Restitution
As highlighted in this prior post, in connection with the May 2022 Glencore FCPA enforcement action, the majority owners of Crusader Health (Ian and Laureth Hagen) petitioned the court in the underlying enforcement action to file a restitution claim under the Mandatory Victims Restitution Act (MVRA) and the Crime Victims Act on the basis that the entity was a victim of Glencore’s conduct in the Democratic Republic of Congo. The court granted the petition.
As highlighted in this prior post, Glencore acknowledged “that Crusader—and by extension, the Hagens—was harmed by the offense to which Glencore has pled guilty, and it is prepared to pay restitution in the amount of any loss directly and proximately caused by that offense.” However, Glencore disputed the amount of restitution properly owed.
Recently, the court awarded Crusader restitution of approximately $29.7 million (an amount less than the approximate $48.4 – $50.3 million Crusader sought). See U.S. v. Glencore International 2023 WL 2242469.
Previous posts here and here discussed the $15 million FCPA enforcement action against Rio Tinto and the $4 million FCPA enforcement action against Flutter International.
This post highlights additional issues to consider.
Interesting
While one would like to think that FCPA enforcement actions “just happen” when they are ready to happen, certain FCPA enforcement actions are seemingly timed to coincide with a company’s reporting cycle, government enforcement “marketing,” or other issues.
Separate FCPA enforcement actions announced on the same day are rare.
In 2021, the DOJ announced that Frederick Cushmore Jr. (an individual employed by Corsa Coal in various international sales positions) was criminally charged and plead guilty to a conspiracy charge to violate the FCPA’s anti-bribery provisions in connection with a bribery scheme in Egypt. (See here for the prior post).
In 2022, the DOJ announced that Charles Hunter Hobson (an individual employed by Corsa Coal in a variety of roles) was also criminally charged in connection with the same core conduct. (See here for the prior post). The enforcement action against Hobson remains active with the next status conference scheduled for April 3rd.
Recently, the DOJ posted this “declination with disgorgement” letter to Corsa Coal’s counsel on its FCPA website.
Recently Deputy Attorney General Lisa Monaco delivered this speech at the American Bar Association National Institute on White Collar Crime.
Topics discussed included: “inspiring a culture of compliance,” “promoting compliance through compensation and clawback programs,” and “accountability.”
Monaco began her speech as follows:
FCPA Professor has been described as “the Wall Street Journal concerning all things FCPA-related,” and “the most authoritative source for those seeking to understand and apply the FCPA.”
Set forth below are the topics discussed this week on FCPA Professor.
Assistant Attorney General Kenneth Polite called prosecutors “community problem-solvers” and announced yet additional changes to DOJ policy. See here.
In April 2022, Roger Ng (a former Goldman Sachs managing director) was found guilty at trial of Foreign Corrupt Practices Act and related charges for paying bribes to various Malaysian and Abu Dhabi officials in connection with Malaysia’s state-owned and state-controlled investment development company. See here.
As highlighted in this recent post, Ng sought a “time served” sentence while detailing his “tremendous suffering, all of it imposed by the U.S. government” over the last 4.5 years.
As highlighted in this recent post, the DOJ sought a 15 year sentence for Ng.
Yesterday, Judge Margo Brodie (E.D.N.Y.) sentenced Ng to 10 years in prison. (See here for the DOJ release). The ten year sentence for FCPA (and related crimes) is among the longest in FCPA history.
This recent post about the Rio Tinto FCPA enforcement action posed the lingering question of whether FCPA enforcement is a convenient cash cow for the U.S. government. After all, when several former FCPA enforcement officials suggest as much, what are the rest of us supposed to think?
After all, in the Rio Tinto matter the U.S. extracted $15 million from a company (with headquarters in Australia and the United Kingdom) after the SEC found that the company hired a French investment banker and close friend of a former senior Guinean government official as a consultant to help the company retain mining rights in Guinea. Even though both Australia and the United Kingdom have laws and law enforcement resources to adequately address the conduct at issue, the SEC nevertheless got involved because the company had American Depository Shares that traded on a U.S. exchange.
Earlier this week (and on the same day as the Rio Tinto matter was announced), the SEC also announced a $4 million FCPA enforcement action against Flutter International (a company headquartered in Ireland) – the successor in interest to The Stars Group (a company that was headquartered in Canada) – based on the finding that the “Company paid approximately $8.9 million to consultants in Russia in support of the Company’s operations and its efforts to have poker legalized in that country.” Even though both Ireland and Canada have laws and law enforcement resources to adequately address the conduct at issue, the SEC nevertheless got involved because The Stars Group at one time had shares traded on a U.S. exchange.
As highlighted in this recent post, former Goldman Sachs managing director Roger Ng (found guilty at trial in 2022 of FCPA and related charges for paying bribes to various Malaysian and Abu Dhabi officials in connection with Malaysia’s state-owned and state-controlled investment development company) is seeking a “time served” sentence.
Sentencing is set for later this week and Judge Margo Brodie (E.D.N.Y.) will have quite the range to ponder as the DOJ is seeking a 15 year sentence for Ng.
A recent sentencing submission states in summary fashion:
In the minds of some (including former FCPA enforcement officials – see here), Foreign Corrupt Practices Act enforcement is a convenient cash cow for the U.S. government.
Those who believe this will find new support in the first corporate FCPA enforcement action of 2023.
The basic findings are as follows.
Approximately 12 years ago, Rio Tinto (a metal and mining company with headquarters in Australia and the United Kingdom) hired a French investment banker and close friend of a former senior Guinean government official as a consultant to help the company retain mining rights in Guinea.
Even though both Australia and the United Kingdom have laws and law enforcement resources to adequately address the conduct at issue, the U.S. nevertheless extracted $15 million from Rio Tinto because the company had American Depository Shares that traded on a U.S. exchange.
Last week, Kenneth Polite (DOJ Assistant Attorney General -Criminal Division) gave this speech in which he called prosecutors “community problem-solvers” and announced (yet additional) changes to DOJ policy.
Specifically, Polite announced “significant changes” to how the DOJ “consider[s] a corporation’s approach to the use of personal devices as well as various communications platforms and messaging applications, including those offering ephemeral messaging.”
In addition, Polite described how the DOJ has “updated its policies concerning corporate compensation systems” and issued a “revised memorandum on the selection of monitors in Criminal Division matters” including that “any submission of a monitor candidate by the company and selection of a monitor candidate by the Criminal Division should be made in keeping with the department’s commitment to diversity, equity, and inclusion.”
This prior post covered the 2019 Foreign Corrupt Practices Act enforcement action against Ericsson.
The enforcement action concerned conduct in Djibouti, China, Vietnam, Kuwait, Indonesia, and Saudi Arabia and included a DOJ and SEC component. The DOJ matter involved a one count criminal information against Ericsson subsidiary Ericsson Egypt Ltd. charging conspiracy to violate the FCPA’s anti-bribery provisions resolved through a plea agreement and a criminal information against Ericsson charging conspiracies to violate the FCPA’s anti-bribery, books and records, and internal controls provisions resolved through a deferred prosecution agreement. The DOJ matter was resolved through payment of a $520 million criminal penalty.
As highlighted in this prior post, in 2021 the DOJ accused Ericsson of breaching its DPA obligations.
As highlighted in prior posts here and here, in January the DOJ Criminal Division released a Corporate Enforcement and Voluntary Self-Disclosure Policy which “applies to all FCPA cases nationwide and all other corporate criminal matters handled by the Criminal Division.”
As discussed below, the DOJ’s expectation regarding voluntary disclosure is absurd as well as internally inconsistent.
As to the later point, query whether the DOJ has individuals capable of proof-reading to ensure that a policy document is internally consistent.