On July 17th, the DOJ announced a $10.2 million FCPA enforcement action against The Scoular Company based on alleged bribery scheme in Mexico. (See here for the prior post).
As stated in the DOJ release:
“Between 2013 and 2019, Scoular relied on multiple customs brokers to ensure that its shipments of corn and other products successfully crossed from the United States into Mexico. Under Mexican law, those shipments were subject to inspection for dirt, soil, and other impurities. To ensure that Scoular’s shipments successfully transited the border despite inspections that found such dirt, soil, and other impurities, Scoular authorized multiple third-party customs brokers to bribe Mexican officials at the border. At the direction of Scoular employees, and for Scoular’s benefit, those brokers paid bribes of approximately $2,000 per Scoular train and invoiced the bribes back to Scoular for reimbursement of reinspection fees, which Scoular paid. Scoular employees communicated about shipments and bribes via WhatsApp and other means. In total, Scoular authorized bribes of more than $400,000 and avoided fees and costs of more than $6.5 million.”
As discussed in previous posts here and here, The Scoular enforcement action was a garden variety FCPA enforcement action.
Nevertheless, the enforcement action seemed to garner much attention as FCPA Inc. (always an active group of writers who often use any little nugget of information to market FCPA or related practices) focused on the following language from the DOJ’s press release:
“unbeknownst to the company or its employees, a portion of the bribes paid in connection with Scoular’s shipments benefited persons associated with the criminal operations of a cartel operating at the U.S.-Mexico border.”
There it was … the “c” word – cartel – and evidence of the DOJ’s new approach to enforcing the FCPA.
The prior posts pointed out however that the conduct at issue in the enforcement occurred 7-13 years ago and there was no mention of cartels in the Scoular criminal information.
The prior posts also pointed out that the Scoular enforcement action was based on the same core conduct alleged in the 2025 FCPA enforcement action against Carlos Leopoldo Alvelais (the third-party used to facilitate the bribery scheme) and that there was no mention of cartels in the criminal information or plea agreement in that action.
The three year DPA used to resolve the single charge of conspiracy to violate FCPA’s anti-bribery provisions is now in the public domain … and guess what?
There is no mention of cartels in the nine-page Statement of Facts.
The only mention of cartels in the entire 52 page DPA is under the heading “Relevant Considerations” (a common section in DPAs) and it is the exact same sentence found in the DOJ press release.
Specifically, the DOJ’s determination during the course of the investigation, that,
“unbeknownst to the company or its employees, a portion of the bribes paid in connection with Scoular’s shipments benefited persons associated with the criminal operations of a cartel operating at the U.S.-Mexico border.”
The full “Relevant Considerations” section of the DPA states:
“The [DOJ] enters into this Agreement based on the individual facts and circumstances presented by this case, including:
a. the nature and seriousness of the offense … including a multi-year scheme to authorize and pay more than $400,000 in bribes through customs brokers thereby bypassing Mexican law and procedures addressing the presence of dirt in agricultural products, in order to obtain and retain business, all of which avoided more than $6.5 million in demurrage and related costs associated with the Company’s shipments; and the Offices’ determination during the course of the investigation, that, unbeknownst to the Company or its employees, a portion of the bribes paid in connection with Scoular’s shipments benefited persons associated with the criminal operations of a cartel operating at the U.S.-Mexico border.
b. the Company did not receive voluntary disclosure credit … because it did not voluntarily and timely disclose to the [DOJ] the conduct …
c. the Company received credit for its cooperation … because it cooperated with the investigation and demonstrated recognition and affirmative acceptance of responsibility for the criminal conduct; the Company also received credit for its cooperation and remediation .. including (i) conducting an internal investigation into the misconduct and providing evidence to the [DOJ], including detailed factual presentations; (ii) providing information and evidence to the [DOJ] that identified those involved in the misconduct; (iii) producing and organizing materials in response to the [DOJ’s] voluntary document requests, notwithstanding certain deficiencies in the early part of its investigation; and (iv) securing counsel for current employees;
d. the Company provided to the [DOJ] all relevant facts known to it, including information about the individuals involved in the conduct … and conduct disclosed to the [DOJ] prior to the Agreement;
e. the Company also received credit … because Scoular has engaged in timely remedial measures, including (i) increasing compliance sensitivity across the organization through enhanced business engagement; (ii) implementing the findings of an external compliance program maturity assessment and an anti-corruption risk assessment, including by restructuring its compliance function and incorporating senior leadership oversight across compliance and business activities; (iii) reducing operational risk by eliminating the use of customs brokers associated with reinspection fees in Mexico; (iv) strengthening risk-based review and monitoring procedures, and coordinating those efforts through the use of specific software tools; (v) updating and launching a revised Code of Conduct, along with several key policies and procedures related to its compliance program, including anti-corruption, bribery, conflicts of interest, and third-party management; (vi) improving and implementing risk-based screenings and approval requirements for third-party providers; implementing anti-corruption and audit right provisions in third-party contracts; (vii) implementing revised financial controls procedures that relate to high-risk transactions; and (viii) providing general and targeted anti-corruption training to relevant personnel.
f. Scoular has enhanced and has committed to continuing to enhance its compliance program and internal controls, including ensuring that its compliance program satisfies the minimum elements set forth in Attachment C to this Agreement (Corporate Compliance Program);
g. based on the Company’s remediation and the state of its compliance program, and the Company’s agreement to report to the [DOJ] … the [DOJ] determined that an independent compliance monitor was unnecessary;
h. the Company has no prior criminal history or civil or regulatory enforcement history involving similar conduct;
i. the Company’s agreement to continue to cooperate with the [DOJ] in any ongoing investigations of the conduct of the Company and its officers, directors, employees, agents, business partners, distributors, and consultants;
j. accordingly, after considering (a) through (i) above, the [DOJ] has determined that the appropriate resolution … is a DPA with a three-year term; payment of a criminal penalty in the amount of $9,769,521, which reflects a reduction of 25 percent off the bottom of the applicable Sentencing Guidelines fine range, and $414,351 in forfeiture.”
The above math doesn’t seem to add up as the DPA sets forth a fine range of $30-60 million.
