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Friday Roundup

Roundup

DOJ’s year in review, ripple, scrutiny alerts and updates, simply false, and amusing. It’s all here in the Friday roundup.

DOJ’s Year In Review

The DOJ Fraud Section recently released its year in review. According to the document, “the FCPA Unit has 32 prosecutors.” When reviewing the statistics in the document keep in mind that the FCPA Unit “investigates and prosecutes cases under the FCPA and related statutes.” In other words, the statistics include non-FCPA matters such as when the DOJ charges or prosecutes alleged “foreign officials” for money laundering and related offenses.

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Friday Roundup

Roundup

Guilty plea, Petrobras civil settlement, Alstom is done reporting, scrutiny alert, SEC FCPA enforcement, from the docket, checking in up north, and for the reading stack. It’s all here in the Friday roundup.

Guilty Plea

As highlighted in this prior post, in January 2017 the DOJ announced an FCPA and related enforcement action against four individuals for their roles in a scheme to pay $2.5 million in bribes to facilitate the $800 million sale of a commercial building in Vietnam (the so-called Landmark 72) to a Middle Eastern sovereign wealth fund.

Today, the DOJ announced: “Joo Hyun Bahn, aka Dennis Bahn, 39, of Tenafly, New Jersey, pleaded guilty in federal court in Manhattan to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and one count of violating the FCPA.  U.S. District Judge Edgardo Ramos of the Southern District of New York accepted the guilty plea.  Sentencing is scheduled for June 29 …”.

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Plaintiffs Allege Harm At The Hands Of Terrorist Group Funded In Part By Corrupt Sales Practices Of Various Multinational Companies

Mahdi Army

Various courts have held that the Foreign Corrupt Practices Act does not confer a private right of action. However, as highlighted in “FCPA Ripples” and several other posts on this website, private plaintiffs with increasing frequency are using allegations of corruption to allege other substantive causes of action in what amounts to “offensive use” of the FCPA and related topics.

Recently, American service members and civilians and their families who were killed or wounded while serving in Iraq filed this 203 page civil complaint against AstraZeneca, General Electric, Johnson & Johnson, Pfizer and Roche claiming that the companies’ alleged acts of corruption in Iraq present viable civil claims under the federal Anti-Terrorism Act and for intentional infliction of emotional distress. Specifically, the plaintiffs allege that they or their family members were attacked by a terrorist group (Jaysh al-Mahdi) funded in part by the defendants’ corrupt sales practices.

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Bio-Rad Appeals Approximate $11 Million FCPA-Related Civil Verdict In Favor Of Its Former General Counsel

Bio-Rad

As highlighted in this previous post, in November 2014 Bio-Rad agreed to pay $55 million to resolve a parallel DOJ and SEC FCPA enforcement action based on alleged conduct in Russia, Thailand and Vietnam.

As highlighted in this previous post, in May 2015 Sanford Wadler, the former General Counsel and Secretary of Bio-Lab Laboratories, filed a civil complaint against the company and certain executive officers and board members alleging various unfair employment practices including that Wadler was terminated for blowing the whistle on certain potential FCPA issues.

As highlighted in this previous post, Wadler’s claims were fully litigated and in February 2017 a jury awarded Wadler $2.9 million in back pay and stock compensation and $5 million for punitive damages. The district court doubled the compensatory award pursuant to Dodd-Frank for a total award of approximately $11 million.

Recently Bio-Rad filed this appeal in the Ninth Circuit challenging various aspects of the trial court decision.

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From The Dockets

Judicial Decision

As highlighted in this previous post, Misonix has been under FCPA scrutiny since September 2016 and in March 2017 Cicel (Beijing) Science & Technology Co. Ltd. brought a variety of civil claims against Misonix concerning its business relationship with the company.

Among the claims brought by Cicel was a breach of contract claim. Misonix acknowledged that it terminated the contract, but argued that it “was justified in doing so because of Misonix’s FCPA investigation” regarding Cicel. In response, Cicel claimed that the investigation “was a ruse for breaching the contract.” Recently, U.S. District Court Judge Arthur Spatt (E.D.N.Y.) allowed Cicel’s claim to proceed beyond the motion to dismiss stage. (See 2017 WL 4535933).

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