Category: Year in Review 2015

What You Need To Know From Q4

Several 2015 year in review posts will be published this month.

But first, the fourth quarter of 2015 needs to be closed out.

This post provides a summary of Foreign Corrupt Practices Act enforcement actions and FCPA related events from the fourth quarter of 2015. (See similar posts here, here and here for Q1, Q2 and Q3).

DOJ Enforcement (Corporate)

Consistent with the slow year in DOJ corporate FCPA enforcement, there was no DOJ corporate FCPA enforcement actions in the fourth quarter.

What makes this unusual – compared to historical trends – is that December specifically, and the fourth quarter generally, has traditionally been a very active month / quarter for DOJ FCPA enforcement. (See here for the prior post).

DOJ Enforcement (Individual)

As highlighted in this post, in the fourth quarter the DOJ unsealed a criminal indictment against Roberto Rincon and Abraham Shiera for alleged improper business practices with officials at Petroleos de Venezuela S.A. (PDVSA), Venezuela’s alleged state-owned and state-controlled oil company.

SEC Enforcement (Corporate)

The SEC brought one corporate FCPA enforcement actions in the fourth quarter. SEC recovery in this action was $14.7  million.

That there was only one corporate SEC FCPA enforcement action in the fourth quarter was likewise unusual – compared to historical trends – is that December specifically, and the fourth quarter generally, has traditionally been a very active month / quarter for SEC FCPA enforcement. (See here for the prior post).

Bristol-Myers Squibb (October 5th)

See here and here for prior posts

Charges:   None. Administrative cease and desist order finding violations of the FCPA’s books and records and internal controls provisions

Settlement:  $14.7 million

Disclosure: According to the company’s disclosures, its FCPA scrutiny began in 2006 when the SEC informed the company that it had begun a formal inquiry into the activities of certain of the company’s subsidiaries and its employees and agents. In March 2012, the company received a subpoena from the SEC issued in connection with its investigation under the FCPA, primarily relating to sales and marketing practices in various countries.

Individuals Charged:  No

Related DOJ Enforcement Action:  No.

SEC Enforcement (Individual)

The SEC did not bring any individual FCPA enforcement actions in the fourth quarter.

What You Need To Know From Q3

This post provides a summary of Foreign Corrupt Practices Act enforcement activity and related events from the third quarter of 2015. (See similar posts here and here for Q1 and Q2).

DOJ Enforcement (Corporate)

There was one DOJ corporate FCPA enforcement action in the third quarter. DOJ recovery in this enforcement action was $17.1 million.

Year-to-date, the DOJ has brought two corporate enforcement actions. DOJ recovery in these enforcement actions has been approximately $24.2 million.

Louis Berger Int’l.  (July 17th)

See here for the prior post

Charges:  Conspiracy to violate the FCPA’s anti-bribery provisions

Resolution Vehicle:  DPA

Guidelines Range:  $17.1 million – $34.2 million

Penalty:  $17.1 million.

Disclosure:  The DPA states: “after the government had made [the company] … aware of a False Claim Act investigation, [the company] conducted an internal investigation, discovered potential FCPA violations, and voluntarily self-reported to the [DOJ] the misconduct”

Monitor:  Yes

Individuals Charged:  Yes

DOJ Enforcement (Individual)

In the third quarter, the DOJ: (i) brought an individual enforcement action against Richard Hirsch and James McClung in connection with the Louis Berger corporate enforcement action (see here); (ii) brought an enforcement action against Vicente Garcia, a former SAP sales exec, (see here); and (iii) announced an enforcement action against Daren Condrey, a former owner and executive of Maryland-based Transport Logistics International, (see here).

Year-to-date, the DOJ has brought five core individual enforcement actions.  The three mentioned above, in the second quarter, the DOJ brought an individual enforcement action against James Rama in connection with the IAP Worldwide Services Action, and in the first quarter the DOJ announced criminal charges against Dmitrij Harder, the former owner and President of Chestnut Consulting Group Inc.

SEC Enforcement (Corporate)

The SEC brought four corporate FCPA enforcement actions in the third quarter. SEC recovery in these actions was approximately $46 million.

Year-to-date, the SEC has brought eight corporate enforcement actions, all via administrative orders with the exception of Hitachi. SEC recovery in these enforcement actions has been approximately $100 million.

Hyperdynamics (Sept. 29th)

See here for the prior post

Charges:   None. Administrative cease and desist order finding violations of the FCPA’s books and records and internal controls provisions

Settlement:  $75,000

Disclosure: According to the company’s disclosure –  “the SEC had issued a subpoena to Hyperdynamics concerning possible violations of the FCPA”

Individuals Charged:  No

Related DOJ Enforcement Action:  No.

Hitachi  (Sept. 28th)

See here and here for prior posts

Charges:   Settled civil complaint charging FCPA books and records and internal controls violations.

Settlement:  $19.1

Disclosure:   Not specified in the resolution documents.

Individuals Charged:  No

Related DOJ Enforcement Action:  No.

BNY Mellon (August 18th)

See here and here for prior posts.

Charges:   None.  Administrative cease and desist order finding violations of the FCPA’s anti-bribery and internal control provisions.

Settlement:  $14.8 million ($8.3 million in disgorgement, $1.5 million in prejudgment interest, and a $5 million penalty).

Disclosure:   Unclear from the resolution documents (perhaps the industry sweep of the financial services industry)

Individuals Charged:  No.

Related DOJ Enforcement Action:  No.

Mead Johnson (July 28th)

See here and here for prior posts.

Charges:   None.  Administrative cease and desist order finding violations of the FCPA’s books and records and internal controls provisions.

Settlement:  Approximately $12 million ($7.77 million in disgorgement, $1.26 million in prejudgment interest, and a $3 million penalty).

Disclosure:  The resolution documents state: “In 2011, Mead Johnson received an allegation of possible violations of the FCPA in connection with the Distributor Allowance in China. In response, Mead Johnson conducted an internal investigation, but failed to find evidence that Distributor Allowance funds were being used to make improper payments to HCPs. Thereafter, Mead Johnson China discontinued Distributor Allowance funding to reduce the likelihood of improper payments to HCPs, and discontinued all practices related to compensating HCPs by 2013. Mead Johnson did not initially self-report the 2011 allegation of potential FCPA violations and did not thereafter promptly disclose the existence of this allegation in response to the Commission’s inquiry into this matter.

Individuals Charged:  No.

Related DOJ Enforcement Action:  No.

SEC Enforcement (Individual)

The SEC brought one individual enforcement action in the third quarter against Vicente Garcia based on the same core conduct alleged in the DOJ action. Garcia agreed to resolve the SEC action by agreeing to pay approximately $93,000

Year-to-date there has been two FCPA enforcement actions against individuals. The above Garcia action and in the first quarter, in connection with the PBSJ enforcement action, the SEC also charged Walid Hatoum (a former executive of PBS&J International, Inc.).

Thus Far In 2015 …

The day after Labor Day has always seemed like a second New Year.

In that spirit, let’s kick off the “new year” by reviewing what has happened thus far in 2015.

*****

August

Enforcement activity

There were three FCPA enforcement actions brought or announced in August.

As highlighted here, BNY Mellon became the first – of what is expected to be several financial services companies – to pony up millions ($14.8 million to be precise) in an SEC enforcement action based on its alleged internship practices.  This follow-up post flagged various issues to consider from the enforcement action including that it was the first SEC FCPA enforcement ever not to include allegations or findings of books and records violations.  This post used the recent BNY Mellon enforcement action to once again highlight why the meaning of “foreign official” matter. Finally, and accepting the SEC’s enforcement action for what it is, this post highlighted how business organizations would be wise to ask whether its hiring practices live up to the SEC’s new expectations.

As highlighted here, the DOJ and SEC brought a parallel enforcement action against Vicente Garcia (a U.S. citizen and former head of Latin America sales for SAP) for alleged conduct in Panama. Garcia pleaded guilty and is to be sentenced in December.  Garcia agreed to resolve the SEC action by agreeing to pay approximately $93,000. This follow-up post highlights how rare the parallel DOJ and SEC enforcement action against an individual was.

As highlighted here, the DOJ quietly announced a June 2015 enforcement action against Daren Condrey (a former owner and executive of Maryland-based Transport Logistics International) for bribing an alleged Russian “foreign official” employed by entities involved in the supply of uranium to the nuclear industry. Condrey pleaded guilty and is to be sentenced in November.  As highlighted in the post, the alleged Russian “foreign official” (Vadim Mikerin) pleaded guilty in a related enforcement action to money laundering offenses.

Other developments or items of interest from August included the following

As highlighted here, the DOJ once again stumbled when put to its burden of proof as a judge trimmed the DOJ’s FCPA enforcement action against Lawrence Hoskins (a foreign national and former Alstom executive criminally charged in August 2013) by granting his motion to dismiss and denying a DOJ motion in limine.  The ruling primarily relied upon the FCPA’s legislative history regarding the category of defendants Congress sought to capture in the FCPA. As highlighted in this follow-up post, the recent ruling demonstrates once again the importance of the FCPA’s legislative history.

This post analyzes how the DOJ’s recent announcement of compliance counsel represents just the latest public relations move by the DOJ to hide its justified discomfort with respondeat superior corporate criminal liability principles and to make it appear that the DOJ is addressing the key core issue.

In this guest post, the adult daughter of Carlos Rodriguez reminds us that her father is more than just a name associated with the recent 11th Circuit “foreign official” decision.

Click here for an FCPA Summer Reading List that can help you elevate your FCPA knowledge, sophistication, and practical skills.

July

Enforcement Actions

There were two FCPA enforcement actions in July.

As highlighted here, the SEC brought an enforcement action against Mead Johnson Nutrition Company in which the company agreed, without admitting or denying the SEC’s findings, to pay approximately $12 million pursuant to an administrative cease and desist order concerning alleged conduct in China.  The enforcement action was the latest in a long-line of enforcement actions premised on the theory that physicians of certain foreign health care systems are “foreign officials” under the FCPA.

As highlighted here and here, the DOJ brought an enforcement action against Louis Berger International Inc. and two former employees concerning alleged conduct in connection with projects in Indonesia, Vietnam, India and Kuwait. Pursuant to a deferred prosecution agreement, LBI agreed to pay $17.1 million and to engage a compliance monitor for a three year period. The former employees pleaded guilty to one count of conspiracy to violate the FCPA and one substantive count of violating the FCPA and are to be sentenced in November.

Other developments or items of interest from July included the following

Several posts in July (see here, here, here and here) explored double standards when it comes to enforcement of U.S. domestic bribery laws compared to FCPA enforcement.

This post examined the DOJ’s seeming unwillingness to accepts its recent FCPA trial court debacles.

This guest post highlights lessons learned as an FCPA monitor.

June

Enforcement activity

There was one core FCPA enforcement action in June.

As highlighted here, the DOJ brought its first corporate enforcement action of 2015 against IAP Worldwide Services Inc. The conduct at issue focused on James Rama, who was IAP’s former Vice President of Special Projects and Programs, and concerned alleged improper conduct in connection with contracts with Kuwait’s Ministry of the Interior.  Pursuant to an NPA, IAP agreed to resolve the enforcement action by paying a $7.1 million penalty.  Based on the same conduct, the DOJ also announced a plea agreement with Rama to one count of conspiracy to violate the FCPA.

Other developments or items of interest from June included the following

For the first time since its trial court debacles in 2011 and 2012, the DOJ was put to its burden of proof in an individual FCPA enforcement action.

As highlighted here, U.S. v. Joseph Sigelman was in the early stages of trial when the DOJ’s star witness (an individual who previously pleaded guilty to the same core conduct and was cooperating with the DOJ in the hopes of achieving a lower sentence) ran into some problems on the witness stand.  In short, the witness acknowledged giving false testimony during the trial prompting federal court judge Joseph Irenas (D.N.J.) to ask the witness “did you have a hallucination?” The trial adjourned as the DOJ contemplated what to do next and shortly thereafter the DOJ effectively pulled its case against Sigelman when it offered the defendant a plea agreement to substantially reduced charges.

As highlighted here, Judge Irenas refused to sentence Sigelman to any jail time and in doing so blasted the DOJ (see here).  As highlighted here, U.S. v. Sigelman was just the latest DOJ FCPA trial court debacle.

May

Enforcement activity

There was one FCPA enforcement action in May.

As highlighted here and here, the SEC brought an administrative action against BHP Billiton in which the company agreed to pay $25 million.  The conduct at issue concerned alleged internal control deficiencies regarding the company’s hospitality program in connection with its sponsorship of the 2008 Beijing Summer Olympic Games. While the $25 million enforcement action did not set any records in terms of overall settlement amount, the $25 million civil penalty represents the largest SEC FCPA penalty ever and the second largest SEC only FCPA enforcement action of all-time.  That such largeness occurred in a travel and entertainment action is remarkable and further to the point that FCPA settlements (and components thereof) seem to be getting bigger each year … just because.

As relevant to the DOJ’s 2014 FCPA enforcement action against Ukrainian businessman Dmitry Firtash, as highlighted here an Austrian judge denied the DOJ’s extradition request and called the DOJ’s case “politically motivated” and lacking “sufficient proof.”

Other developments or items of interest from May included the following

A s highlighted here, here and here, May was (like prior months) an active month for speeches by DOJ and SEC enforcement officials regarding the FCPA and related topics. In particular, the war of words continued as to blame for exorbitant pre-enforcement action professional fees and expenses.

As highlighted here, in a civil defamation case in the aftermath of an FCPA enforcement action the Texas Supreme Court held that providing an internal investigation report to the DOJ was “absolutely privileged” under the defamation laws.  The case was closely followed by the corporate community given its potential impact on conducting internal investigations and cooperating with government enforcement agencies.

For the reading stack, a new article here titled “Ten Seldom Discussed FCPA Facts That You Need to Know.”

April

Enforcement activity

There was one FCPA enforcement action in April.

As highlighted here and here the SEC brought an administrative action against FLIR Systems Inc. in which the company agreed to pay approximately $9.5 million.  The conduct at issue was the same as the SEC’s November 2014 enforcement action against former FLIR Systems employees and concerned alleged expensive travel, entertainment and personal items being provided to Saudi officials.

Other developments or items of interest from May included the following

As highlighted here, Assistant Attorney General Leslie Caldwell delivered a speech in which she stated that although the DOJ expects “internal investigations to be thorough,” the DOJ does “not expect companies to aimlessly boil the ocean.”  In the same speech, Caldwell spoke about the “Criminal Division’s efforts to increase transparency in its corporate prosecutions” and this post analyzes DOJ transparency in the FCPA context.

As highlighted here, in a foreign bribery case in the same general sphere of the FCPA, a federal court judge benchslapped the DOJ and stated that he had never seen more of a “misguided prosecution.”

In the spirit of March Madness, this post highlighted the likely outcome of Duke’s national championship season if the team was a business organization subject to various criminal or civil laws such as the FCPA.

March

Enforcement activity

There was no FCPA enforcement actions in March.

Other developments or items of interest from March included the following

It was an active speaking month for SEC enforcement officials.  This post analyzes an FCPA speech given by the SEC’s Director of Enforcement at a pharmaceutical conference and this post analyzes how the same individual was on the hot seat during a Congressional hearing regarding the surge in SEC administrative actions. This post analyzes how the numbers do not support the SEC Chair’s recent statement that “the Commission is focused on holding individuals accountable in FCPA cases.”

Biomet announced that its 2013 deferred prosecution agreement was extended for a year based on the company’s fresh FCPA scrutiny and this post highlights two issues related to this development.

On the FCPA-related civil litigation front, as highlighted in this post, a federal court judge recently dismissed an Avon shareholder derivative complaint finding, among other things, that just because “the FCPA is not commonly the subject of litigation” does not create a substantial federal interest in state law claims related to the FCPA.

In the spirit of March Madness, this post called a timeout regarding certain commentary about the February FCPA enforcement action against Goodyear.

February

Enforcement activity

There was one FCPA enforcement action in February.

As highlighted here, without admitting or denying the SEC’s findings, Goodyear Tire & Rubber Co. agreed to pay approximately $16 million to resolve an SEC administrative action focused on alleged subsidiary conduct in Angola and Kenya.  This post highlights various issues to consider from the enforcement action including how the SEC invoked a standard of liability that does not even exist under the FCPA.

Other developments or items of interest from February included the following

As highlighted here in connection with hearings of Attorney General Nominee Loretta Lynch, the Senate remains interested in FCPA issues.

As highlighted here, in an action related to U.S. v. Esquenazi (the 11th Circuit’s 2014 “foreign official” decision), the 11th Circuit discussed the “routine governmental action” prong of the FCPA’s facilitating payments exception.

As highlighted here, a federal court judge rejected a DOJ deferred prosecution agreement.  While outside the FCPA context, given the prominence of DPAs (and NPAs) in the FCPA context, the case – and upcoming appeal – are certainly worth watching.

January

Enforcement activity

There were two FCPA enforcement actions in January.

As highlighted here, the DOJ announced criminal charges against Dmitrij Harder, the former owner and President of Chestnut Consulting Group Inc. for allegedly bribing an official with the European Bank for Reconstruction and Development. The enforcement action is notable in that it invoked the rarely used “public international organization” prong of the FCPA’s “foreign official” element.

As highlighted here, the SEC got creative in its first FCPA enforcement action of 2015 by agreeing to a deferred prosecution agreement with a legal entity that has not existed since April 2011 (PBSJ Corporation) and bringing a related administrative action against an individual (Walid Hatoum, a former executive of PBS&J International, Inc.) who agreed to resolve the action without admitting or denying the SEC’s findings.  Never before has an SEC FCPA enforcement seen such a combination.  PBSJ agreed to pay disgorgement and interest of $3,032,875 and a penalty of $375,000 and Hatoum agreed to pay a penalty of $50,000.

Other developments or items of interest from January included the following

FCPA Professor was the place to visit in January for in-depth FCPA enforcement statistics from 2014 as well as comparisons to historical statistics. If you missed the daily posts, no worries as this post consolidates in one place the statistics published on FCPA Professor in January.

As highlighted here  the DOJ announced Andrew Weissmann has been selected as the Chief of the Criminal Division’s Fraud Section. In recent years, Weissmann has been a vocal advocate of FCPA reform and more broadly reforming corporate criminal liability principles.

Mid-Year Review Of Anti-Corruption Law North Of The 49th Parallel

A guest post  from Mark Morrison (Blake, Cassels & Graydon) the Canada Expert for FCPA Professor, and Blakes attorneys Michael Dixon and James Reid.

*****

This year, Canada has been actively implementing laws aimed at a holistic approach to the fight against corruption. This post discusses some of the new legislation effected by the Canadian Government to compliment Canada’s equivalent of the FCPA, the Corruption of Foreign Public Officials Act (CFPOA), as well as some of the recent enforcement proceedings taking place in Canada so far this year.

New Anti-Corruption Laws

The Integrity Regime – On July 3, 2015, the Government’s principal contracting arm, Public Works and Government Services Canada,  announced the implementation of a new government-wide Integrity Regime for all federal government procurement. The new Regime replaced the Integrity Framework, which was heavily criticized as being unfairly harsh for its lack of due process and failure to account for remedial actions taken by companies subject  to its application. The new Regime has provided some flexibility to ameliorate some of the harshest aspects of the Framework.

Under the Integrity Regime, a supplier is barred from doing business with the Government of Canada for 10 years if it or any board members have been convicted or discharged in the past three years for a range of integrity-related offences in Canada or abroad, including bribery, fraud, bid-rigging, tax evasion, insider trading and money laundering. However, the decade long ban can be cut in half if the supplier shows it has taken action to co-operate with authorities, takes remedial action and enters into an administrative agreement with the Government. While the new regime amounts to a retreat from the integrity rules enacted just last March, in which any prior conviction against a supplier or any of its international affiliates would have earned a 10-year ban with no chance of its reduction, the automatic debarment penalty remains–unlike the U.S. equivalent integrity provisions.

In addition, arguably the most significant improvement to the former Integrity Framework, is that the new Regime eliminates mandatory ineligibility of a supplier for the actions of an affiliate (including a parent company) unless there is evidence that the supplier/potential supplier had involvement in the wrongdoing that led to the conviction of its affiliate.

The Extractive Sector Transparency Measures Act (ESTMA) – ESTMA is Canada’s latest step in the global fight against corruption. The ESTMA, which came into force on June 1, 2015, is designed to complement Canada’s existing anti-corruption regime in the CFPOA by creating greater transparency over payments to a government by the extractive sector. ESTMA’s reporting requirements apply to companies engaged in the development of oil, gas or minerals that are either (a) listed on a Canadian stock exchange or (b) have a place of business in Canada, do business in Canada or have assets in Canada, and which meet certain size thresholds.

Companies subject to the ESTMA are required to report and publically disclose all payments, including taxes, royalties, fees and any other consideration for licenses, permits or concessions in excess of CAD$100,000. The Government has recently published draft guidelines and reporting specifications for public comment. The ESTMA will apply to payments to certain aboriginal governments, subject to a two-year transitional period. Non-compliance with the reporting requirements is an offence. Any director or officer who directed, authorized, assented to, acquiesced in or participated in the non-compliance can also be held personally liable. These offences are subject to a maximum fine of CAD$250,000 for each day that the non-compliance continues.

Recent Enforcement Proceedings

Canadian anti-corruption enforcement has increased from 2014, which did not see any penalties imposed on corporate defendants under the CFPOA. The lack of enforcement in 2014 may have been reflective of the considerable resources and attention that was dedicated by the Royal Canadian Mounted Police (RCMP) to the high profile investigation of Canada’s largest construction and engineering firm.

SNC Lavalin – In February of this year, the RCMP laid corporate corruption and fraud charges against the Quebec based construction and engineering companies of the  SNC Lavalin Group, which stems from the Group’s dealings in Libya between 2001 and 2011. The RCMP investigation has also lead to criminal charges against several former SNC executives.

SNC maintains that any wrongdoing was the act of rogue individuals no longer employed by the company, and has entered a plea of not guilty. Unlike in the United States, Canada does not currently have deferred prosecution agreements, civil settlements, or other formal resolution procedures available outside of a criminal guilty plea. No preliminary hearing dates have been set in relation to the corruption charges against SNC.

In addition, to the Libya allegations, former SNC executives have also been charged in connection with an alleged bribery scandal related to a $1.3 billion hospital project in Montreal, where it has been alleged that former SNC executives funneled money to ex-McGill hospital officials in exchange for the contract. A three week preliminary hearing, which is protected by a publication ban, heard testimony from about 16 people this past March.  No decision on committal for trial has yet been issued.

MagIndustries – The RCMP has obtained a search warrant and is investigating allegations from a whistleblowing accountant at MagIndustries Corporation, that bribes were paid to officials in the Republic of Congo to win approvals tied to a potash mine development. The RCMP believe four top executives with the company, including the CEO, ignored warnings from Canadian financial advisers and signed off on a string of illegal payments to Congolese officials. None of the allegations contained in the search warrant have been tested in court, and the RCMP has not laid any charges to date.

Canadian Senate Expenses Scandal – dominating Canadian media headlines since the recent announcement of the October Federal Election, is the ongoing political scandal concerning the expense claims of certain Canadian senators which began in late 2012. Senators Patrick Brazeau, Mike Duffy, Mac Harb, and Pamela Wallin claimed travel and living allowance expenses which were ineligible. Brazeau, Duffy, and Harb were criminally charged with one count each of fraud and breach of trust. As a result, the Auditor General of Canada examined expense claims made by all the other 116 senators and former senators over a two-year period. In the June 2015 report of the Auditor General, the Auditor General identified thirty senators whose claims were ineligible, and of these, recommended that nine cases be referred for police investigation.

Conclusion

Canada continues to focus on anti-corruption compliance and enforcement by bolstering the legislative tools available to law enforcement and government agencies. Onlookers are intently watching what will come from the high profile cases against SNC and the Canadian senators. As things are looking now, the remainder of 2015 is shaping up to be one of the most active years in Canadian anti-corruption enforcement history.

Friday Roundup

Scrutiny alerts and updates, asset recovery, Fokker DPA appeal, Holder to private practice, and for the reading stack. It’s all here in the Friday roundup.

Scrutiny Alerts and Updates

Former Yara Executives

Reuters reports:

“A Norwegian court sentenced four former top executives at Yara, the world’s biggest nitrate fertilizer maker, to prison on Tuesday for paying bribes in Libya and India, in one of Norway’s biggest corruption scandals. Prosecutors had accused the men of paying around $8 million in bribes to officials in Indiaand Libya – including to the family of former Libyan leader Muammar Gaddafi’s oil minister and the family of a financial adviser in India’s Ministry of Chemicals and Fertilizers – for the right to establish joint ventures. Former CEO Thorleif Enger got the longest sentence of three years. His lawyer said he would appeal the sentence. Former chief legal officer Kendrick Wallace was sentenced to 2-1/2 years in prison, while former head of upstream activities Tor Holba and former deputy CEO Daniel Clauw were both given two-year jail terms years, court documents showed.”

For more on the underlying Libya investigations, see here.

Cerberus Capital Management

Cerberus Capital Management has been the subject of several recent media articles (see here and here for instance) concerning its purchase of a portfolio of the National Asset Management Agency (Nama) in 2014 in Northern Ireland.  According to reports:

“Northern Irish politicians have called for an investigation after a politican in Dublin alleged that Belfast law firm Tughans had £7m in an account, ‘reportedly earmarked for a Northern Ireland politician’.”

Tughans was engaged as local counsel by Brown Rudnick in connection with its representation of Cerberus. In response to the scrutiny, Brown Rudnick released this statement.

Asset Recovery

The DOJ recently filed this civil forfeiture complaint seeking “£22 million in British pounds (approximately $34 million at current exchange rates) that represent the value of 4,000,000 founders’ shares in Griffiths Energy International Inc. (“Griffiths Energy”), and that are traceable to, and involved in the laundering of, bribe payments made to Chadian diplomats …”.

According to the complaint, Griffiths Energy gave Mahamoud Adam Bechir (“Bechir”), Chad’s ambassador to the United States and Canada from approximately 2004 to 2012, and others “valuable company shares in exchange for Bechir exercising his official influence over the award to the company of lucrative oil development rights in Chad.”

The recent action is the second DOJ civil action filed in connection with the Griffiths Energy matter.  (See here).

See here for the prior post regarding the underlying Canadian enforcement action against Griffiths Energy.

*****

As highlighted in this Bloomberg article:

“The Justice Department is seeking to seize $300 million claimed to be the proceeds of an international bribery conspiracy involving two Russian phone companies, as the U.S. joins a group of European nations in a telecom corruption probe. The U.S. claims VimpelCom Ltd., part-owned by Russian billionaire Mikhail Fridman, and Mobile TeleSystems OJSC used a web of shell companies and phony consulting contracts to funnel bribes to a close relative of Uzbekistan’s president, Islam Karimov, in exchange for access to that country’s telecommunications market. The assets sought by the U.S., in a complaint filed Monday in Manhattan federal court, are held in Bank of New York Mellon Corp. in Ireland, Luxembourg and Belgium. VimpelCom said in March 2014 that its Amsterdam headquarters had been raided by Dutch prosecutors and that the U.S. Securities and Exchange Commission demanded documents as part of the probe into its business.”

Fokker DPA Appeal

This previous post concerned the pending D.C. Circuit appeal of the DOJ – Fokker Services deferred prosecution agreement. Recently David Debruin (Jenner & Block), the court appointed amicus, filed this brief.

Regarding the following issue: “whether the District Court abused its discretion by denying the parties’ motion to exclude time under the Speedy Trial Act […] which provides for the exclusion of a period of delay pursuant to a deferred prosecution agreement “with the approval of the court.”, the brief states in pertinent part:

“If the Court reaches the merits, it should hold that the District Court had the authority to consider the substantive fairness of the DPA. Under 18 U.S.C. § 3161(h)(2), a DPA requires “approval of the court.” The plain text of this provision grants a district court the discretion to consider the substantive fairness of a DPA before approving it. The parties argue that a district court may reject a DPA only if it concludes that the parties are using the DPA as a pretext for a continuance, but that artificial restriction on judges’ discretion finds no basis in § 3161(h)(2). The legislative history, structure, and purpose of the Speedy Trial Act similarly confirm a district court’s discretion to consider a DPA’s substantive fairness.

Contrary to the parties’ contentions, the District Court’s rejection of the DPA poses no separation-of-powers problem. The District Court’s order does not force the Government to pursue a criminal prosecution. The Government remains free to negotiate a new DPA, try its case, or dismiss the charges. Prosecutorial discretion does not confer upon the Government the right to force a judge to exclude time from the Speedy Trial Act clock for 18 months. A district court order excluding time under the Speedy Trial Act is a judicial act, and separation-ofpowers principles give a judge the authority and the obligation to exercise independent judgment in performing that judicial act. If the Government had wanted to avoid judicial involvement, it should have signed a non-prosecution agreement; by instead choosing to invoke judicial process and filing a motion to exclude time under the Speedy Trial Act, it cannot now characterize the District Court’s denial of that motion as a separation-of-powers violation.

On the merits, the District Court did not abuse its discretion in rejecting the DPA. FSBV willfully violated the U.S. sanctions regime over 1,000 times and repeatedly provided assistance to the Iranian military. Yet under the DPA, as long as it agreed to pay back the revenues it earned and promised not to break the law, it would get off scot-free. The District Court’s conclusion that the DPA was grossly disproportionate to FSBV’s conduct was entirely reasonable.”

Holder to Covington

Recently Covington & Burling announced:

“Former U.S. Attorney General Eric H. Holder, Jr., is returning to Covington as a partner after more than six years of service as the nation’s top law enforcement officer. Mr. Holder will be resident in the firm’s Washington office and focus on complex investigations and litigation matters, including matters that are international in scope and raise significant regulatory enforcement issues and substantial reputational concerns. […] Mr. Holder was a partner at Covington from 2001 until February 2009, when President Obama appointed and the Senate confirmed him as the nation’s 82nd Attorney General.”

Reading Stack

Gibson Dunn’s Mid-Year FCPA Update is here.

Gibson Dunn’s Mid-Year Update on Corporate NPAs and DPAs is here.

*****

A good weekend to all.