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Friday Roundup

Roundup

Fear based marketing, not a victim, dismissed, and for the reading stack.

It’s all here in the Friday roundup.

Fear Based Marketing

Another example of lawyers trying to market the COVID-19 situation by asserting that “the novel and exigent circumstances brought on by the pandemic significantly increase companies’ risk exposure under the Foreign Corrupt Practices Act and global anti-bribery laws.”

The piece even uses the personal protective equipment hypothetical that not even top DOJ officials seemed to be concerned about. (See here).

Not a Victim

In recent years, several entities employing alleged “foreign officials” who receive bribe payments from individuals prosecuted for Foreign Corrupt Practices Act offenses have sought “victim” status under the Mandatory Victims Restitution Act.

One example has involved PetroEcuador who sought victim status in connection with the FCPA enforcement action against Frank Chatburn (see here for more on the underlying enforcement action).

A district court denied relief after determining that PetroEcuador was precluded from attaining victim status based on the level of “pervasive, constant, and consistent illegal conduct” among its principals and that it had not demonstrated the requisite link between the criminal conduct at issue and any alleged harm.

Recently the 11th Circuit concluded that the district court did not err in denying relief. (See here). As stated by the 11th Circuit:

“The record demonstrates that at least five PetroEcuador employees, including a member of the Board of Directors and other high-level employees, were involved in the underlying bribery scheme. Their actions can be imputed to PetroEcuador, as obtaining and retaining contracts on behalf of PetroEcuador was within the scope of their employment and they acted, at least in part, to benefit PetroEcuador by obtaining contracts that were subsequently performed by a qualified contractor. Additionally, the record does not support PetroEcuador’s assertion that it was directly and proximately harmed, as there is no evidence that the contract prices were inflated by the bribes as alleged.”

DPA Dismissed

As highlighted in this previous post, in early 2017 Rolls-Royce resolved a net approximate $170 million FCPA enforcement action concerning conduct in Thailand, Brazil, Kazakhstan, Azerbaijan, Angola and Iraq. The DOJ component included a criminal information resolved through a three-year deferred prosecution agreement.

The DPA provided that the Government would not continue the criminal prosecution against Rolls Royce and would move to dismiss the Information within six months of the expiration of the DPA, if Rolls Royce fully complied with all of its obligations.

The DOJ recently made such a motion which was accepted by the trial court on May 19th. As stated in the DOJ’s motion to dismiss:

“The DPA expired on or about December 20, 2019.

On February 27, 2020, Rolls Royce’s Chief Executive Officer and Chief Financial Officer certified to the Government that Rolls Royce has met its … obligations pursuant … to the DPA.

Based on the information known to the Government, Rolls Royce has fully met the obligations under the DPA, including full cooperation with the Government and implementation of an enhanced compliance program and procedures. In addition, Rolls Royce has made timely payment of the $169,917,710 monetary penalty.

Because Rolls Royce has fully complied with all of its obligations under the DPA, the Government has determined that dismissal of the Information with prejudice is appropriate.

The Government has conferred with counsel for Rolls Royce, who concurs that dismissal is appropriate at this time.”

For the Reading Stack

Former DOJ Criminal Division Fraud Section Chief Andrew Weissmann has bounced between the government and private sector several times. While Fraud Section Chief Weissmann played a role in development of the DOJ’s so-called FCPA Pilot Program and the position of DOJ compliance counsel.

Now back in private practice, in this recent Wall Street Journal Risk & Compliance Journal Q&A, Weissmann talks about corporate compliance.

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