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Former Herbalife China Executives Criminally Charged By DOJ, SEC Also Charges Former Executive

herbalife

In 2014, Avon resolved a Foreign Corrupt Practices Act enforcement based in large part on obtaining a direct selling permit in China. (See here for the prior post).

In 2016, Nu Skin Enterprises resolved an FCPA enforcement action based in large part on obtaining a direct selling permit in China. (See here for the prior post).

In 2017, Herbalife disclosed that it was under FCPA scrutiny concerning its conduct in China. With the company’s scrutiny still pending, yesterday the DOJ announced that Yanliang Li (a citizen of China and former Managing Director of a Chinese division of Herbalife) and Hongwei Yang (a citizen of China and former head the External Affairs Department of a Chinese division of Herbalife) were criminally charged “for their roles in a scheme to violate the anti-bribery and the internal controls provisions of the FCPA.” Not surprisingly, the alleged conduct focused on obtaining a direct selling permit.

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Westport Fuel Systems Resolves $4 Million FCPA Enforcement Action Based On Transfer Of Shares To A Private Equity Fund In Which A Chinese Official Held An Interest – Former CEO Also Resolves Action

Westport

In the third corporate Foreign Corrupt Practices Act is less than 24 hours, the SEC announced this afternoon that Westport Fuel Systems (a Canadian company with shares traded on NASDAQ) agreed to pay approximately $4 million for “paying bribes to a foreign government official in China.”

In addition, in connection with the same core conduct, Nancy Gougarty (a U.S. citizen who previously served as Chief Operating Officer and from mid-2016 until early 2019 as the CEO and member of the board of directors) agreed to pay a $120,000 civil penalty.

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The Case That Just Keeps On Giving – DOJ Announces Additional Charges In PDVSA Bribery Action Against Employees Of Swiss Wealth Management Firm – Previously Charged FCPA Defendant Files Motion To Dismiss

PDVSA

Several prior posts (see hereherehere and here for instance) have highlighted the clustering phenomenon and how a few discreet instances of alleged bribery yield an inordinate amount of Foreign Corrupt Practices Act enforcement activity against individuals.

One such example is the DOJ’s long-standing enforcement action (charges were first brought in late 2015) in connection with alleged corrupt schemes to secure contracts from Venezuela’s state-owned and state-controlled energy company, PDVSA.

In this recently unsealed indictment, Nervis Villalobos Cardenas (a citizen of Venezuela), Daisy Rafoi Bleuler (a citizen of Switzerland and partner in a Swiss Wealth Management firm), and Paulo Caqueiro Murta (a citizen of Portugal and Switzerland and employee in a Swiss Management firm) were charged with conspiracy to violate the FCPA’s anti-bribery provisions as well as other offenses. In the indictment, various former employees of PDVSA entities (alleged to be “foreign officials”) were also charged with money laundering offenses. As highlighted in this prior post, Villalobos was previously charged with FCPA and related offenses in early 2018.

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SEC Brings Another Enforcement Action Against A Former Cognizant Executive

Thiruvengadam

Approximately 90% of SEC corporate FCPA enforcement actions in recent years have lacked any related charges against company employees.

A bit unusual then that the February 2019 enforcement action against Cognizant Technology Solutions (see here) has resulted in not one, not two, but three individual enforcement actions as last Friday the SEC announced an administrative action against Sridhar Thiruvengadam (pictured – an Indian national and resident who previously served as Cognizant’s Chief Operating Officer).

Unlike the two prior individuals charged by the SEC and DOJ (Gordon Coburn and Steven Schwartz) who appear to be putting the government to its burden of proof, Thiruvengadam, without admitting or denying the SEC’s findings, agreed to pay a $50,000 civil penalty in an enforcement action that lacked any U.S. jurisdictional allegation other than that Thiruvengadam participated in a video conference from India with certain executives who participated in the video conference from the U.S.

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Individual Pleads Guilty To FCPA And Related Offenses In Connection With Uganda Adoption Scheme

UgandaAdoption

In a fact pattern believed to be a first in Foreign Corrupt Practices Act history, last week the DOJ announced that Robin Longoria (an individual who managed aspects of an international program at an Ohio-based adoption agency) pleaded guilty to one count of conspiring to violate the FCPA’s anti-bribery provisions and to commit wire fraud and visa fraud “for her role in a scheme to corruptly facilitate adoptions of Ugandan children through bribing Ugandan officials and defrauding U.S. adoptive parents and the U.S. Department of State.”

According to this media report, the adoption agency is now defunct European Adoption Consultants.

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