DOJ / SEC Announce Net $1.66 Billion (The Largest Of All-Time) FCPA Enforcement Action Against Goldman Sachs In Connection With 1MDB Fund
As highlighted in this prior post, in November 2018 the DOJ announced criminal charges against former Goldman Sachs employees Roger Ng and Tim Leissner, and Low Taek Jho (Jho Low – an individual “known to be close to various high-ranking officials in Malaysia and Abu Dhabi” who “worked as an intermediary in related to 1MDB and other foreign government officials on numerous financial transactions and projects involving Goldman and others) for paying bribes to various Malaysian and Abu Dhabi officials in connection with 1Malaysia Development Berhad (1MDB), Malaysia’s state-owned and state-controlled investment development company.
This prior post asked: what does this mean for Goldman Sachs?
We now know the answer as the DOJ and SEC announced (here and here) a net $1.66 billion FCPA enforcement action against Goldman Sachs and a related entity. This represents the largest FCPA enforcement action of all-time (see here for the prior top ten list).
Brazilian Company Bribes Brazilian Officials, U.S. Collects Net $155 Million In FCPA Enforcement Action
This recent post posed the question of whether “foreign” in the FCPA’s “foreign official” element means as it relates to the U.S. or as it relates to the specific company at issue. The post highlighted how in recent years the FCPA enforcement agencies have adopted the former interpretation in bringing FCPA enforcement actions against foreign companies for allegedly bribing their own “domestic” officials – but “foreign” as it relates to the U.S.
In yet another example, the DOJ and SEC announced yesterday (see here and here) that J&F Investimentos S.A. (J&F a private investment holding company based in Brazil that owns approximately 250 companies primarily involved in the meat and agriculture business) and a related entity resolved a net $155 million FCPA enforcement action for allegedly bribing Brazilian officials.
The enforcement action involved a: (i) DOJ component against J&F resolved through a plea agreement in which the company paid net $128.2 million; and (ii) an SEC component against J&F, a related entity, and two individuals in which the related entity paid approximately $26.8 million and the two individuals each paid a $550,000 civil penalty.
Individual Enforcement Actions In Connection With Sargeant Marine Matter Span Several Years
[Just when you think 2020 can’t get any more strange, there were no SEC FCPA enforcement actions during the final days of September. Why is this strange? Because as highlighted in this prior post, approximately 15% of SEC FCPA enforcement actions in recent years have occurred during the last week of September. This was the first year since 2014 that there was not an SEC FCPA enforcement action in the final days prior to the SEC’s fiscal year ending on September 30th. COVID-19 related? Perhaps, but through three quarters thus far in 2020 FCPA enforcement has been generally consistent with prior years numbers].
Prior posts here and here highlighted the DOJ’s recent Foreign Corrupt Practices Act enforcement action against Sargeant Marine (SMI) in connection with bribery schemes in Brazil, Venezuela, and Ecuador.
This post highlights the related individual actions against seven individuals (five individuals for FCPA offenses and two alleged foreign officials for money laundering). What is interesting is that there were no individual charges in connection with the Ecuador conduct alleged in the SMI enforcement action and that the individual action began in September 2017 – a full three years prior to the SMI enforcement action.
Sargeant Marine Cements $16.6 FCPA Resolution With DOJ Regarding Bribery Schemes In Brazil, Venezuela, And Ecuador
Earlier this week, the DOJ announced that Sargeant Marine Inc. (SMI – an asphalt company based in Florida) “pleaded guilty and agreed to pay $16.6 million to resolve foreign bribery charges stemming from conduct by the company and its employees and agents in Brazil, Venezuela and Ecuador.”
The total criminal penalty was actually $90 million, but because of SMI’s “inability to pay” the settlement amount was only $16.6 million.
DOJ Announces Indictment Of Oil Trader In Connection With Alleged Ecuador Bribery Scheme
Yesterday, the DOJ announced that Javier Aguilar (described as a trader at the U.S. subsidiary of a multinational oil distributor and trading company – “Trading Company) was criminally charged for “his alleged participation in a five-year international bribery and money laundering scheme involving corrupt payments to Ecuadorian officials.” According to this report, Aguilar’s former employer is Vitol Inc. As highlighted in this previous post, Vitol has reportedly been under scrutiny.
Although not mentioned in the indictment, the DOJ releases references an “original complaint” and that the Ecuadorian officials included individuals associated with PetroEcuador (a business organization previously mentioned in FCPA enforcement actions – see here and here).