Top Menu

A Focus On DOJ Individual Actions


This recent post focused on SEC individual FCPA actions in 2019 and historically. Today’s post highlights certain facts and figures concerning the DOJ’s prosecution of individuals for Foreign Corrupt Practices Act violations in 2019 and historically.

The key word above is FCPA violations.

Some in the FCPA space include enforcement actions containing non-FCPA charges (often money laundering charges against alleged “foreign officials”) related to an FCPA enforcement action as an individual FCPA enforcement action. While it is fine to track such enforcement actions, calling them FCPA enforcement actions is factually false.

Compared to corporate FCPA enforcement actions, tracking individual FCPA enforcement actions is often more difficult because the DOJ does not publicly announce every individual enforcement action and/or certain matters are filed under seal.

For instance, few tallies of 2019 individual FCPA enforcement actions include Edward Thiessen and Larry Puckett. However, both of these individuals (previously associated with Alstom) were criminally charged by the DOJ with FCPA offenses in the summer of 2019 in connection with the same Indonesia conduct at issue in the 2014 Alstom enforcement action and the Lawrence Hoskins enforcement action that finally went to trial in Fall 2019. Only then, did these enforcement actions become public.

As highlighted numerous times on FCPA Professor over the past several years, the DOJ frequently talks about the importance of individual criminal prosecutions.

In 2019, DOJ officials stated:

“While pursuit of criminal and civil remedies against corporations is important, we should always focus on the individuals responsible for misconduct. Cases against corporate entities allow us to recover fraudulent proceeds, reimburse victims, and deter future wrongdoing. But the deterrent impact on the individual people responsible for wrongdoing is sometimes attenuated in corporate prosecutions. The most effective deterrent to corporate criminal misconduct is identifying the people who commit crimes and sending them to prison.”

In 2018, DOJ officials stated: “focusing on individual wrongdoers is an important aspect of the Department’s FCPA program” and as follows:

“The Criminal Division’s commitment to corporate enforcement has been on full display with our emphasis on individual accountability.  A company only acts through its employees and agents.  It therefore makes sense to focus our investigative efforts on the culpable individuals – both to secure appropriate punishment for the bad actors, and to have the greatest impact on preventing and deterring corruption.”

In 2017, DOJ officials stated: “The DOJ is committed to holding  individuals accountable for criminal activity.” “Effective deterrence of corporate corruption requires prosecution of culpable individuals.  We should not just announce large corporate fines and celebrate penalizing shareholders.”

Previously, DOJ officials have stated that: “certainly…there has been an increased emphasis on, let’s get some individuals” and that it is “very important for [the DOJ] to hold accountable individuals who engage in criminal misconduct in white-collar (cases), as we do in every other kind of crime.”

Likewise, the DOJ’s FCPA Unit Chief stated that the DOJ is “very focused” on prosecuting individuals as well as companies and that “going after one or the other is not sufficient for deterrence purposes.”

Against this backdrop, what do the facts actually show?

Since 2000, the DOJ has charged 206 individuals with FCPA criminal offenses.  The breakdown is as follows.

  • 2000 – 0 individuals
  • 2001 – 8 individuals
  • 2002 – 4 individuals
  • 2003 – 4 individuals
  • 2004 – 2 individuals
  • 2005 – 3 individuals
  • 2006 – 6 individuals
  • 2007 – 7 individuals
  • 2008 – 14 individuals
  • 2009 – 18 individuals
  • 2010 – 33 individuals (including 22 in the Africa Sting case)
  • 2011 – 10 individuals
  • 2012 – 2 individuals
  • 2013 – 12 individuals
  • 2014 – 10 individuals
  • 2015 – 8 individuals
  • 2016 – 8 individuals
  • 2017 – 18 individuals
  • 2018 – 13 individuals
  • 2019 – 26 individuals

An analysis of the numbers reveals some interesting points.

Most of the individuals – 185 (or 90%) were charged since 2006.  Thus, on one level the DOJ is correct when it states that there has been an “increased emphasis” on individual prosecutions – at least as measured against the historical average given that between 1978 and 1999, the DOJ charged 38 individuals with FCPA criminal offenses.

Yet on another level, a more meaningful level given that there was much less overall enforcement of the FCPA between 1978 and 1999, the DOJ’s statements about its focus on individuals represents hollow rhetoric as demonstrated by the below figures.

Of the 185 individuals criminally charged with FCPA offenses by the DOJ since 2006:

  • 22 individuals were in the failed (and manufactured) Africa Sting case;
  • 15 individuals in connection with PDVSA matters;
  • 9 individuals were in the Haiti Teleco case;
  • 8 individuals were in connection with the Control Components case;
  • 8 individuals were in connection with the Siemens case;
  • 6 individuals were in connection with the Alstom case;
  • 5 individuals were associated with DF Group in the Indian mining licenses case;
  • 5 individuals were associated with Direct Access Partners;
  • 5 individuals were associated with Rolls Royce;
  • 4 individuals were in connection with the Lindsey Manufacturing case;
  • 4 individuals were  in connection with the LatinNode / Hondutel case;
  • 4 individuals were in connection with the Nexus Technologies case;
  • 4 individuals were in connection with the BizJet case; and
  • 4 individuals were associated with Hunt Pan Am Airlines.

In other words, approximately 45% of the individuals charged by the DOJ with FCPA criminal offenses since 2006 have been in just nine core actions and approximately 55% of the individuals charged by the DOJ since 2006 have been in just fourteen core actions. This has been previously highlighted numerous times on these pages as the clustering phenomenon of DOJ individual FCPA actions.

Considering that there has been 119 corporate DOJ FCPA enforcement actions since 2006, this is a rather remarkable statistic.  Of the 119 corporate DOJ FCPA enforcement actions, 93 (or 78%) have not (at least yet) resulted in any DOJ FCPA charges against company employees.

Compare this figure to FCPA enforcement prior to 2004.

As highlighted in this prior post, from 1977 to 2004 approximately 90% of DOJ criminal corporate FCPA enforcement actions RESULTED in related FCPA charges against company employees.

Why the change?

Read the article “Measuring the Impact of NPAs and DPAs on FCPA Enforcement” in which a hypothesis is tested and to see comprehensive charts detailing every DOJ corporate FCPA enforcement and whether the action also resulted in related charges against company employees.

In short, and as demonstrated by the statistics, DOJ FCPA individual enforcement actions are significantly skewed by a small handful of enforcement actions and the reality is that 78% of DOJ corporate enforcement actions since 2006 have not (at least yet) resulted in any DOJ FCPA charges against company employees.

Indeed, since the DOJ supposedly renewed its emphasis on individual accountability with the Yates Memo release in September 2015, there have been 38 DOJ corporate enforcement actions. At present, 31 of those actions (82%) have lacked any related FCPA charges against company employees. The only DOJ corporate FCPA enforcement actions since the Yates Memo to have resulted in related FCPA charges against company employees were Embraer, Keppel Offshore, SBM Offshore, Rolls-Royce, Transport Logistics Int’l, Cognizant Technologies, and TechnipFMC.

FCPA Institute - Zoom (April 23-25)

Elevate your FCPA knowledge and practical skills. Nine hours of integrated and cohesive instruction led by Professor Koehler (an FCPA expert with teaching experience). Learn more, spend less. Professional credential available.

Learn More and Register

Powered by WordPress. Designed by WooThemes