Banking bar, Kokesh related, OECD shaming, quotable, downfall, and listening in. It’s all here in the FCPA roundup.
The Federal Reserve recently announced “that it is prohibiting Tim Leissner and Ng Chong Hwa, also known as Roger Ng, from the banking industry for their participation in a scheme to illegally divert billions of dollars from a Malaysian sovereign wealth fund. Leissner was also fined $1.42 million and consented to the permanent ban.”
As stated in the release:
“Leissner and Ng, former senior investment bankers employed by foreign subsidiaries of The Goldman Sachs Group, Inc., coordinated bond offerings arranged by Goldman for 1Malaysia Development Berhad (1MDB) in 2012 and 2013. The funds diverted from 1MDB were then used for the conspirators’ personal benefit and to bribe certain government officials in Malaysia and Abu Dhabi. In August 2018, Leissner pleaded guilty to criminal charges brought by the Department of Justice in the Eastern District of New York for conspiring to violate the Foreign Corrupt Practices Act and to commit money laundering. Ng was indicted in October 2018 on similar charges.”
See here for the prior post summarizing the Leissner, Ng, etc. action.
What this Federal Reserve action demonstrates is a point highlighted in this recent post concerning the Commodity Futures Trading Commission apparent interest in Commodity Exchange Act violations involving foreign corrupt practices. That being, the CFTC announcement is consistent with other regulatory agencies enforcing their own rules and regulations involving instances of foreign bribery. Indeed, as highlighted in this prior post the Federal Reserve has doing this before.
As highlighted in this prior post in Kokesh the Supreme Court concluded that disgorgement actions must be commenced within five years “of the date the claim accrues.”
However, this bill recently introduced by Senators Mark Warner (D-Va.) and John Kennedy (R-La) states that the limitations period for disgorgement is within “5 years after the date on which the person against which the claim is brought receives any unjust enrichment as a result of the violation that gives rise to the action or proceeding in which the Commission seeks the claim.”
This previous post was titled “Canada’s OECD Article 5 Moment” given allegations swirling up north about political interference in the SNC-Lavalin inquiry.
Sure enough, the OECD recently issued this release stating:
“The OECD Working Group on Bribery is concerned by recent allegations of interference in the prosecution of SNC-Lavalin that are subject to proceedings in the House of Commons Standing Committee on Justice and Human Rights. The Canadian engineering and construction group is the subject of an ongoing prosecution into allegations of the bribery of Libyan officials to obtain a Can$ 58-million contract to restore a water pipeline. As a Party to the Anti-Bribery Convention, Canada is fully committed to complying with the Convention, which requires prosecutorial independence in foreign bribery cases pursuant to Article 5. In addition, political factors such as a country’s national economic interest and the identity of the alleged perpetrators must not influence foreign bribery investigations and prosecutions. In February 2019, two procedures were swiftly launched in Canada to respond to the allegations of political pressure. The Federal Conflict of Interest and Ethics Commission opened an investigation into potential violation of Canada’s Conflict of Interest Act, and the Parliamentary Commons Justice Committee initiated a Parliamentary inquiry. The OECD Working Group on Bribery is encouraged by these processes, and notes that the Canadian authorities stress that they are transparent and independent. The Working Group recognises Canada’s willingness to keep it fully informed of developments in the proceedings, including at its next meeting in June 2019. The OECD Working Group, which brings together the 44 Parties to the Anti-Bribery Convention, will closely monitor Canada’s updates, and has also sent a letter to the Canadian authorities confirming its concerns and next steps in this matter.”
Speaking of up north, as highlighted in this New York Times article:
“Another minister in the cabinet of Prime Minister Justin Trudeau of Canada quit in protest on Monday over accusations that he and his aides tried to influence a criminal case against a multinational Canadian company accused of bribing the Libyan government. The unexpected resignation, by Jane Philpott, who led the treasury board, inflames a growing political crisis that has already cost Mr. Trudeau his former justice minister and his top aide. “I’ve been considering the events that have shaken the government in recent weeks and after serious reflection, I have concluded that I must resign as a member of cabinet,” said Ms. Philpott, who was also a former health minister and minister of Indigenous affairs.”
In this recent Corporate Crime Reporter interview, recently departed acting chief of the DOJ Fraud Section Sandra Moser engages in the following exchange:
“How did the prosecution of corporate and white collar crime change under the Trump administration?
“Built into your question is the premise that it did change,” Moser told Corporate Crime Reporter in an interview last week. “There has been press and articles speculating and concluding that it did change. But it’s my sincere view that it didn’t change. Even though my last job as head of the Fraud Section had me only reporting up to political appointees, mine was a career position. And everybody who makes up the Fraud Section also occupy career positions. As chief of the Fraud Section, you are managing a group of people akin to the size of the largest U.S. Attorney’s office in the country, but you do not require a political appointment to have that position. It really becomes important to the people there and to the person occupying that job to stay the course, to keep your head down and continue to investigate and prosecute cases, and determining which ones are worthy of opening and pursuing, given the government’s not so vast resources.”
“That’s what I did. That’s the view from the inside. It did not feel different. We did not approach things differently. One thing that certainly affects what you are able to do and how much you are able to do is resources. There has been a hiring freeze since the President took office January 2017. The hiring freeze continues – two years and counting. That doesn’t mean no individuals are being brought on. There are different streams of funding and different ways to try to be entrepreneurial about adding resources. But it is nonetheless a challenge. We didn’t approach things differently at all, except with how we dealt with our resource challenges.”
“If you look at the statistics side of it, you don’t see anything drastically different. If you look at the Fraud Section’s year in review from 2018, the vast majority of the numbers – dollars, prosecutions of individuals – are all up. Prosecutions of corporations, if not up, are certainly holding steady.”
“It is how you slice and dice it. If some of the speculation is looking at the whole hog across the entire nation in every single U.S. Attorney’s office, versus the Fraud Section specifically, there may be a dip in overall numbers. But you have to consider the directives and priorities of each one of those offices and what those priorities have been under this administration. If you are on the border, for example, you have to believe that more of your resources have been dedicated to fighting certain types of offenses more so than white collar crime. I can’t speak to all 96 offices across the country. But I can speak to the Fraud Section.”
At the Fraud Section, you saw no directive or policy change that shifted corporate crime prosecutions one way or the other?
“Certainly, no directive,” Moser said. “As I mentioned before, there have been policy developments that have even been formally memorialized into what now is called the Justice Manual, what was previously called the U.S. Attorney’s Manual. That includes the memorialization of the Foreign Corrupt Practices Act corporate enforcement policy and what is colloquially called the anti-piling on policy.”
“That involves a recognition of the fact that there are many enforcement agencies, not just globally, but often within the Department of Justice, looking at one entity. And you have to be mindful of not piling on when it comes to the penalty phase of a potential corporate resolution.”
An interesting piece here from Bloomberg:
“One-time energy powerhouse Niko Resources Ltd. will end its life as a publicly-traded company Wednesday with a whimper when it is delisted from the Toronto Stock Exchange. The Calgary-based company grew from a penny stock that was first listed on the defunct Alberta Stock Exchange, eventually becoming a multibillion dollar darling on the Toronto Stock Exchange, all because of a risky bet it took on Indian natural gas that paid off. But it was events next door in Bangladesh that would come to define the company. In 2011, Niko pleaded guilty to bribing a minister in Bangladesh under Canada’s 1998 Corruption of Foreign Public Officials Act and agreed to pay a $9.5-million fine. It never recovered from the conviction.”
An informative podcast with Laura Perkins aformer DOJ FCPA enforcement official.
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