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DOJ FCPA Enforcement – 2018 Year In Review

Justice Dept

This previous post highlighted various corporate Foreign Corrupt Practices Act enforcement statistics from 2018 and this post goes in-depth into various facts and figures relevant to DOJ FCPA enforcement in 2018. (See here for a similar post from 2017, here for a similar post from 2016, here for a similar post from 2015, here for a similar post from 2014, here for a similar post from 2013, here for a similar post from 2012, here for a similar post from 2011, and here from 2010).

Settlement Amounts and Specifics

In 2018, the DOJ brought 8 corporate FCPA enforcement actions.

By comparison in 2017 the DOJ brought 9 corporate FCPA enforcement actions; in 2016 the DOJ brought 13 corporate FCPA enforcement actions; in 2015 the DOJ brought 2 corporate FCPA enforcement actions; in 2014 the DOJ brought 7 corporate FCPA enforcement actions; in 2013 the DOJ brought 7 corporate enforcement action; in 2012 the DOJ brought 9 corporate FCPA enforcement actions; in 2011 the DOJ brought 11 corporate enforcement actions; and in 2010 the DOJ brought 17 corporate enforcement actions.  (Note:  these figures  use the “core” approach to FCPA statistics – see here for the prior post – an approach also endorsed by the DOJ – see here).

In the 8 corporate FCPA enforcement actions from 2018, the DOJ collected approximately $618 million (Note: this figure represents net FCPA settlement amounts after accounting for various credits or deductions in certain enforcement actions for related foreign law enforcement actions).

By comparison, in the 8 corporate FCPA enforcement actions from 2017, the DOJ collected approximately $845 million; in the 13 corporate FCPA enforcement actions from 2016, the DOJ collected approximately $1.17 billion in criminal fines; in the 2 corporate FCPA enforcement actions from 2015, the DOJ collected approximately $24.2 million in criminal fines; in the 7 corporate FCPA enforcement actions from 2014, the DOJ collected approximately $1.25 billion in criminal fines;  in the 7 corporate FCPA enforcement actions from 2013, the DOJ collected approximately $420 million in criminal fines; in 2012, the DOJ collected approximately $142 million in criminal fines; in 2011, the DOJ collected approximately $355 million in criminal fines ($504 million including the $149 million forfeiture in the Jeffrey Tesler individual enforcement action); and in 2010, the DOJ collected approximately $870 million in criminal fines.

Corporate DOJ FCPA enforcement in 2018 ranged from $293 million (Societe Generale – net amount) to $94,000 (Insurance Corp. of Barbados).

Corporate v. Individual Prosecutions

In the 8 corporate DOJ enforcement actions in 2018, only 1 (12%) has resulted, at present, in related DOJ FCPA charges against company employees.

In 2018, the DOJ brought or announced individual FCPA charges against 13 individuals in 8 core actions. Stay tuned for future posts specifically about DOJ individual FCPA enforcement actions in 2018 and historically.

Resolution Vehicles

The 8 corporate FCPA enforcement actions by the DOJ in 2018 utilized a variety of resolution vehicles:

  • actual criminal charges and plea agreements (portions of the Societe Generale enforcement action)
  • deferred prosecution agreements (Panasonic, Transport Logistics Int’l, portions of the Societe Generale enforcement action);
  • non-prosecution agreement (Petrobras, Credit Suisse, Legg Mason); and
  • declinations with disgorgement (Polycom, Insurance Corp. of Barbados)

In total, 8 of the 8 corporate enforcement actions (100%) involved, in whole or in part, an NPA, DPA or declination with disgorgement.

By way of comparison, in 2017, 100% of DOJ corporate enforcement actions were resolved via an NPA, DPA or declination with disgorgement; in 2016 92% of DOJ corporate enforcement actions were resolved via an NPA, DPA or declination with disgorgement; in 2015 100% of DOJ corporate enforcement actions were resolved via an NPA or DPA; in 2014 71% of DOJ corporate enforcement actions included an NPA or DPA; in 2013, 100% of corporate DOJ enforcement actions involved either an NPA or DPA; in 2012 100% of corporate DOJ enforcement actions involved either an NPA or a DPA;  in 2011 82% of corporate DOJ enforcement actions involved either an NPA or DPA; and in 2010 94% of corporate DOJ enforcement actions involved either an NPA or DPA.

Voluntary Disclosures

Of the 8 DOJ corporate enforcement actions in 2018, 2 enforcement actions (25%) were the result of a voluntary disclosure.

By way of comparison, in 2017 33% of DOJ corporate enforcement actions were the result of a voluntary disclosure; in 2016 38% of DOJ corporate enforcement actions were the result of a voluntary disclosure; in 2015, 50% of corporate FCPA enforcement actions were the result of a voluntary disclosure; in 2014, 29% of corporate FCPA enforcement actions were the result of a voluntary disclosures; in 2013, 57% of corporate FCPA enforcement actions were the result of a voluntary disclosure or the direct result of a related voluntary disclosure; in 2012, 78% of corporate FCPA enforcement actions were the result of a voluntary disclosure or casually related to previous voluntary disclosures; in 2011, 73% of corporate FCPA enforcement actions were the result of corporate voluntary disclosures.

Monitors

Of the 8 corporate DOJ FCPA enforcement actions in 2018, 1 (12%) resulted in a formal corporate monitor imposed by the DOJ.

(Note: not included in this figure is the Petrobras enforcement action. As stated in the DOJ NPA – Petrobras “will be subject to oversight by Brazilian authorities, including Brazil’s Tribunal de Contas da Uniao and Comissao de Valores Mobiliarios, the Fraud Section and the Office determined that an independent compliance monitor was unnecessary.”).

By way of comparison, 33% of DOJ corporate FCPA enforcement actions in 2017 resulted in a formal corporate monitor; in 2016 54% of DOJ corporate FCPA enforcement actions resulted in a formal corporate monitor; in 2015 50% of enforcement actions resulted in a corporate monitor; in 2014 14% of enforcement actions resulted in a corporate monitor; in 2013 57% of enforcement actions resulted in a corporate monitor; in 2012 33% of enforcement actions resulted in a corporate monitor; in 2011 9% of enforcement actions resulted in a corporate monitor; and in 2010 41% of enforcement actions resulted in a corporate monitor.

This remainder of this post provides an overview of corporate DOJ FCPA enforcement in 2018.

Polycom (Dec. 20th)

See here for the prior post

Charges: None, reference is made to “bribery committed by employees of the Company’s subsidiaries in China, and these subsidiaries’ knowing and willful causing of false books and records at Polycom.”

Resolution Vehicle: So-called declination with disgorgement

Guidelines Range: Not mentioned in the letter agreement

Settlement: $20.3 million.

Origin: Voluntary disclosure

Monitor: No

Individuals Charged by DOJ: No

Petrobras (Sept. 27th)

See here and here for prior posts

Charges: None, although the non-prosecution agreement refers to the FCPA’s books and records and internal controls provisions

Resolution Vehicle: NPA

Guidelines Range: The NPA does not contain a specific guidelines calculation, but generally refers “to 25% off of the bottom of the U.S. Sentencing Guidelines fine range”

Settlement Amount: $85.3 million after accounting for credits and deductions for related enforcement actions

Origin: Foreign law enforcement investigation

Monitor: By the DOJ no – the NPA states Petrobras “will be subject to oversight by Brazilian authorities, including Brazil’s Tribunal de Contas da Uniao and Comissao de Valores Mobiliarios, the Fraud Section and the Office determined that an independent compliance monitor was unnecessary.”

Individuals Charged by the DOJ: No

  Insurance Corporation of Barbados (August 23rd)

See here for the prior post

Charges: None

Resolution Vehicle: “Declination with Disgorgement”

Guidelines Range: Not set forth in the letter agreement

Settlement Amount: Approximately $94,000

Origin: Voluntary disclosure

Monitor: No

Individuals Charged by the DOJ: No

  Credit Suisse (July 5th)

See here and here for prior posts

Charges: None

Resolution Vehicle: NPA

Guidelines Range: The NPA does not contain a specific guidelines calculation, but generally refers to “a discount of 15% off of the bottom of the U.S. Sentencing Guidelines fine range”

Settlement Amount: $47 million

Origin: Likely an industry sweep connected to JPMorgan’s FCPA scrutiny

Monitor: No

Individuals Charged by the DOJ: No

Panasonic Avionics (April 30th)

See herehere and here for prior posts

Charges: knowing and willful violations of the FCPA’s books and records provisions

Resolution Vehicle: Criminal information resolved through a deferred prosecution agreement

Guidelines Range: $172 million – $344 million

Penalty: $137.4 million

Origin: Pro-active government investigation and subpoena

Monitor: Yes

Individuals Charged: No

 Societe Generale (June 4th)

See herehere and here for prior posts

Charges: SGA Société Générale Acceptance N.V. (“SGA”) conspiracy to violate the FCPA’s anti-bribery provisions; Société Générale S.A. (SoGen) conspiracy to violate the FCPA’s anti-bribery provisions

Resolution Vehicle: As to SGA, criminal information resolved through a plea agreement; as to SoGen criminal information resolved through a deferred prosecution agreement

Guidelines Range: $731.9 million to $1.46 billion

Penalty: $$585 million to be offset by $293 million for related French enforcement action based on the same conduct (net FCPA settlement amount equals $293 million).

Origin: Pro-active government investigation and subpoena

Monitor: No

Individuals Charged: No

 Legg Mason (June 4th)

See here and here for prior posts

Charges: Although the non-prosecution agreement technically does not charge anything, it makes generic reference to “corrupt payments, false books and records, failure to implement adequate internal accounting controls, and circumvention of internal controls.”

Resolution Vehicle: NPA

Guidelines Range: Not mentioned in the NPA, however the NPA mentions a “discount of 25% off of the bottom of U.S. Sentencing Guidelines fine range.”

Penalty: The NPA states: “The Company agrees to pay a monetary penalty in the amount of $32,625,000.00 to the United States Treasury no later than five business days after the Agreement is fully executed, and to pay $31,617,891.90 in disgorgement of profits no later than one year after the Agreement is fully executed. […] The Offices will credit any disgorgement paid by the Company to another law enforcement authority in connection with the resolution of this matter, so long as such disgorgement is paid within one year of the execution of this Agreement.” In connection with the DOJ action, Legg Mason disclosed: “Legg Mason expects to resolve its case with the U.S. Securities and Exchange Commission for this same matter shortly.” Thus, the $31,617,891.90 referenced in the DOJ action is a “placeholder” for the SEC action and the net DOJ settlement amount is $32.6 million.

Origin: Pro-active government investigation and subpoena

Monitor: No

Individuals Charged: No

Transport Logistics Int’l (March 13th)

See here for the prior post

Charges: Conspiracy to violate the FCPA’s anti-bribery provisions

Resolution Vehicle: Criminal information resolved through a deferred prosecution agreement

Guidelines Range: $28.5 million to $57 million

Penalty: $21.4 million reduced to $2 million based on inability to pay

Origin: Unclear from the resolution documents

Monitor: No.

Individuals Charged: Yes

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