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A Focus On DOJ Individual Actions

Criminal Law

This recent post focused on SEC individual FCPA actions and this post highlights certain facts and figures concerning the DOJ’s prosecution of individuals for Foreign Corrupt Practices Act offenses in 2016 and historically.

As highlighted numerous times on FCPA Professor over the past several years, the DOJ frequently talks about the importance of individual FCPA prosecutions. During her tenure, Assistant Attorney General Leslie Caldwell (she recently left the DOJ) has stated that “certainly…there has been an increased emphasis on, let’s get some individuals” and that it is “very important for [the DOJ] to hold accountable individuals who engage in criminal misconduct in white-collar (cases), as we do in every other kind of crime.”

During his tenure DOJ FCPA Unit Chief Patrick Stokes (he recently left the DOJ) has said that the DOJ is “very focused” on prosecuting individuals as well as companies and that “going after one or the other is not sufficient for deterrence purposes.”

Against this backdrop, what do the facts actually show?

Since 2000, the DOJ has charged 150 individuals with FCPA criminal offenses.  The breakdown is as follows.

  • 2000 – 0 individuals
  • 2001 – 8 individuals
  • 2002 – 4 individuals
  • 2003 – 4 individuals
  • 2004 – 2 individuals
  • 2005 – 3 individuals
  • 2006 – 6 individuals
  • 2007 – 7 individuals
  • 2008 – 14 individuals
  • 2009 – 18 individuals
  • 2010 – 33 individuals (including 22 in the Africa Sting case)
  • 2011 – 10 individuals
  • 2012 – 2 individuals
  • 2013 – 12 individuals
  • 2014 – 10 individuals
  • 2015 – 8 individuals
  • 2016 – 8 individuals

An analysis of the numbers reveals some interesting points.

Most of the individuals – 129 (or 86%) were charged since 2006.  Thus, on one level the DOJ is correct when it states that there has been an “increased emphasis” on individual prosecutions – at least as measured against the historical average given that between 1978 and 1999, the DOJ charged 38 individuals with FCPA criminal offenses.

Yet on another level, a more meaningful level given that there was much less overall enforcement of the FCPA between 1978 and 1999, the DOJ’s statements about its focus on individuals represents hollow rhetoric as demonstrated by the below figures.

Of the 129 individuals criminally charged with FCPA offenses by the DOJ since 2006:

  • 22 individuals were in the failed (and manufactured) Africa Sting case;
  • 9 individuals (minus the “foreign officials” charged) were in the Haiti Teleco case;
  • 8 individuals were in connection with the Control Components case;
  • 8 individuals were in connection with the Siemens case;
  • 5 individuals were associated with DF Group in the Indian mining licenses case;
  • 5 individuals were associated with Direct Access Partners;
  • 4 individuals were in connection with the Lindsey Manufacturing case;
  • 4 individuals were  in connection with the LatinNode / Hondutel case;
  • 4 individuals were in connection with the Nexus Technologies case;
  • 4 individuals were in connection with the BizJet case;
  • 4 individuals were in connection with the Alstom case; and
  • 4 individuals were associated with Hunt Pan Am Airlines.

In other words, 44% of the individuals charged by the DOJ with FCPA criminal offenses since 2006 have been in just six cases and 63% of the individuals charged by the DOJ since 2006 have been in just twelve cases.  This was previously highlighted as the clustering phenomenon of DOJ individual FCPA actions.

Considering that there has been 94 corporate DOJ FCPA enforcement actions since 2006, this is a rather remarkable statistic.  Of the 94 corporate DOJ FCPA enforcement actions, 73 (or 77%) have not (at least yet) resulted in any DOJ charges against company employees.

Compare this figure to FCPA enforcement prior to 2004.

As highlighted in this prior post, from 1977 to 2004 approximately 90% of DOJ criminal corporate FCPA enforcement actions RESULTED in related charges against company employees.

Why the change?

Read the recent article “Measuring the Impact of NPAs and DPAs on FCPA Enforcement” in which a hypothesis is tested as well as to see comprehensive charts detailing every DOJ corporate FCPA enforcement and whether the action also resulted in related charges against company employees.

In short, and as demonstrated by the statistics, DOJ FCPA individual enforcement actions are significantly skewed by a small handful of enforcement actions and the reality is that 77% of DOJ corporate enforcement actions since 2006 have not (at least yet) resulted in any DOJ charges against company employees.

Indeed, as highlighted in this prior post, Yates individual accountability rhetoric aside, none of the 13 corporate DOJ FCPA enforcement actions from 2016 involved (at least yet) related DOJ criminal charges against company employees.

Stay Informed About FCPA Current Events

This approximate two hour engaging video tutorial provides a summary of all 2016 corporate FCPA enforcement actions and enforcement agency policy developments; various issues to consider; and compliance take-away points.

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