This previous post highlighted various corporate enforcement statistics from 2017 and this post goes in-depth into various facts and figures relevant to DOJ FCPA enforcement in 2017. (See here for a similar post from 2016, here for a similar post from 2015, here for a similar post from 2014, here for a similar post from 2013, here for a similar post from 2012, here for a similar post from 2011, and here from 2010).
Settlement Amounts and Specifics
In 2017, the DOJ brought 9 corporate FCPA enforcement actions.
By comparison in 2016 the DOJ brought 13 corporate FCPA enforcement actions; in 2015 the DOJ brought 2 corporate FCPA enforcement actions; in 2014 the DOJ brought 7 corporate FCPA enforcement actions; in 2013 the DOJ brought 7 corporate enforcement action; in 2012 the DOJ brought 9 corporate FCPA enforcement actions; in 2011 the DOJ brought 11 corporate enforcement actions; and in 2010 the DOJ brought 17 corporate enforcement actions. (Note: these figures use the “core” approach to FCPA statistics – see here for the prior post – an approach also endorsed by the DOJ – see here).
In the 9 corporate FCPA enforcement actions from 2017, the DOJ collected approximately $845 million in criminal fines. (Note: the $845 million figure represents net FCPA settlement amounts after accounting for credits or deductions in the Telia and Keppel Offshore & Marine enforcement actions for related foreign law enforcement actons).
By comparison, in the 13 corporate FCPA enforcement actions from 2016, the DOJ collected approximately $1.17 billion in criminal fines; in the 2 corporate FCPA enforcement actions from 2015, the DOJ collected approximately $24.2 million in criminal fines; in the 7 corporate FCPA enforcement actions from 2014, the DOJ collected approximately $1.25 billion in criminal fines; in the 7 corporate FCPA enforcement actions from 2013, the DOJ collected approximately $420 million in criminal fines; in 2012, the DOJ collected approximately $142 million in criminal fines; in 2011, the DOJ collected approximately $355 million in criminal fines ($504 million including the $149 million forfeiture in the Jeffrey Tesler individual enforcement action); and in 2010, the DOJ collected approximately $870 million in criminal fines.
Corporate DOJ FCPA enforcement in 2017 ranged from $275 million (Telia – net amount) to $4 million (CDM Smith).
In 6 of the 9 enforcement actions, the resolution documents set forth a sentencing guidelines range. (The Linde and CDM Smith declination & disgorgement letters and the Las Vegas Sands NPA do not mention a guidelines range).
Of the 6 enforcement actions in which an analysis was possible, the DOJ agreed to a criminal fine below the minimum amount suggested by the guidelines in 5 of the enforcement actions. The only criminal fine amount in the guidelines range was in the Zimmer Biomet enforcement action (an instance of an FCPA repeat offender).
Corporate v. Individual Prosecutions
In the 9 corporate DOJ enforcement actions in 2017, 3 (33%) resulted in related DOJ prosecutions of company employees.
In 2017, the DOJ brought or announced individual FCPA charges against 18 individuals in 8 core actions
Stay tuned for future posts specifically about DOJ individual FCPA enforcement actions in 2017 and historically.
Resolution Vehicles
The 9 corporate FCPA enforcement actions by the DOJ in 2017 utilized a variety of resolution vehicles:
- actual criminal charges and plea agreements (portions of the Zimmer Biomet; Telia; SBM Offshore; and Keppel Offshore & Marine enforcement actions)
- deferred prosecution agreements (SQM; Rolls-Royce; and portions of the Zimmer Biomet; Telia; SBM Offshore; and Keppel enforcement actions);
- non-prosecution agreement (Las Vegas Sands); and
- declinations with disgorgement / forfeiture (Linde; CDM Smith)
In total, 9 of the 9 corporate enforcement actions (100%) involved, in whole or in part, an NPA, DPA or declination with disgorgement.
By way of comparison, in 2016 92% of DOJ corporate enforcement actions were resolved via an NPA, DPA or declination with disgorgement; in 2015 100% of DOJ corporate enforcement actions were resolved via an NPA or DPA; in 2014 71% of DOJ corporate enforcement actions included an NPA or DPA; in 2013, 100% of corporate DOJ enforcement actions involved either an NPA or DPA; in 2012 100% of corporate DOJ enforcement actions involved either an NPA or a DPA; in 2011 82% of corporate DOJ enforcement actions involved either an NPA or DPA; and in 2010 94% of corporate DOJ enforcement actions involved either an NPA or DPA.
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ViewVoluntary Disclosures
Of the 9 DOJ corporate enforcement actions in 2017, 3 enforcement actions (33%) were the result of a voluntary disclosure.
By way of comparison, in 2016 38% of DOJ corporate enforcement actions were the result of a voluntary disclosure; in 2015, 50% of corporate FCPA enforcement actions were the result of a voluntary disclosure; in 2014, 29% of corporate FCPA enforcement actions were the result of a voluntary disclosures; in 2013, 57% of corporate FCPA enforcement actions were the result of a voluntary disclosure or the direct result of a related voluntary disclosure; in 2012, 78% of corporate FCPA enforcement actions were the result of a voluntary disclosure or casually related to previous voluntary disclosures; in 2011, 73% of corporate FCPA enforcement actions were the result of corporate voluntary disclosures.
Monitors
Of the 9 corporate DOJ FCPA enforcement actions in 2017, 3 (33%) resulted in a formal corporate monitor. (Note: included in this figure is the Las Vegas Sands enforcement action. The DOJ’s NPA notes: “in connection with the SEC Resolution, the Company has retained an independent compliance consultant, and agreed that it will submit copies of all reports of the independent compliance consultant to the Fraud Section within three calendar days of the Company’s receipt of such reports until the completion of the independent compliance consultant’s engagement, followed by self-reporting to the Fraud Section pursuant to the terms described herein …”).
By way of comparison, 54% of DOJ corporate FCPA enforcement actions in 2016 resulted in a formal corporate monitor; in 2015 50% of enforcement actions resulted in a corporate monitor; in 2014 14% of enforcement actions resulted in a corporate monitor; in 2013 57% of enforcement actions resulted in a corporate monitor; in 2012 33% of enforcement actions resulted in a corporate monitor; in 2011 9% of enforcement actions resulted in a corporate monitor; and in 2010 41% of enforcement actions resulted in a corporate monitor.
This remainder of this post provides an overview of corporate DOJ FCPA enforcement in 2017.
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Keppel Offshore & Marine (Dec. 22nd)
See here, here and here for prior posts
Charges: Criminal information as to Keppel Offshore & Marine US (KOM USA) charging conspiracy to violate the FCPA’s anti-bribery provisions; criminal information as to Keppel (KOM) charging conspiracy to violate the FCPA’s anti-bribery provisions
Resolution Vehicle: As to KOM USA, plea agreement; as to KOM deferred prosecution agreement
Guidelines Range: $563 million to $1.1 billion
Settlement: $422 million reduced to $105.5 million after accounting for various credits for law enforcement actions in Singapore and Brazil
Origin: Foreign law enforcement action
Monitor: No
Individuals Charged by DOJ: Yes
SBM Offshore (Nov. 29th)
See here, here and here for prior posts
Charges: Criminal information as to SBM Offshore USA Inc. (SBM USA) charging conspiracy to violate the FCPA’s anti-bribery provisions; criminal information as to SBM Offshore charging conspiracy to violate the FCPA’s anti-bribery provisions
Resolution Vehicle: As to SBM USA, plea agreement; as to SBM Offshore deferred prosecution agreement
Guidelines Range: $4.5 billion to $9.0 billion
Settlement: $238 million
Origin: Voluntary disclosure (the DPA states: the Company did not receive voluntary disclosure credit because, although it voluntarily brought the conduct to the attention of the Fraud Section and to Dutch authorities, the disclosure did not occur for approximately one year and thus was not timely)
Monitor: No
Individuals Charged by DOJ: Yes
Telia (Sept. 21st)
See here and here for prior posts
Charges: Criminal information as to Coscom LLC charging conspiracy to violate the FCPA’s anti-bribery provisions; criminal information as to Telia charging conspiracy to violate the FCPA’s anti-bribery provisions
Resolution Vehicle: As to Coscom, plea agreement; as to Telia deferred prosecution agreement
Guidelines Range: $731.4 million to $1.46 billion.
Settlement: $548.6 million reduced to approximately $275 million after accounting for various credits and deductions for contemplated Swedish and Dutch enforcement actions
Origin: Foreign media reporting
Monitor: No
Individuals Charged by DOJ: No
CDM Smith Inc. (June 21st)
See here for the prior post
Charges: None
Resolution Vehicle: “Declination” with disgorgement
Guidelines Range: Not set forth in the letter agreement
Settlement: $4 million
Origin: Voluntary disclosure
Monitor: No
Individuals Charged: No
Linde North America Inc. / Linde Gas North America LLC (June 16th)
See here and here for the prior posts
Charges: None
Resolution Vehicle: “Declination” with disgorgement and forfeiture
Guidelines Range: Not set forth in the letter agreement
Settlement: $11.2 million ($7.8 million in disgorgement, $3.4 million in forfeiture)
Origin: Voluntary disclosure
Monitor: No
Individuals Charged: No
Las Vegas Sands (Jan. 19th)
See here for the prior post
Charges: None
Resolution Vehicle: Non-prosecution agreement
Guidelines Range: Not set forth in the NPA, but it does state “the Company received an aggregate discount of 25% off the bottom of the U.S. Sentencing Guidelines fine range.”
Penalty: $6.96 million
Origin: Likely civil litigation (see here for the prior post); the prior SEC action stated “In connection with the investigation by the Staff, the LVSC Audit Committee retained outside counsel to conduct an internal investigation.”
Monitor: No, but the NPA states “in connection with the SEC Resolution, the Company has retained an independent compliance consultant, and agreed that it will submit copies of all reports of the independent compliance consultant to the Fraud Section within three calendar days of the Company’s receipt of such reports until the completion of the independent compliance consultant’s engagement, followed by self-reporting to the Fraud Section pursuant to the terms described herein …”
Individuals Charged: No
Rolls Royce (Jan. 17th)
See here and here for prior posts
Charges: Conspiracy to violate the FCPA’s anti-bribery provisions
Resolution Vehicle: Deferred Prosecution Agreement
Guidelines Range: $260.6 million to $521.3 million
Penalty: $170 million
Origin: The DPA states: “the Company did not voluntarily or timely disclose [to the DOJ], as the Company’s disclosures occurred only after media reports first alleging corruption by the Company and the U.K. Serious Fraud Office initiated an inquiry into the Company’s misconduct …”.
Monitor: No
Individuals Charged: No
SQM (Jan. 17th)
See here and here for prior posts
Charges: Books and records and internal controls violations
Resolution Vehicle: Deferred Prosecution Agreement
Guidelines Range: $20.6 million to $41.3 million
Penalty: $15.5 million
Origin: The SEC administrative order states: “In 2015, in response to inquiries from Chilean tax authorities and related news articles in the Chilean press, SQM conducted an internal investigation based on allegations that SQM had taken improper tax deductions for payments to certain vendors.”
Monitor: Yes
Individuals Charged: No
Zimmer Biomet (Jan. 12th)
See here and here for prior posts
Charges: Zimmer Biomet – willfully failing to implement a system of internal accounting controls; JERDS Luxembourg Holding S.A.R.L – books and records violations
Resolution Vehicle: Zimmer Biomet – Deferred Prosecution Agreement; JERDS – plea agreement
Guidelines Range: $11.6 to $23.3 million
Penalty: $17.4 million
Origin: Breach of prior DPA
Monitor: Yes
Individuals Charged: No
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