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Friday Roundup

More on Major League Baseball’s FCPA scrutiny, Siemens, across the pond, ripple, and for the reading stack.

It’s all here in the Friday roundup.

MLB’s FCPA Scrutiny

This prior post [1] highlighted Major League Baseball’s apparent FCPA scrutiny. According to this Sports Illustrated article [2]:

“Sports Illustrated has learned that the U.S. Department of Justice has begun a sweeping probe into possible corruption tied to the recruitment of international players, centered on potential violations of the Foreign Corrupt Practices Act.


SI has also obtained a thick dossier of documentation that was provided to the FBI at the beginning of the probe. The trove of evidence—the material that largely persuaded the bureau to launch an investigation—includes videotapes, photographs, confidential legal briefs, receipts, copies of player visas and passport documents, internal club emails and private communications by franchise executives in 2015 and 2016.


The dossier given to the FBI suggests the extent to which some MLB personnel are aware of—and brazenly discuss—this unscrupulous culture and the potential for corruption. While both the league office and other teams are mentioned in the files obtained by SI, the Los Angeles Dodgers, a franchise with extensive scouting and development operations in the Caribbean, figure most prominently in the dossier.

Sources told SI that the probe began when a whistle-blowing MLB insider provided the FBI with information last year during spring training. The case eventually landed in Washington D.C. where the Fraud Section of the Department of Justice is headquartered.


Among the witnesses already subpoenaed: player development staffers with ties to the Atlanta Braves, and Manny Paula, a certified agent and cofounder of the MVP Sports Management and Consulting Agency.”



According to this German newspaper [4] report:

“When trading medical devices from Siemens bribes flowed in China for years. This is said by more than 40 judgments of Chinese criminal courts. In almost every case, middlemen had bribed hospital officials to buy Siemens products, such as CT scanners. The judgments were smeared not only with cash, but also with gifts: watches, clothes, cameras, even real estate. In addition, there were shops where two former employees of Siemens had bribed Chinese hospital directors. Many such directors were convicted; to some high prison sentences. A former Siemens employee was given three years probation.

The Munich-based industrial group said on request, a separate, comprehensive analysis of Chinese judgments show that competitors “a similar number of operations exists.” Siemens further stated that “China’s usual middlemen have limited influence”. These companies worked very independently. As a rule, Siemens reviews the books and accounts of middlemen every three years or, more frequently, suspicions.

According to Siemens, the judgments show that the Chinese state is increasingly taking action against corruption. “We welcome and support this development.” Shocked by lawsuits affecting business from 2004 to 2014 , Siemens has been investigating its medical device trading business in China since mid- 2016 . There are two internal audit reports of 7 March 2017 and from 15 . January 2018 , but remain under lock and key. The content of these reports is silent. Siemens has meanwhile drastically reduced the number of middlemen in China, to the current level of around 300 Companies. This happened for several reasons; among other things, to reduce the risk of illegal acts.”

As highlighted in this prior post [5], the still record-setting 2008 FCPA enforcement action against Siemens A.G. was primarily based on the fact that the company had its shares listed on a U.S. exchange and was thus subject to the FCPA’s books and records and internal controls provisions. In 2014 Siemens “delist[ed] its American Depositary Receipts (ADR) from the New York Stock Exchange and terminated “its reporting obligations (deregistration) to the American Securities and Exchange Commission (SEC).”

A delisting of course does not remove Siemens from the reach of the FCPA.  There still is the 78dd-3 prong of the FCPA, but the jurisdictional reach of it is the most demanding found in the FCPA. It requires “while in the territory of the United States, corruptly to make use of the mails or any means or instrumentality of interstate commerce or to do any other act in furtherance of” of a bribery scheme.

Across the Pond

The U.K. Serious Fraud office recently announced [6]:

“Natalie Pearce has been charged by requisition with conspiracy to make corrupt payments contrary to Section 1 of the Criminal Law Act 1977 and Section 1 of the Prevention of Corruption Act 1906. These charges follow those already made against Dr Cansun Guralp and Andrew Bell who appeared before Westminster Magistrates’ Court in August earlier this year. The SFO alleges that three individuals conspired together to corruptly make payments to a public official and employee of the Korean Institute of Geoscience and Mineral Resources (KIGAM).”

For prior posts on the underlying enforcement action, see here [7] and here [8].


As highlighted here [9]: “[Och-Ziff] has reached a $28.75 million class-action settlement with shareholders who said the company misled them about U.S. probes into its involvement in alleged bribery in five African countries.”

Call it another ripple effect of FCPA scrutiny and enforcement. (See here [10] for the article titled “FCPA Ripples.”) The many ripples of Och-Ziff’s FCPA scrutiny and enforcement (see here [11]) far exceed the $412 million the company paid in 2016 to resolve an FCPA enforcement action (see here [12]).

For the Reading Stack

The most recent edition of the always informative Debevoise FCPA Update is here [13] with articles about the construction and life sciences industries.

Some interesting observations regarding the recent Petrobras enforcement action (see here [14], here [15] and here [16] for prior posts) in articles here [17] by Paul Weiss attorneys and here [18] by Jenner Block attorneys.

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