions Limited (“CTSL”) into alleged bribery, corruption, and money laundering. Chemring, a UK-based company that designs and makes products in the aerospace and defense industries, stated that the investigation followed a voluntary report from CTSL relating to “two specific historic contracts.” According to Chemring, the first of these contracts was awarded before the company took over the business group being investigated, while the second contract occurred after the acquisition. Chemring stated that the company will fully cooperate with the SFO’s investigation and provide further updates.

    UK Serious Fraud Office Fraud Bribery Anti-Corruption Anti-Money Laundering Chemring

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  • Criminal charges unsealed against former executive of hedge fund manager

    The DOJ recently unsealed criminal charges against a former hedge fund executive. This indictment follows a civil suit filed in January 2017 against the executive and others by the SEC regarding FCPA violations. In 2016, the DOJ and SEC also pursued a joint FCPA enforcement action against his former employer, an American hedge fund management firm, alleging various bribes, self-dealing, and other malfeasance relating to the procurement of mineral, oil, and other natural resource contracts in African counties.

    While the SEC’s initial January 2017 civil matter against the executive alleged FCPA violations, the recently announced criminal indictment does not directly charge him with violating the FCPA.  He is alleged to have obstructed the DOJ and SEC’s investigations of the firm and made false statements, but also to have committed investment advisor fraud.

    DOJ SEC FCPA

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  • Judge denies bail to former Hong Kong official, who pleads not guilty to alleged African bribery

    Patrick Ho, a former Hong Kong official, reportedly entered a not guilty plea and was denied bail in federal district court in New York related to a number of FCPA, conspiracy, and money laundering counts. Ho was charged in late 2017, along with his co-defendant Cheikh Gadio, the former Foreign Minister of Senegal, with offering $2 million in bribes to the President of Chad. Ho is also alleged to have paid a half-million dollar bribe to the foreign affairs minister of Uganda. The DOJ alleges that Ho sought to direct bribe money through an NGO that he ran, which is funded by a Chinese-based oil and gas company.

    FCPA Anti-Money Laundering

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  • DOJ unseals 11-Count FCPA indictment against Maryland executive

    In an indictment unsealed on January 5, the DOJ charged a former executive of a Maryland company, Mark Lambert, with 11 criminal counts, including seven counts of violating the FCPA and one count of conspiracy to violate the FCPA. The allegations relate to an alleged scheme to bribe Vadim Mikerin, an official at TENEX, a Maryland-based Russian energy company that is a subsidiary of Russia’s State Atomic Energy Corporation, as well as the sole supplier and exporter of Russian Federation uranium  and uranium enrichment services. Lambert alleged sought to improperly obtain awards of nuclear transportation contracts from TENEX to his company. Several other key players in the case already have pleaded guilty, including Lambert’s former business associate as well as Mikerin. Although sentencing for a number of the parties is forthcoming, Mikerin already has been ordered to forfeit $2.1 million following his guilty plea.  The initial investigation began in 2007 as part of a joint DOE-OIG and FBI probe into Mikerin for laundering the funds derived from the scheme into offshore accounts.

    DOJ FCPA Russia

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  • Real estate broker and nephew of former UN Secretary-General pleads guilty to FCPA charges

    On January 5, 2018, the Department of Justice announced that Joo Hyun Bahn, also known as Dennis Bahn, pleaded guilty to charges that he tried to bribe a Qatari official in connection with a sale of a high rise building complex in Vietnam. He pleaded guilty to one count of conspiracy to violate the FCPA and one count of violating the FCPA before U.S. District Judge Edgardo Ramos of the Southern District of New York. Mr. Bahn was charged with his father Ban Ki Sang, who was an executive at the South Korean construction company Keangnam, and Malcolm Harris, an arts and fashion blogger, in December 2016. Mr. Bahn is the nephew of former UN Secretary-General Ban Ki-moon.

    In his guilty plea, Mr. Bahn admitted to joining a conspiracy to make $2.5 million in bribe payments to a Qatari official between February 2014 and May 2015 in an effort to sell the Keangnam-owned Hanoi Landmark Tower and residential buildings in Vietnam, which were worth $800 million. Mr. Bahn admitted that he and Mr. Ban agreed to pay $500,000 to a Qatari official to persuade the official to use the Qatari sovereign wealth fund to purchase the building. The $500,000 was then transferred to Mr. Harris, who posed as an agent for the foreign official, but instead of passing the payment to the foreign official, Mr. Harris double-crossed his codefendants and stole the $500,000. 

    Although the scheme involved a South Korean construction company and a Qatari foreign official, the Indictment alleged that Mr. Bahn qualified as a “domestic concern” pursuant to 15 USC 78dd-2(h)(1) because he was a lawful permanent resident of the United States and resided in New Jersey at the time. 

    Mr. Bahn faces up to five years in prison on each count. Mr. Harris previously pleaded guilty to charges of wire fraud and money laundering for his role in the scheme, and was sentenced to 42 months in prison. Mr. Ban has been charged, but not yet arrested.

    DOJ FCPA Bribery Qatari Vietnam

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  • Keppel agrees to $422 million penalty to resolve foreign bribery case

    On December 22, 2017, Singapore-based shipyard operator and shipping vessel repair company Keppel Offshore & Marine Ltd. (KOM), and its wholly owned U.S. subsidiary, agreed to pay a combined total penalty of $422 million to resolve foreign bribery charges by the DOJ. Authorities in the United States, Brazil, and Singapore alleged that the companies engaged in a decade-long scheme to pay tens of millions of dollars in bribes to officials in Brazil, including those of state-owned oil company Petrobras. As part of the resolution, KOM entered into a deferred prosecution agreement while its U.S. subsidiary, KOM USA, pleaded guilty, as did a former senior member of KOM’s legal department. The settlement is one of the largest FCPA enforcement penalties and also represents DOJ’s first coordinated FCPA resolution with Singapore. The settlement represents a 25 percent reduction off the bottom of the applicable U.S. Sentencing Guidelines fine range due to substantial cooperation by the companies with the investigation and the taking of remedial measures, including disciplining employees and implementing an enhanced compliance system. 

    FCPA Enforcement Action DOJ Bribery Keppel Petrobras United States Brazil Singapore FCPA

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  • $2.95 billion settlement in Petrobras class action

    On January 3, 2018, Petrobras announced that it has agreed to pay $2.95 billion to resolve the securities class action pending in the U.S. District Court for the Southern District of New York regarding the company’s well-known corruption scandal in Brazil. The class action claimed that investors were harmed by alleged corruption when contractors overcharged Petrobras and kicked back some of the overcharges through bribes to Petrobras officials. Under the proposed settlement, Petrobras has agreed to pay the funds in three installments. The agreement does not constitute any admission of wrongdoing or misconduct by Petrobras and Petrobras claims that this reflects its status as a victim of the acts uncovered in Operation Car Wash, as the corruption investigation in Brazil is known. The settlement agreement is still subject to approval by the District Court.

    Past ScoreCard coverage related to the Petrobras corruption allegations and investigation can be found here

    Score Card Petrobras Brazil Anti-Corruption

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