In the modern era of FCPA enforcement, most DOJ FCPA enforcement actions against business organizations do not involve related criminal charges against individuals associated with the organization. (See here).
When individuals associated with the company are also charged – based on the same core conduct alleged, in whole or in part, in the corporate action – the process generally occurs in one of three ways.
The corporate action and the individual action(s) occur on the same day.
The corporate action occurs first, followed (sometimes by months or longer) the individual action(s).
The individual action(s) occur first, followed (sometimes by months or even years) the corporate action.
As to the later, there are several recent examples.
For instance, in September 2020 the DOJ announced that Javier Aguilar (a former employee of Vitol Inc.) was criminally charged for “his alleged participation in a five-year international bribery and money laundering scheme involving corrupt payments to Ecuadorian officials.” (See here). In December 2020, Vitol resolved an FCPA enforcement action based on the same core conduct. (See here).
In 2018 individuals associated with Goldman Sachs were criminally charged with FCPA offenses for paying bribes to various Malaysian and Abu Dhabi officials in connection with 1Malaysia Development Berhad (1MDB), Malaysia’s state-owned and state-controlled investment development company. The individuals were also charged with conspiring to launder billions of dollars embezzled from 1MDB. Based on the same core conduct, nearly two years later Goldman Sachs resolved an FCPA enforcement action.
In 2017, the DOJ announced that two former executives at a Dutch oil and gas services company SBM Offshore pleaded guilty to conspiracy to violate the FCPA for their roles in a scheme to bribe foreign government officials in Brazil, Angola and Equatorial Guinea. (See here). Several weeks later, based on the same core conduct, SBM resolved an FCPA enforcement action. (See here).
In mid-2013, the DOJ announced that various current and former employees of Alstom resolved a Foreign Corrupt Practices Act enforcement action in connection with the Tarahan power project in Indonesia. The underlying charging documents were from 2012. Thereafter, in 2013 additional individuals associated with Alstom were also charged. (See here). In late 2014, Alstom resolved an FCPA enforcement action regarding alleged conduct around the world including in Indonesia in connection Tarahan power contract. (See here).
Several other examples could also be cited and the point is that individual FCPA charges of company employees followed by the company resolving an FCPA enforcement action based on the same core conduct is not uncommon.
As highlighted in this prior post, in August 2024 the DOJ in the Biden administration announced that a “federal grand jury in the Southern District of Florida returned an indictment … charging three executives of an election voting machine and service provider company and a former Chairman of the Commission on Elections (COMELEC) of the Republic of the Philippines for their roles in an alleged bribery and money laundering scheme to retain and obtain business related to the 2016 Philippine elections. […] These bribes were allegedly paid to obtain and retain business related to providing voting machines and election services for the 2016 Philippine elections and to secure payments on the contracts, including the release of value added tax payments.” Although not mentioned in the indictment, the company at issue was obviously Smartmatic (and related entities).
As highlighted in this recent post, last week – based on the same core conduct alleged in the individual enforcement action – Smartmatic was also criminally charged with conspiracy to violate the FCPA’s anti-bribery provisions, money laundering conspiracy, and money laundering. (See here for the DOJ release).
According to a partisan commentator in the FCPA space, this was “troubling” and the question was posed: “well, why? Why Smartmatic, and why now?”
A potential answer, according to the commentator: “given Trump’s vengeful nature and corrupt impulses, the appearance of vindictive prosecution is very real, and the department isn’t doing much to dissuade anyone from that fear.” (emphasis in original).
The apparent proof according to the commentator: “The cloud hanging over this case is that perhaps the Trump Administration indicted Smartmatic because Smartmatic is locked in bitter civil litigation with Fox News, and Fox News is a valuable piece of President Trump’s political apparatus.”
Yes, it is true, as discussed in this prior post, that 2010 was the last time a business organization was criminally indicted for FCPA offenses (as opposed to a criminal information / complaint resolved through a plea agreement or deferred prosecution agreement; non-prosecution agreement; or declination with disgorgement).
However, based on statements made by Smartmatic representatives last week, it is obvious that the company was under FCPA scrutiny for several years and according to a knowledgeable source the company was offered a resolution path short of criminal indictment. That the company – no doubt advised by competent counsel – refused to settle and appears poised to put the DOJ to its burden of proof based on the facts and law will be interesting to follow given that most companies under FCPA scrutiny “roll over and play dead” with the goal of getting rid of the DOJ as quickly and efficiently as possible.
Yet, according to the partisan commentator, “the fundamental problem here is that nobody can trust the Trump 2.0 Administration to act consistently and honestly, because Trump himself is not a consistent and honest person.” (emphasis in original).
See here for perhaps most dim-witted 70 seconds of FCPA commentary in existence?
