DOJ Charges 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.”
Last week, the DOJ filed criminal charges against Mauricio Gomez Baez based on the same core conduct. 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.
Issues To Consider From The Stericycle Enforcement Action
This previous post highlighted the recent net $59 million Foreign Corrupt Practices Act enforcement action against Stericycle (an Illinois based medical waste disposal company) for conduct in Brazil, Mexico, and Argentina.
Portions of the alleged conduct were egregious in that an executive of the company’s Latin America division orchestrated the bribery schemes and others associated with the company used “spreadsheets to track the bribe payments.”
Nevertheless, there are several legal and policy issues to consider from the enforcement action.
Timeline
As highlighted in this post, Stericycle disclosed its FCPA scrutiny in mid-2017.
Stericyle Resolves A Net $59 Million FCPA Enforcement Action
Stericycle (an Illinois based medical waste disposal company) has been under FCPA scrutiny since mid-2017 (See here).
As highlighted here, approximately two months ago the company disclosed that it had “reached agreements in principle with the DOJ and SEC.” Specifically, Stericycle disclosed:
Yesterday, the DOJ and SEC announced (here and here) a parallel FCPA enforcement action against Stericycle.
The DOJ enforcement action involved this 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.
The SEC enforcement action involved this administrative order finding that Stericycle violated the FCPA’s anti-bribery, books and records, and internal controls provisions pursuant to which the company agreed to pay a net approximate $24 million in disgorgement and prejudgment interest.
Stericyle Discloses Future $81 Million FCPA Resolution
Even though the DOJ and SEC have long talked about the importance of prompt Foreign Corrupt Practices Act investigations (for instance who can forget a high-ranking DOJ enforcement attorney stating in 2017 that the DOJ’s “intent is for our FCPA investigations to be measured in months, not years”), the fact remains that FCPA lasts way too long.
Stericycle (an Illinois based medical waste disposal company) that has been under FCPA scrutiny since mid-2017.
In November 2021, Stericycle disclosed the accrual of $61 million for resolution of the FCPA matter.
Recently, the company upped the accrual to approximately $81 million and disclosed that it has “reached agreements in principle with the DOJ and SEC.”
Stericycle Accrues $61 Million For Future FCPA (And Related) Settlements
Even though the DOJ and SEC have long talked about the importance of prompt Foreign Corrupt Practices Act investigations (for instance who can forget a high-ranking DOJ enforcement attorney stating in 2017 that the DOJ’s “intent is for our FCPA investigations to be measured in months, not years”), the fact remains that FCPA scrutiny tends to last approximately four years on average.
Stericycle (an Illinois based medical waste disposal company) that has been under FCPA scrutiny since mid-2017.