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  • Deputy AG Rosenstein Underscores Importance of Consistency in FCPA Enforcement

    Financial Crimes

    Deputy Attorney General Rod Rosenstein recently issued remarks highlighting the importance of the DOJ’s consistency in enforcing policies “hold[ing] individuals accountable for corporate wrongdoing.” In particular, Deputy AG Rosenstein stated that the agency should focus on improving the recent track record of brining criminal proceedings against company employees—noting that the last 20 DOJ corporate FCPA enforcement actions have lacked related criminal charges against company employees—and that, going back to 2008, approximately 80% of DOJ corporate FCPA enforcement actions have lacked related criminal charges against company employees. He noted that various DOJ policies, including the Yates Memo and the FCPA Pilot Program, have shifted the focus away from entity liability, and toward issues surrounding individual officer or director liability.

    The comments are yet another in the steady drumbeat of calls, both internal and external to the DOJ, for DOJ enforcement strategy to hold individual corporate employees accountable for FCPA violations, although how much that strategy is being implemented remains to be seen. As Deputy AG Rosenstein’s comments concluded: “When we are serious about wanting people to follow rules, it does no good merely to post them. We need to make clear our intent to enforce the rules, with sufficient vigor that people fear the consequences of violating them.”

    Financial Crimes FCPA Enforcement Action State AG DOJ FCPA Pilot Program

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  • Engineering and Construction Firm Receives Declination of FCPA Charges

    Financial Crimes

    On June 21, the DOJ issued a declination letter to attorneys for a Boston-based privately held engineering and construction firm, in which the DOJ declined prosecution and closed an investigation of the firm regarding potential FCPA violations that occurred in India between 2011 and 2015. The firm agreed to pay DOJ approximately $4 million in disgorgement. The DOJ announced the declination on June 29 with a link posted on its website, making it the second FCPA declination that the DOJ announced in June 2017. Prior to June, the DOJ had last issued an FCPA declination letter in September 2016. 

    According to the DOJ Letter, the firm paid approximately $1.18 million in bribes to India government officials in exchange for contracts that resulted in approximately $4 million in net profits (the disgorgement amount). The payments were made by the firm's division responsible for India operations and by the firm's wholly-owned subsidiary in India through fraudulent subcontractors and generally equaled two to four percent of the contract price. 

    The DOJ’s letter stated that its decision to close its investigation is consistent with the FCPA Pilot Program, launched in April 2016 to encourage companies to “voluntarily self-disclose FCPA-related misconduct, fully cooperate with the Fraud Section, and, where appropriate, remediate flaws in their controls and compliance programs.” Accordingly, the DOJ determined that the firm had, among other things, made a “timely and voluntary self-disclosure” of potential FCPA violations, conducted and “thorough and comprehensive investigation,” fully cooperated with the DOJ, and performed full remediation, including the termination of all of the executives and employees involved in the conduct at issue. However, the letter provides little detail about these factors. 

    The DOJ letter makes clear that it does not foreclose future prosecution of any individuals connected to this matter, whether affiliated with the firm or otherwise.

    Financial Crimes DOJ FCPA Pilot Program Bribery FCPA

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  • DOJ’s Trevor McFadden Addresses Anti-Corruption, Export Controls & Sanctions Compliance Summit

    Financial Crimes

    On April 18, Acting Principal Deputy Assistant Attorney General Trevor McFadden spoke at the 10th annual Anti-Corruption, Export Controls & Sanctions Compliance Summit in Washington, D.C. According to Mr. McFadden, the Justice Department “remains committed to enforcing the FCPA and to prosecuting fraud and corruption more generally.” He emphasized the importance of company cooperation, stating that that the department considers voluntary self-disclosures and remedial efforts when making charging decisions. Mr. McFadden also stated that the department is making a “concerted effort to move corporate investigations expeditiously,” adding that FCPA investigations should be “measured in months, not years.”

    Mr. McFadden also discussed an increased prioritization of anti-corruption prosecutions around the world and stated that the DOJ will “seek to reach global resolutions that apportion penalties between the relevant jurisdictions so that companies that want to accept responsibility for misconduct are not unfairly penalized by multiple agencies.”

    Additionally, the department is assessing its FCPA Pilot Program. Last year, as part of the Program, the department began publishing information on cases it declined to prosecute due to voluntary self-disclosure, full cooperation, and comprehensive remediation. Mr. McFadden stated that the Program is “one example of an effort to provide more transparency and consistency for our corporate resolutions” and “will continue in full force.”

    Financial Crimes DOJ Anti-Corruption Export Controls Sanctions FCPA Pilot Program

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  • DOJ Pilot Program Extended to Provide Adequate Time for Evaluation

    Financial Crimes

    Speaking at the American Bar Association’s National Institute on White Collar Crime yesterday, U.S. Department of Justice official Kenneth Blanco reportedly announced that the Justice Department’s FCPA pilot program encouraging corporate cooperation will not end on April 5 of this year as originally announced.  Instead, until the Justice Department is able to render a final decision based on a complete evaluation, the program will remain in force.  Notably, as previously reported, the new Deputy Assistant Attorney General with oversight over the Fraud Section, Trevor N. McFadden, co-authored an article during his time in the private sector praising the program as “a step forward in providing companies and their counsel with more transparent and predictable benefits for self-reporting, cooperating, and remediating FCPA misconduct.”

    Financial Crimes DOJ FCPA Pilot Program

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