Today’s post is from Cuneyt Akay (Greenberg Traurig)
As loyal readers of this website know, every year FCPA Professor makes a plea for FCPA commentators to adopt a common language for tracking FCPA corporate enforcement actions. (See here for instance and here for the article “A Common Language to Remedy Distorted FCPA Enforcement Statistics”).
Well, how about a common language and approach for tracking individual enforcement cases as well?
Reviewing various published year-end FCPA summaries shows that tracking of individual enforcement actions is all over the board. For 2019, some commentators had the number of individual enforcement actions as low as the mid-twenties while others had numbers in the forties.
So, my plea is that we also bring some consistency and standardization to tracking individual enforcement cases. Set forth below is the methodology I utilize to track and count the number of FCPA individual enforcement cases in a year.
Core Approach – Count the Individual (Not the Number of Actions)
As Professor Koehler has long suggested, “[t]he most reliable and accurate way to keep FCPA enforcement statistics is by using the ‘core’ approach which focuses on unique instances of FCPA scrutiny” because the core approach does not double count “DOJ and SEC actions involving the same core conduct.” I agree. The same holds true for counting individual enforcement actions.
For example, in 2019, three individuals were charged with FCPA violations by both the DOJ and SEC for actions involving the same alleged bribery conduct. The most accurate way to count these enforcement actions is to consider them as three individual enforcement actions, not as six.
Announced Date Approach
A challenge in tracking individual enforcement actions is deciding what year to use for each case. First, as we all know, cases take a long time to resolve. FCPA charges are often announced in one year, but the case is subsequently resolved in a future year. Second, for prosecutorial reasons, the government may file charges against an individual, but not publicly announce or unseal those charges until much later. For example, just last month, the DOJ publicly announced the unsealing of indictments against three individuals from 2015.
Without a standardized approach to tracking individual enforcement actions, it is easy to double count cases across years. In the example above, someone could easily count the indictment date (2015) and the announcement date (2020) for these three cases, which would skew the data. To ensure individual enforcement actions are not double counted, I utilize the date when the government publicly announced the charges. This approach ensures that each individual enforcement action is only counted once and is easy to apply consistently (e.g. using the date of the DOJ press release or unsealing date instead of the indictment date when those differ).
One challenge with this approach is there are times when the news media or FCPA commentators report a case before the DOJ announces the charges. For example, during the Lawrence Hoskins trial last year, it was reported that Larry Puckett and Edward Thiessen, both witnesses in the trial, had already pleaded guilty to FCPA violations themselves. Despite both agreeing to guilty pleas years before the Hoskins trial, those pleadings were not filed until July 2019 and the DOJ did not publicly acknowledge those cases until early 2020.
Differentiate Between FCPA Charges and FCPA-Related Charges
By using the core approach and the announced date, we can accurately and consistently track individual enforcement. One common issue is that many FCPA commentators, and even the DOJ’s own FCPA website, do not clearly differentiate between FCPA charges against individuals and non-FCPA charges arising from FCPA investigations. This can lead to confusion and inaccuracies in tracking.
In recent years, the DOJ has charged numerous individuals with non-FCPA charges resulting from both corporate and individual FCPA investigations. It is easiest to categorize these cases as FCPA-related actions. FCPA-related actions typically arise out of FCPA investigations where the DOJ’s jurisdictional reach under the FCPA is not long enough to capture the bribe recipient or bribe facilitators. In these circumstances, the DOJ will often charge individuals with financial crimes, such as money laundering and wire fraud. This approach is how the DOJ can punish foreign official bribe recipients, who otherwise could not be charged with FCPA violations.
For the most accurate tracking, it is important to either (1) differentiate between individuals charged with FCPA violations and those charged with FCPA-related violations or (2) clearly state that the published statistics include both FCPA and FCPA-related individual enforcement actions.
Key Takeaway
Much like Professor Koehler has urged a common language and common tracking of corporate enforcement, it is important to have accurate and reliable statistics involving individual FCPA enforcement actions. Although tracking individual enforcement actions can be tricky, mainly because of how and when the government chooses to publicize cases and release information, it is certainly not impossible. By counting the individual (not the government actions), using the government’s announced date of the charges, and differentiating between FCPA charges and FCPA-related charges, we can accurately and consistently track individual FCPA enforcement actions over time.
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Cuneyt A. Akay is a shareholder at Greenberg Traurig. He is an anti-corruption lawyer focused on helping clients comply with the Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act. Cuneyt designs, builds, and implements effective compliance programs for clients around the world. Cuneyt’s experience includes conducting internal investigations, performing compliance risk assessments, handling pre-and post-acquisition compliance due diligence, training staff and third parties on compliance requirements, and assisting in the monitoring and auditing of anti-corruption programs.
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