Scoular Resolves $10.2 Million FCPA Enforcement Action
In 2025, Carlos Leopoldo Alvelais pleaded guilty to a Foreign Corrupt Practices Act offense of some sort in the Western District of Texas. (See here for the prior post).
The facts and circumstances of the enforcement action were unclear as much of the substantive court docket was and remains under seal.
However, last Friday the DOJ announced that “The Scoular Company (Scoular), an agricultural supply chain company based in Omaha, Nebraska, will pay over $10 million to resolve an investigation by the Justice Department into a years-long scheme in which it relied on bribery of Mexican officials to deliver trains of goods across the U.S.-Mexico border.”
According to the DOJ release, Carlos Leopoldo Alvelais was a customs broker who paid bribes on behalf of Scoular.
Strip Club Issuer Charged With Bribing Tax Official With Lap Dances (Among Other Things)
RCI Hospitality Holdings Inc. is a publicly traded Texas corporation with shares traded on the NASDAQ exchange. Through its subsidiaries, RCI owns and operates more than 60 strip clubs and restaurants throughout the U.S. including
three located in New York.
As an issuer, RCI is subject to the FCPA including the books and records and internal controls provisions.
The books and records provisions generally require issuers to “make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer.”
On Permits …
The root cause of many Foreign Corrupt Practices Act enforcement actions is a foreign law or regulation that forces a company (through an employee or agent) into a relationship with a “foreign official.”
This root cause analysis is often fairly straightforward: the foreign law or regulation often creates bureaucracy; bureaucracy creates points of contact with foreign officials; points of contact with foreign officials create discretion; discretion creates the opportunity for a foreign official to misuse their position by making bribe demands.
This analysis is not meant to excuse or condone the conduct at issue, but rather to understand how and why there was a “point of contact” with a foreign official in the first place.
BIT Mining (500.Com) Resolves FCPA Enforcement Action In Connection With Failed Japan Bribery Scheme
Yesterday the DOJ and SEC announced a net $10 million Foreign Corrupt Practices Act enforcement action against BIT Mining Ltd. (formerly known as 500.com) in connection with a failed Japan bribery scheme concerning efforts to obtain a license to operate a casino.
500.com was formerly an online sports lottery service provider incorporated in the Cayman Islands, with headquarters and major business operations in Shenzhen, China with American Depositary Shares (ADS) traded on the New York Stock Exchange (NYSE). 500.com is now known as BIT Mining, a crypto assets mining business incorporated in the Cayman Islands and headquartered in Ohio with ADSs traded on the NYSE.
The enforcement action involved a DOJ component (net $6 million – a $54 million criminal penalty, reduced to $10 million based on an inability to pay, and further reduced to $6 million reflecting a credit for the amount paid to the SEC) and an SEC component ($4 million civil penalty).
In addition, the DOJ announced that Zhengming Pan (a Chinese national and the former CEO of 500.com) was criminally indicted in June in connection with the same bribery scheme and charged with one count of conspiracy to violate the anti-bribery and books and records provisions of the FCPA, one count of violating the anti-bribery provisions of the FCPA, and two counts of violating the books and records provisions of the FCPA.
Domestic Bribery Alleged In Connection With Fire Department Inspections
Unlike the FCPA’s anti-bribery provisions, 18 USC 666 (Theft or bribery concerning programs receiving Federal funds) does not contain an express facilitation payment exception which exempts conduct to “expedite or secure the performance of a routine governmental action” defined to include “obtaining permits, licenses, or other official documents.”
Even though the FCPA contains such a provision, and even though Congress explained in the legislative history that the FCPA would not reach “payments made to secure permits, licenses, or the expeditious performance of similar duties of an essentially ministerial or clerical nature which must of necessity by performed in any event,” many FCPA enforcement actions in the modern era of enforcement do indeed involve licenses, permits, and the like.
A recent domestic bribery enforcement action – invoking 18 USC 666 – concerns similar conduct.