Category: FCPA Statistics

A Summary Of FCPA Enforcement Statistics

FCPA Professor has been the place to visit this month for in-depth 2015 Foreign Corrupt Practices Act enforcement statistics as well as comparisons to historical statistics.

If you missed the daily posts, no worries.

This post consolidates in one place the statistics published on FCPA Professor in January.

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This post highlights various facts and figures from 2015 SEC FCPA enforcement. The post breaks down the statistics into specific categories such as settlement amounts, settlement specifics, and voluntary disclosures as well as provides a comparison to historical statistics.

This post highlights various facts and figures from 2015 DOJ FCPA enforcement. The post breaks down the statistics into specific categories such as settlement amounts, settlement specifics, voluntary disclosures, and monitors as well as provides a comparison to historical statistics.

This post compares 2015 corporate FCPA enforcement to prior years and highlights how overall corporate FCPA enforcement in 2015 was up slightly compared to 2014 and 2013 corporate enforcement even though DOJ corporate FCPA enforcement in 2015 was at its lowest level since 2006 and even though overall FCPA settlement amounts were well below historical averages.

This post highlights the alleged “foreign officials” from 2015 corporate DOJ and SEC FCPA enforcement actions. Similar to prior years,  the majority of corporate enforcement actions involved, in whole or in part, employees of alleged state-owned or state-controlled entities. In 2015, these entities ranged from health care providers, to sovereign wealth funds, to a real estate development firm, a sugar factory, a cement company, a diamond mine, and an oil and gas company.

This post focuses on individual FCPA enforcement actions by the SEC and highlights the key fact, that despite SEC rhetoric about the importance of individual enforcement actions, of the 81 corporate SEC FCPA enforcement actions since 2008, 67 (or 83%) have not (at least yet) resulted in any SEC charges against company employees.

This post contains the same analysis regarding individual FCPA enforcement actions by the DOJ and likewise highlights the key fact, that despite DOJ rhetoric about the importance of individual enforcement actions, of the 69 corporate DOJ FCPA enforcement actions, 50 (or 72%) have not (at least yet) resulted in any DOJ charges against company employees. Moreover, DOJ individual FCPA actions exhibit a clustering phenomenon in that 53% of the individuals charged by the DOJ with FCPA criminal offenses since 2008 have been in just six cases and 72% of the individuals charged by the DOJ since 2008 have been in just eleven cases.

Further to the analysis of DOJ individual actions, as highlighted in this post there is a sharp public – private divide.  In short, of the 107 individuals charged by the DOJ with FCPA criminal offenses since 2008, 82 of the individuals (77%) were employees or otherwise affiliated with private business organizations.  This is a striking statistic given that 53 of the 69 corporate DOJ FCPA enforcement actions since 2008 (79%) were against publicly traded corporations.

DOJ Individual Actions: The Strange Public – Private Divide

This recent post highlighted certain facts and figures regarding the DOJ’s prosecution of individuals for FCPA offenses in 2015 and historically.

As highlighted in the prior post, DOJ FCPA individual enforcement actions are significantly skewed by a small handful of enforcement actions and the reality is, despite the DOJ’s rhetoric, that 72% of DOJ corporate enforcement actions since 2008 have not (at least yet) resulted in any DOJ charges against company employees.

Another very interesting and significant picture emerges when analyzing DOJ individual FCPA prosecutions based on whether the individual charged was employed by or otherwise associated with a publicly traded corporation or a private business organization.

Of the 107 individuals charged by the DOJ with FCPA criminal offenses since 2008, 82 of the individuals (77%) were employees or otherwise affiliated with private business organizations.  This is a striking statistic given that 53 of the 69 corporate DOJ FCPA enforcement actions since 2008 (79%) were against publicly traded corporations.

In the 16 private business organization DOJ FCPA enforcement actions since 2008, individuals were charged in connection with 9 of those actions (56%).  In contrast, in the 53 publicly traded corporation DOJ FCPA enforcement actions since 2008, individuals were charged in connection with 10 of those cases (19%). Indeed, since 2012 there have been only three instances of an individual associated with a publicly traded company being criminally charged with FCPA violations (Garth Peterson, Alain Riedo and Vicente Garcia).

In short, a DOJ FCPA enforcement against a private business organization is approximately three times more likely to have a related DOJ FCPA criminal prosecution of an individual than a DOJ FCPA enforcement action against a publicly traded corporation.

The below information highlights all individuals criminally charged with FCPA violations since 2008 and whether they were associated with a publicly traded company or private business organization.

Individuals Charged With FCPA Criminal Offenses Since 2008 (Employer / Affiliation)

Bold = employed or affiliated with a private business entity

Gerald Green, Patricia Green (owners / operators of several private companies)

Martin Eric Self (employees of Pacific Consolidated Industries LP – a private business entity)

Shu Quan Sheng (owner of AMAC International Inc., but acting on behalf of French Company A – a publicly traded corporation)

Misao Hioki (employee of Bridgestone Corporation – a publicly traded corporation)

Nam Nguyen, Joseph Lukas, Kim Nguyen, An Nguyen (employees / agents of Nexus Technologies – a private business entity)

James Tillery and Paul Novak (employee / agent of Willbros Group)

Albert Jack Stanley, Jeffrey Tesler, Wojciech Chodan (employees / agents of KBR Inc., – a publicly traded corporation and/or other publicly traded corporations)

Richard Morlock, Stuart Carson, Hong Carson, Paul Cosgrove, David Edmonds, Flavio Ricotti, Han Yong Kim, Mario Covino (employees of Control Components Inc. – a private business entity)

Ousama Naaman (agent of Innospec – a publicly traded corporation)

John Jospeh O’Shea, Fernando Maya Basurto (employee / agent of ABB Ltd. – a publicly traded corporation)

Charles Paul Edward Jumet, John Warwick (employees of Ports Engineering Consultants Corporation – a private business entity)

Jorge Granados, Manuel Caceres, Juan Pablo Vasquez, Manuel Salvoch (employees of Latin Node Inc. – a private business entity)

Juan Diaz, Antonio Perez, Joel Esquenazi, Carlos Rodriguez, Marguerite Grandison, Jean Fourcand, Washington Vasconez Cruz, Amadeus Richers, Cecilia Zurita (employees / agents of Terra Telecommunications Corp., Telecom Consulting Services Corp., JD Locator Services, Inc. or Cinergy Telecommunications – all private business entities)

Enrique Faustino Aguilar, Angela Maria Gomez Aguilar, Keith Lindsey, Steve Lee (employees / agents of Lindsey Manufacturing Corp. – a private business entity)

Richard Bistrong (employee of Armor Holdings Inc. – a publicly traded corporation)

Jonathan Spiller John Mushriqui, Jeanna Mushriqui, David Painter, Lee Wares, Pankesh Patel, Ofer Paz, Israel Weisler, Michael Sacks, John Benson Wier, Haim Geri, Yochanan Choan, Saul Mishkin, R. Patrick Caldwell, Stephen Giordanella, Andrew Bigelow, Helmie Ashiblie, Daniel Alvirez, Lee Allen Tolleson, John Gregory Godsey (all employees of private business entities), Mark Morales (employee of Allied Defense Group – a publicly traded corporation), Amaro Goncalves (employee of Smith & Wesson – a publicly traded corporation)

Bobby Elkin (employee of Alliance One International – a publicly traded corporation)

Uriel Sharef, Herbert Steffen, Andres Truppel, Ulrich Bock, Stephan Signer, Eberhard Reichert, Carlos Sergi and Miguel Czysch (employees / agents of Siemens – a publicly traded corporation)

Garth Peterson (employee of Morgan Stanley, a publicly traded corporation

Peter DuBois, Neah Uhl, Bernd Kowalewski, Jald Jenson (associated with BizJet Int’l – a private business entity)

William Pomponi, Lawrence Hoskins, David Rotschild, Frederic Pierucci (associated with Alstom Power – a private business entity [note the individuals were charged under the dd-2 prong of the FCPA even though Alstom (the parent company) was a publicly traded company]

Joseph Sigelman, Knut Hammarskjold, Gregory Weisman (associated with Petro Tiger Ltd – a private business entity)

Dmitry Firtash, Andras Knopp, Suren Gevorgyan, Gajendra Lal, Periyasamy Sunderalingam (associated with DF Group – a private business entity)

Benito Chinea, Joseph DeMeneses, Tomas Clark, Alejandro Hurtardo, Ernesto Lujana (associated with Direct Access Partners – a private business entity)

Alain Riedo (associated with Maxwell Technologies – a publicly traded corporation)

Dmitrij Harder (associated with Chestnut Consulting Group – a private business entity)

James Rama (associated with IAP Worldwide – a private business entity)

Richard Hirsch, James McClung (associated with Louis Berger Int’l – a private business entity)

Vicente Garcia (associated with SAP – a publicly traded corporation)

Daren Condrey (associated with Transport Logistics International – a private business entity)

Roberto Rincon, Abraham Shiera (associated with private business entities)

A Focus On DOJ Individual Actions

Yesterday’s 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 2015 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. Assistant Attorney General Leslie Caldwell 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.”

DOJ FCPA Unit Chief Patrick Stokes 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.”

Most recently, Deputy Assistant Attorney General Sung-Hee Suh stated:

“[T]he prosecution of individuals for corporate wrongdoing has been and continues to be a high priority for the Criminal Division and for the Justice Department as a whole.”

Against this backdrop, what do the facts actually show?

A Focus On SEC Individual Actions

This previous post highlighted various facts and figures from 2015 SEC FCPA enforcement (both corporate and individual).

As highlighted in the prior post, of the 9 corporate SEC FCPA enforcement actions from 2015, 2 (22%) (PBSJ and FLIR Systems) have involved, at present, related SEC charges against company employees.

As further highlighted in the prior post, the SEC brought two individual enforcement actions in 2015 (Vicente Garcia – associated with SAP and Walid Hatoum – associated with PBSJ).

This post focuses on SEC FCPA individual actions historically.

The “Foreign Officials” Of 2015

A “foreign official.”

Without one, there can be no FCPA anti-bribery violation (civil or criminal).  Who were the alleged “foreign officials” of 2015?

This post highlights the alleged “foreign officials” from 2015 corporate DOJ and SEC FCPA enforcement actions.

There were 11 core corporate enforcement actions in 2015.

Of the 11 enforcement actions 6 (55%) explicitly involved, in whole or in part, employees of alleged state-owned or state-controlled entities (“SOEs). These entities ranged from health care providers, to sovereign wealth funds, to a real estate development firm, a sugar factory, a cement company, a diamond mine, and an oil and gas company.

By way of comparison, in 2014 60% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here). In 2013, 55% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here). In 2012, 42% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here at pages 348-353).  In 2011, 81% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here at pages 29-41).  In 2010, 60% of corporate FCPA enforcement actions involved, in whole or in part, employees of alleged SOEs (see here at pages 108-119).  In 2009, 66% of corporate FCPA enforcement actions involved, in whole or in part, employees of alleged SOEs (see here at pages 410-44).

In 2014, in an issue of first impression for an appellate court, the 11th Circuit set forth a control and function test for whether an alleged SOE can be “instrumentality” under the FCPA such that its employees are “foreign officials” under the FCPA.  As highlighted here and more extensively in my Supreme Court amicus brief supporting the cert petition, there were many flaws in the 11th Circuit’s reasoning.  The Supreme Court declined to hear the case.  As to whether Congress intended employees of SOEs to be “foreign officials” under the FCPA, see here for my “foreign official” declaration.

The remainder of this post describes (as per DOJ/SEC allegations) the “foreign officials” of 2015.  As is apparent from the descriptions below, in certain instances the enforcement agencies describe the “foreign official” with reasonable specificity; in other instances with virtually no specificity.

[Note:  certain of the enforcement actions below technically only involved FCPA books and records and internal control charges or findings.  As most readers know, actual charges in many FCPA enforcement actions hinge on voluntary disclosure, cooperation, collateral consequences, and other non-legal issues.  Thus, even if an FCPA enforcement action is resolved without FCPA anti-bribery charges, most such actions remain very much about the “foreign officials” involved – a fact evident when reading the actual enforcement action].

PBSJ

SEC

Employees of Qatari Diar Real Estate Investment Company (“Qatari Diar”). Qatari Diar was established by the Qatari government to coordinate the country’s real estate development.

Goodyear

SEC

Employees of Kenyan government-owned or affiliated entities including including the Kenya Ports Authority, the Armed Forces Canteen Organization, the Nzoia Sugar Company, the Kenyan Air Force, the Ministry of Roads, the Ministry of State for Defense, the East African Portland Cement Co., and Telkom Kenya Ltd.

Employees of government-owned or affiliated entities in Angola, including the Catoca Diamond Mine, UNICARGAS, Engevia Construction and Public Works, the Electric Company of Luanda, National Service of Alfadega, and Sonangol.

IAP Worldwide

DOJ

Individual(s) at the Kuwaiti Ministry of the Interior

BHP Billiton

SEC

Government officials and employees of state-owned enterprises to attend the Olympics at the company’s expense. The majority of these invitations were extended to government officials from countries in Africa and Asia that had well-known histories of corruption.

FLIR Systems

SEC

Individuals with the Saudi Arabia Ministry of Interior. Individuals from the Egyptian Ministry of Defense

Louis Berger

DOJ

Various foreign officials in Indonesia, Vietnam, India and Kuwait.

Hyperdynamics

SEC

Payments by company subsidiaries in the Republic of Guinea for purported public relations and lobbying expenses, even though the company lacked sufficient supporting documentation to determine whether the services were actually provided and to identify the ultimate recipient of the funds.

Hitachi

SEC

Various payments to Chancellor House Holdings (Pty) Ltd. (“Chancellor”), a local South African company that was a front for the African National Congress (“ANC”), South Africa’s ruling political party

BNY Mellon

SEC

The company provided “valuable student internships to family members of foreign government officials affiliated with a Middle Eastern sovereign wealth fund.”

Mead-Johnson

SEC

Certain health care professionals at state-owned hospitals in China

Bristol-Myers Squibb

SEC

Various health care providers at state-owned and state-controlled hospitals in China