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DOJ FCPA Enforcement – 2020 Year In Review

DOJ

This recent post highlighted SEC Foreign Corrupt Practices Act enforcement against issuers in 2020.

Today’s post focuses on the other FCPA enforcement agency – the Department of Justice – and highlights various facts and figures relevant to DOJ FCPA enforcement in 2020 against business organizations. (See here for a similar post from 2019; here for a similar post from 2018; here from 2017, here from 2016, here from 2015, here from 2014, here from 2013, here from 2012, here from 2011, and here from 2010).

Settlement Amounts and Specifics

In 2020, the DOJ brought 8 corporate FCPA enforcement actions.

By way of comparison:

  • in 2019 the DOJ brought 8 corporate FCPA enforcement actions;
  • in 2018 the DOJ brought 8 corporate FCPA enforcement actions;
  • in 2017 the DOJ brought 9 corporate FCPA enforcement actions;
  • 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 FCPA enforcement actions;
  • in 2012 the DOJ brought 9 corporate FCPA enforcement actions;
  • in 2011 the DOJ brought 11 corporate FCPA enforcement actions; and
  • in 2010 the DOJ brought 17 corporate FCPA 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 8 corporate FCPA enforcement actions from 2020, the DOJ collected approximately $2.10 billion.

(Note: this figure represents net FCPA settlement amounts after accounting for various credits or deductions in certain enforcement actions for related law enforcement actions).

By way of comparison:

  • in the 8 corporate FCPA enforcement actions from 2019, the DOJ collected approximately $1.62 billion;
  • in the 8 corporate FCPA enforcement actions from 2018, the DOJ collected approximately $618 million;
  • in the 8 corporate FCPA enforcement actions from 2017, the DOJ collected approximately $845 million;
  • in the 13 corporate FCPA enforcement actions from 2016, the DOJ collected approximately $1.17 billion;
  • in the 2 corporate FCPA enforcement actions from 2015, the DOJ collected approximately $24.2 million;
  • in the 7 corporate FCPA enforcement actions from 2014, the DOJ collected approximately $1.25 billion;
  • in the 7 corporate FCPA enforcement actions from 2013, the DOJ collected approximately $420 million;
  • in the 9 corporate FCPA enforcement actions from 2012, the DOJ collected approximately $142 million;
  • in the 11 corporate FCPA enforcement actions from 2011, the DOJ collected approximately $355 million;
  • in the 17 corporate FCPA enforcement actions from 2010, the DOJ collected approximately $870 million;

Corporate DOJ FCPA enforcement in 2020 ranged from $1.263 billion (Goldman) to $16.6 million (Sargeant Marine).

Corporate v. Individual Prosecutions

In the 8 corporate DOJ enforcement actions in 2020, 4 (50%) have resulted, at present, in related DOJ FCPA charges against company employees.

Stay tuned for future posts specifically about DOJ individual FCPA enforcement actions in 2020 and historically.

Resolution Vehicles

The 8 corporate FCPA enforcement actions by the DOJ in 2020 utilized a variety of resolution vehicles:

  • actual criminal charges and plea agreements (Sargeant Marine, J&F Investimentos, portions of the Goldman enforcement action); and
  • deferred prosecution agreements (Airbus, Novartis, Herbalife, Beam, Vitol, and portions of the Goldman enforcement action);

In total, 6 of the 8 corporate enforcement actions (75%) involved, in whole or in part, an alternative resolution vehicle (DPA).

By way of comparison:

  • in 2019, 100% of DOJ corporate enforcement actions involved an NPA, DPA or declination with disgorgement;
  • in 2018, 100% of DOJ corporate enforcement actions involved an NPA, DPA or declination with disgorgement;
  • in 2017, 100% of DOJ corporate enforcement actions involved an NPA, DPA or declination with disgorgement;
  • in 2016 92% of DOJ corporate enforcement actions involved an NPA, DPA or declination with disgorgement;
  • in 2015 100% of DOJ corporate enforcement actions involved an NPA or DPA;
  • in 2014 71% of DOJ corporate enforcement actions involved an NPA or DPA;
  • in 2013, 100% of corporate DOJ enforcement actions involved an NPA or DPA;
  • in 2012 100% of corporate DOJ enforcement actions involved an NPA or a DPA;
  • in 2011 82% of corporate DOJ enforcement actions involved an NPA or DPA; and
  • in 2010 94% of corporate DOJ enforcement actions involved an NPA or DPA.

Voluntary Disclosures

Of the 8 DOJ corporate enforcement actions in 2020, 1 (13%) were the result of a voluntary disclosure.

By way of comparison:

  • in 2019, 37% of DOJ corporate enforcement actions were the result of a voluntary disclosure;
  • in 2018 25% of DOJ corporate enforcement actions were the result of a voluntary disclosure;
  • in 2017 33% of DOJ corporate enforcement actions were the result of a voluntary disclosure;
  • 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 8 corporate FCPA enforcement actions in 2020, 0 (0%) resulted in a formal corporate monitor imposed by the DOJ.

(Note: in two enforcement actions (Airbus and J&F Investimentos) the DOJ concluded that a formal monitor was unnecessary because the company already had monitoring requirements imposed upon it as a result of a related foreign law enforcement action).

By way of comparison:

  • in 2019 50% of corporate FCPA enforcement actions resulted in a formal corporate monitor;
  • in 2018 12% of corporate FCPA enforcement actions resulted in a formal corporate monitor;
  • in 2017 33% of corporate FCPA enforcement actions resulted in a formal corporate monitor;
  • in 2016 54% of corporate FCPA enforcement actions resulted in a formal corporate monitor;
  • in 2015 50% of corporate FCPA enforcement actions resulted in a formal corporate monitor;
  • in 2014 14% of corporate FCPA enforcement actions resulted in a formal corporate monitor;
  • in 2013 57% of corporate FCPA enforcement actions resulted in a formal corporate monitor;
  • in 2012 33% of corporate FCPA enforcement actions resulted in a formal corporate monitor;
  • in 2011 9% of corporate FCPA enforcement actions resulted in a formal corporate monitor; and
  • in 2010 41% of corporate FCPA enforcement actions resulted in a formal corporate monitor.

This remainder of this post provides an overview of corporate DOJ FCPA enforcement in 2020.

Airbus (Jan. 31)

See here and here for prior posts.

Charges: Criminal information charging conspiracy to violate the FCPA’s anti-bribery provisions.

Resolution Vehicle: Deferred Prosecution Agreement

Guidelines Range: $2.8 billion – $5.6 billion

Settlement: $294 million (after the DOJ allowed credits for satisfaction of payments to other foreign law enforcement agencies)

Origin: Foreign law enforcement investigation (prompted by the company seeking export credit financing)

Monitor: No

Individuals Charged: No

Novartis (June 25)

See here and here for prior posts.

Charges: As to Novartis Hellas S.A.C.I. (Novartis Greece), a criminal information charging one count of conspiracy to violate the FCPA’s anti-bribery provisions and one count of conspiracy to violate the FCPA’s books and records provisions. As to Alcon Pte Ltd., a subsidiary of Novartis at the time of the misconduct, a criminal information charging conspiracy to violate the books and records provisions.

Resolution Vehicles: Deferred Prosecution Agreements

Guidelines Range: As to Novartis Greece, $180 – $360 million. As to Alcon, $11.9 – $23.8 million.

Settlement: Novartis Greece – $225 million. Alcon – $8.9 million.

Origin: Based on the company’s disclosure, apparent foreign law enforcement investigation and/or subpoeneas and document requests from the DOJ/SEC.

Monitor: No

Individuals Charged: No

Herbalife (August 28th)

See hereherehere and here for prior posts.

Charges: Criminal information charging one count of conspiracy to violate the FCPA’s books and records provisions

Resolution Vehicle: Deferred Prosecution Agreement

Guidelines Range: $74.3 million – $148.6 million

Settlement: $55.7 million

Origin: The company previously disclosed: “The SEC has requested from the Company documents and other information relating to the Company’s anti-corruption compliance in China and the Company is conducting its own review. The Company has discussed the SEC’s investigation and the Company’s review with the Department of Justice. The company is cooperating with the SEC’s investigation and cannot predict the eventual scope, duration, or outcome of the matter at this time.”

Monitor: No

Individuals Charged: Yes

Sargeant Marine (Sept. 22)

See here and here for prior posts.

Charges: Criminal information charging one count of conspiracy to violate the FCPA’s anti-bribery provisions.

Resolution Vehicle: Plea Agreement

Guidelines Range: $$120 million – $240 million.

Settlement: $90 million reduced to $16.6 million based on inability to pay

Origin: Unclear

Monitor: No

Individuals Charged: Yes

J&F Investimentos  (Oct. 14th)

See here and here for prior posts.

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

Resolution Vehicle: Plea Agreement

Guidelines Range: $284.9 million – $569.9 million

Settlement: Net $128.2 million (pursuant to the plea agreement J&F will also pay $128.2 million to Brazilian authorities).

Origin: Brazil law enforcement action

Monitor: No

Individuals Charged: No

Goldman Sachs  (Oct. 22nd)

See hereherehere and here for prior posts.

Charges: As to Goldman Sachs, conspiracy to violate the FCPA’s anti-bribery provisions; as to Goldman Sachs (Malaysia) Sdn. Bhd., conspiracy to violate the FCPA’s anti-bribery provisions.

Resolution Vehicle: As to Goldman Sachs, deferred prosecution agreement; as to Goldman Sachs (Malaysia), plea agreement.

Guidelines Range: $2.57 billion to $5.14 billion

Settlement: Net $1.262 billion (after accounting for credits and offsets for related foreign law enforcement actions).

Origin: DOJ investigation in the aftermath of related Malaysia and other international law enforcement investigations related to 1Malaysia Development Bhd. or 1MDB.

Monitor: No

Individuals Charged: Yes

Beam  (Oct. 27th)

See here and here for prior posts.

Charges: Conspiracy to violate the FCPA’s anti-bribery, books and records, and internal controls provisions.

Resolution Vehicle: Deferred prosecution agreement.

Guidelines Range: $21.7 to $43.5 million

Settlement: $19.6 million

Origin: The enforcement action concerned the same core conduct as the SEC’s 2018 enforcement action against the company. In that enforcement action, the SEC stated that the company voluntarily disclosed. However, in the DOJ enforcement action, the DOJ stated: “the Company did not receive voluntary disclosure credit … because it did not timely disclose to the DOJ.”

Monitor: No

Individuals Charged: No

Vitol  (Dec. 3rd)

See herehere, and here for prior posts.

Charges: Two counts of conspiracy to violate the FCPA’s anti-bribery provisions.

Resolution Vehicle: Deferred prosecution agreement.

Guidelines Range: $180 – $360 million

Settlement: Net $90 million (after accounting for credits and offsets for related U.S. and foreign law enforcement actions).

Origin: Brazil law enforcement action.

Monitor: No

Individuals Charged: Yes (in connection with a portion of the conduct at issue, in September 2020 the DOJ criminally charged Javier Aguilar – see here).

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