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  • Florida Energy Company Owner Pleads Guilty to Conspiracy to Violate the FCPA in Venezuelan Bribery Scheme

    Financial Crimes

    On October 11, the DOJ announced that the co-owner of several Florida-based energy companies pleaded guilty to FCPA charges that he conspired to bribe foreign officials in exchange for obtaining contracts from a Venezuela’s state-owned energy company. In his plea, the defendant admitted to conspiring with two other individuals from 2008 through 2014 to bribe purchasing analysts employed by the energy company through cash payments and other entertainment in order to win contracts for their companies. In total, ten individuals have now pleaded guilty in connection with the scheme.    

    This investigation has been a collaboration between the DOJ, ICE-HSI, and IRS-Criminal Investigation Division. Previous FCPA Scorecard coverage of the investigation can be found here.

    Financial Crimes DOJ FCPA Bribery International

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  • Additional Charges for Retired U.S. Army Colonel

    Financial Crimes

    On October 4, the Department of Justice expanded the scope of its indictment against a retired U.S. Army colonel. On August 29, he was charged with conspiracy to violate the Foreign Corrupt Practices Act after he allegedly solicited bribes from undercover agents who posed as potential investors for infrastructure projects in Haiti. The expanded charges include conspiracy to launder money and violate the Federal Travel Act. Prior FCPA Scorecard coverage of the initial indictment and the related FCPA sting operation can be found here.

    Financial Crimes DOJ FCPA

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  • Diagnostic Test Manufacturer Settles FCPA Violations With SEC for $13 Million

    Financial Crimes

    On September 28, the SEC announced that a diagnostic test manufacturer had settled a variety of FCPA books and records and internal control allegations stemming from its sales practices in Africa, Asia, and Latin America, including the failure to improperly characterize and record payments made to government officials in Columbia and India. In concluding the more than two year investigation, the company agreed to pay a civil monetary penalty of $9.2 million, and disgorgement and interest of approximately $3.8 million. As part of the settlement agreement, the company did not admit or deny the SEC’s findings of fact. As discussed in a previous FCPA Scorecard post, the DOJ announced in March 2016 that it is also investigating the company’s foreign sales practices. That investigation is ongoing. 

    Ongoing FCPA investigations can of course have costly business implications beyond reputational damage; the ongoing FCPA investigation of the company appears to have taken a toll, likely playing a role in the reduced price paid by a global healthcare company in April 2017 to acquire the company.

    Financial Crimes SEC FCPA

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  • Swedish Telecom Company to Pay $965 Million to DOJ and SEC to Settle Bribery Claims

    Financial Crimes

    On September 21, a Swedish telecom company agreed to pay $965 million as a result of criminal and civil actions brought by the DOJ and SEC charging the company with paying bribes to an Uzbek government official from 2007 to 2010. The company entered into a deferred prosecution agreement with the DOJ that required the company to pay a $548.6 million criminal penalty for violating the anti-bribery provisions of the FCPA, $274 million of which will be paid to the Swedish Prosecution Authority and credited by the DOJ. $40 million of the total criminal penalty consisted of forfeiture by the company on behalf of its indirect subsidiary. According to the criminal information, around 2007, the company began operating a mobile telecommunications business in Uzbekistan through the subsidiary, and the companies allegedly then conspired to make approximately $331 million in bribes to an Uzbek government official to expand their share of the telecommunications market. 

    On the same day, the SEC issued a cease-and-desist order finding that the company violated the anti-bribery and internal accounting controls provisions of the FCPA and ordering the company to disgorge $457 million in illicit profits (but also agreeing to credit up to half that amount if disgorged to the Swedish Prosecution Authority). The SEC found that over the relevant time period, the company “paid bribes to a government official in Uzbekistan in order to obtain and retain business that generated more than $2.5 billion in revenues.” It found that the company paid the Uzbek official $330 million in bribes “funneled through payments for sham lobbying and consulting services to a front company controlled by the official.” The SEC agreed that the $40 million forfeiture to the DOJ would also offset.

    Financial Crimes DOJ SEC Bribery FCPA

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  • Brazilian Petrochemical Company Reaches $10 Million Settlement With Investors

    Financial Crimes

    On September 14, a Brazilian petrochemical company, agreed to pay its U.S. investors $10 million for concealing its role in a corruption scandal involving a Brazilian multinational corporation in the petroleum industry. The settlement resolves a 2015 lawsuit brought by U.S. investors against the petrochemical company, which alleged the company had misled investors into believing its operations were legitimate. The settlement follows the December 2016 guilty plea by the company and its affiliated construction firm to violating the Foreign Corrupt Practices Act. Together, the companies agreed to pay $3.5 billion in a combined global settlement with U.S., Brazilian, and Swiss authorities.

    Financial Crimes FCPA Anti-Corruption Braskem SA Petrobras Brazil Switzerland

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  • SFO Director Urges Department to Compete With DOJ on Home Turf

    Financial Crimes

    In a September 4 speech, Serious Fraud Office (SFO) Director David Green urged the SFO to lead anti-corruption enforcement efforts against UK-connected companies, warning that “if we take our foot off the pedal . . . , others will fill the void.” Green noted that the DOJ “is not shy about enforcing the [FCPA] against foreign companies,” and emphasized that seven of the top ten highest-dollar FCPA cases since 2008 were brought against non-American companies. Green said that “it is surely right that the UK should lead enforcement in relation to UK companies or companies with strong connections here,” because it not only “demonstrates our commitment to the level playing field,” but it also “ensures that hefty financial penalties go to UK public coffers rather than elsewhere.”

    Financial Crimes UK Serious Fraud Office DOJ FCPA

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  • Report: California-Based Ride Sharing Company Facing DOJ Scrutiny

    Financial Crimes

    On August 29, the Wall Street Journal reported that a California-based ride sharing company is facing scrutiny from the DOJ, which has taken preliminary steps to investigate potential FCPA violations at the company. The company has expanded into more than 70 countries. A company spokesman confirmed the DOJ’s inquiry. The Wall Street Journal report stated that it was unclear whether DOJ would open a formal investigation.

    Financial Crimes FCPA DOJ

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  • Minnesota-Based Company Announces Closure of FCPA Investigations

    Financial Crimes

    On August 7, a Minnesota-based company announced in its Form 10-Q the closure of DOJ and SEC FCPA investigations related to gift, travel, entertainment, and other expenses incurred in connection with its Asia-Pacific operations. The company initially informed the DOJ and SEC about this matter in 2012 and thereafter provided the government periodic updates. According to the company’s 10-Q, the government’s investigations were closed “without further action taken by either [the SEC or DOJ].”

    Financial Crimes FCPA DOJ SEC

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  • Ohio-Based Corporation Discloses FCPA Investigation in Quarterly Filing

    Financial Crimes

    On August 4, Ohio-based corporation disclosed in its 10-Q that the DOJ and SEC are conducting investigations concerning potential violations of the FCPA related to a subsidiary’s operations in Turkey. The company operates in more than 70 countries and develops and sells technology-enabled solutions, including data warehouse management and database technologies. 

    According to the 10-Q, the company “discovered certain questionable expenditures for travel, gifts and other expenses at one of its international subsidiaries” doing business in Turkey. The company stated that it promptly launched an internal investigation and, in February 2017, self-disclosed the investigation to the SEC and DOJ. According to its 10-Q, the company has periodically updated the government about its investigation and plans to “continue to cooperate fully.” The company also noted that it already has “taken remedial actions,” including terminations, and that the FCPA issues “involved specific individuals who are no longer with the Company.” 

    It appears that the company is making a case for full cooperation credit under the DOJ’s Pilot Program, which encourages 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.”

    Financial Crimes FCPA DOJ SEC

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  • Three Companies Announce the Close of FCPA Investigations

    Financial Crimes

    During the week of July 24, 2017, three different companies announced the closure of DOJ and/or SEC FCPA investigations.

    In a Form 10-Q filed with the SEC on July 25, 2017, an American multinational technology company disclosed that the DOJ and SEC had each informed the company in June 2017 of the closure of their respective investigations into “alleged illegal activity by a former Poland employee in connection with sales to the Polish government.” The company initially informed the SEC in 2012 that the Polish Central Anti-Corruption Bureau was looking into the matter, and the DOJ followed up with its own investigation in April of 2013. The DOJ expanded the investigation from Poland to Argentina, Bangladesh, and Ukraine. The 2012 issues came on the heels of a 2011 settlement in which the company paid the SEC $10 million to settle separate FCPA allegations for alleged cash payments to Chinese and Korean officials.

    A South African alternative payment systems provider made a similar announcement on July 27, stating that the DOJ had written a letter to the company closing its investigation of alleged FCPA and disclosure violations. According to the announcement, the DOJ, along with the SEC and South African authorities, began looking into a 2012 contract award process involving a subsidiary of the company after an unsuccessful bidder for the same contract “refer[ed] unsubstantiated South African press articles to the DOJ.” The SEC was the first to bow out of the investigation, closing its inquiry through a letter in 2015, followed six months later by the South African government. The company is traded on NASDAQ’s Global Select Market, providing a jurisdictional hook into a case otherwise about payments made by a South African company in South Africa to South African citizens who were South African government employees. Our additional coverage of this matter can be viewed here.

    In a Form 10-Q filed on July 25, 2017, a mining company also announced the end of a DOJ investigation into alleged violations of the FCPA “relating to certain business activities of [the company] and its affiliates and contractors in countries outside the U.S.” According to the announcement, the Colorado company had already received a similar declination from the SEC earlier this year. Our additional coverage of this matter can be viewed here

    The DOJ simultaneously reportedly confirmed to the Wall Street Journal that the agency was still actively enforcing the FCPA. The Journal cited an anonymous source at the DOJ for assurances that “though there haven’t been any new corporate FCPA cases since mid-January, there is no letup in U.S. enforcement efforts.”

    Financial Crimes DOJ SEC FCPA

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