DOJ Individual Actions: The Strange Public – Private Divide
These pages track all sorts of Foreign Corrupt Practices Act statistics.
Some of the statistics are “inside baseball” like and other statistics (such as the long time periods associated with FCPA scrutiny or the general lack of individual enforcement actions in connection with most corporate enforcement actions) raise significant public policy issues and/or undermine government rhetoric.
The statistic discussed in this post fits all three categories: it is equal parts “inside baseball,” it raises significant public policy issues, it undermines government rhetoric, and moreover it is just plain strange (or perhaps it isn’t).
A Focus On DOJ Individual FCPA Enforcement Actions
This recent post focused on SEC individual FCPA actions in 2023 and historically.
Today’s post highlights various facts and figures regarding the DOJ’s prosecution of individuals for Foreign Corrupt Practices Act offenses in 2023 and historically.
The key word above is FCPA offenses.
Some in the FCPA space include enforcement actions containing non-FCPA charges (often money laundering charges against alleged “foreign officials” or with increasing frequency money laundering charges against alleged bribe payors – see here) related to an FCPA enforcement action as an individual FCPA enforcement action. While it is fine to track such enforcement actions, calling them FCPA enforcement actions is factually false. (In fact, as highlighted in this prior post, approximately 55% of enforcement actions in recent years on the DOJ’s FCPA website are not actual FCPA enforcement actions).
DOJ Announces Individual Enforcement Action In Connection With A Bribery Scheme Involving The Honduran National Police
Last week the DOJ announced the unsealing of an indictment criminally charging:
Carl Alan Zaglin (the owner of a Georgia-based manufacturer of law enforcement uniforms and accessories);
Francisco Roberto Cosenza Centeno (former Executive Director of the Comité Técnico del Fideicomiso para la Administración del Fondo de Protección y Seguridad Poblacional (TASA) a Honduran governmental entity that procured goods for the Honduran National Police); and
Aldo Nestor Marchena (a dual citizen of the U.S. and Peru)
for their alleged participation in a scheme to pay and conceal bribes to Honduran government officials to secure contracts to provide uniforms and other goods to the Honduran National Police.
Although not named in the indictment, the “Georgia company” is presumably Tru-Spec (owned by Atlanco, formerly Atlanta Army Navy Company).
Let’s Analyze This For A Minute
As highlighted in this post, earlier this week Acting Assistant Attorney General Nicole Argentieri gave an FCPA speech in which she stated, among other things, as follows.
“Our corporate enforcement policies encourage companies to voluntarily self-disclose misconduct and cooperate for good reason: It allows us to build stronger cases against culpable individuals more quickly. As searching as our investigations may be, there are some cases that we may never learn about absent a company’s voluntary self-disclosure. And we require those disclosures to be timely so we can preserve evidence more easily, carry out our own investigation into wrongful conduct, interview witnesses before memories fade, and prosecute individuals or other entities before the expiration of the statute of limitations.”
DOJ officials have been saying the same thing for years.
But, let’s analyze this for a minute.
Taking A Helicopter To A L.A. Lakers Game
In June 2023, the DOJ announced an enforcement action against Amadou Kane Diallo (pictured – a Senegalese national and California resident who was the CEO of two California-based companies: Virtual Advisors LLC and Liquide Inc).
As stated in the DOJ release:
“Diallo allegedly solicited investments in his companies from at least 11 individuals for purported business opportunities in technology, health care, real estate, home ownership, and service to the African diaspora. Diallo allegedly made various false representations, including that investor funds would be spent to further investors’ interests, or not be spent at all, and instead used as “skin in the game” to attract institutional investors. Diallo is also alleged to have lied to potential investors, claiming that he had raised hundreds of millions of dollars for another investment firm and its real estate investment fund when, in fact, he had never raised any such funds.