Yesterday, the DOJ announced [1] that Deck Won Kang pleaded guilty to a criminal information [2] charging him with one count of violating the FCPA’s anti-bribery provisions. As discussed below, the enforcement action involved a rather unique scenario in that Kang allegedly promised things of value to a “foreign official” after the individual left public office.
According to the criminal information, Kang (a U.S. citizen who controlled two closely held companies with principal places of business in New Jersey) engaged in a bribery scheme in which he paid bribes to high-ranking official (“Official 1”) in the Korean Navy and a procurement official for the Defense Acquisition Program Administration (DPA) – a state-owned and state-controlled agency within South Korea’s Ministry of National Defense that was responsible for the procurement of munitions and military equipment and supplies for the Korean Armed Forces.
According to the information, in 2009 DAPA launched an initiative to update the Korean Navy’s fleet of ships and as part of the initiative DAPA solicited bids for contracts to supply advanced technology including sonor equipment and remote-operated vehicles.
The information alleges that:
- Kang paid bribes to Official 1 in exchange for Official 1’s influence to affect and influence DAPA’s decisions: (a) awarding contracts to Kang’s companies; and (b) enabling Kang’s companies to retain the contracts;
- Kang promised to provide Official 1 with something of value in exchange for Official 1’s assisting Kang and his companies in obtaining DAPA contracts, including the provision of something of value after Official 1 left public office;
- In 2010, Official 1 provided Kang with non-public information relating to the contracts in furtherance of Kang’s companies obtaining the contracts;
- Kang made multiple payments to Official 1 in order to fulfill his promise including – following Official 1’s retirement from DAPA, Kang caused eight bribe payments totaling $100,000 to be wired from a bank account controlled by Kang to a bank account in Australia for the benefit of Official 1.
As highlighted in this article, in 2019 DAPA sued entities associated with Kang (GMB USA Inc., Hackenco, Primacy Engineering and DBNJW) “for allegedly selling the nation $75 million in faulty military equipment and using millions of the foreign government’s funds for personal spending and real estate ventures.”
[3]