Guilty Plea
This recent post checked in on the Foreign Corrupt Practices Act enforcement action against Abraham Cigarroa Cervantes (pictured – a Mexican citizen described as a former finance director of the Latin America division of Stericycle).
In terms of background, in mid-2022, Stericycle (an Illinois based medical waste disposal company) resolved a net $59 million parallel DOJ and SEC Foreign Corrupt Practices Act enforcement action (see here and here for prior posts).
In the words of the DOJ: “From in or about and between at least 2011 and 2016, Stericycle, through certain of its employees and agents, knowingly and willfully conspired and agreed with others to corruptly offer and pay approximately $10.5 million in bribes to, and for the benefit of, foreign officials in Brazil, Mexico, and Argentina in order to obtain and retain business and other advantages for and on behalf of Stericycle. Stericycle earned approximately $21.5 million in profits from the corrupt scheme and through its corruptly obtained and retained government contracts.”
From The Docket
In mid-2022, Stericycle (an Illinois based medical waste disposal company) resolved a net $59 million parallel DOJ and SEC Foreign Corrupt Practices Act enforcement action (see here and here for prior posts).
In the words of the DOJ: “From in or about and between at least 2011 and 2016, Stericycle, through certain of its employees and agents, knowingly and willfully conspired and agreed with others to corruptly offer and pay approximately $10.5 million in bribes to, and for the benefit of, foreign officials in Brazil, Mexico, and Argentina in order to obtain and retain business and other advantages for and on behalf of Stericycle. Stericycle earned approximately $21.5 million in profits from the corrupt scheme and through its corruptly obtained and retained government contracts.”
In February 2024 the DOJ criminally charged Mauricio Gomez Baez based on the same core conduct. (See here for the prior post). As alleged in the information, Gomez Baez (a Mexican citizen and resident of Miami) worked for Stericycle as the Senior Vice President of Stericycle’s Latin American (LATAM) division whose business responsibilities included oversight and management of Stericycle LATAM and certain of Stericycle subsidiaries, including acquisitions, operations, finance, and sales.
Stericycle DPA Ends
As highlighted in this prior post, in mid-2022 Stericycle (an Illinois based medical waste disposal company) resolved a net $59 million parallel DOJ and SEC enforcement action concerning conduct in Brazil, Mexico, and Argentina.
The DOJ enforcement action involved a criminal information charging Stericycle with two counts of conspiracy to violate (1) the FCPA’s anti-bribery provisions, and (2) the FCPA’s books and records provision. The criminal charges were resolved via this deferred prosecution agreement pursuant to which Stericycle agreed to pay a net $35 million criminal penalty.
Stericycle Discloses $4.1 Million In Monitor Expenses
The article “FCPA Ripples” highlights the many financial ripple effects of Foreign Corrupt Practices scrutiny and enforcement beyond an actual enforcement action by the DOJ/SEC.
Among the financial ripple effects are the “three buckets” of FCPA financial exposure: (1) pre-enforcement action professional fees and expenses; (2) settlement amount; and (3) post-enforcement action professional fees and expenses.
Numerous examples (based on company disclosures) demonstrated that pre-enforcement action professional fees and expenses are typically the largest financial hit to companies as those expenses are often three times (and sometimes higher) the settlement amount.
DOJ Charges Another Former Stericycle Executive
In mid-2022, Stericycle (an Illinois based medical waste disposal company) resolved a net $59 million parallel DOJ and SEC Foreign Corrupt Practices Act enforcement action (see here and here for prior posts).
In the words of the DOJ: “From in or about and between at least 2011 and 2016, Stericycle, through certain of its employees and agents, knowingly and willfully conspired and agreed with others to corruptly offer and pay approximately $10.5 million in bribes to, and for the benefit of, foreign officials in Brazil, Mexico, and Argentina in order to obtain and retain business and other advantages for and on behalf of Stericycle. Stericycle earned approximately $21.5 million in profits from the corrupt scheme and through its corruptly obtained and retained government contracts.”