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What You Need To Know From Q1


This post provides a summary of Foreign Corrupt Practices Act enforcement activity and related developments from the first quarter of 2020. In many respects, the first quarter (and foreseeable future) is divided into a pre-COVID-19 environment and post-COVID-19 environment (circa March 10th).

DOJ Enforcement (Corporate)

The DOJ brought one corporate FCPA enforcement action in the first quarter. DOJ actual recovery in this action was $294 million.

Airbus (Jan. 31)

See here and here for prior posts.

Charges: Criminal information charging conspiracy to violate the FCPA’s anti-bribery provisions.

Resolution Vehicle: Deferred Prosecution Agreement

Guidelines Range: $2.8 billion – $5.6 billion

Settlement: $294 million (after the DOJ allowed credits for satisfaction of payments to other foreign law enforcement agencies)

Origin: Foreign law enforcement investigation (prompted by the company seeking export credit financing)

Monitor: No

Individuals Charged: No

DOJ Enforcement (Individual)

The DOJ brought or announced two core individual enforcement actions in the first quarter against four individuals.

As highlighted in this post, in connection with the long-standing Alstom matter, the DOJ announced the unsealing of a criminal indictment harging Reza Moenaf (the former president of Alstom’s subsidiary in Indonesia), Eko Sulianto (the former director of sales of Alstom’s subsidiary in Indonesia) and Junji Kusunoki (the former deputy general manager of Marubeni’s Overseas Power Project Department) with conspiracy to violate the FCPA and conspiracy to commit money laundering in connection with the same core allegations found in the previous enforcement actions.

In connection with the sprawling PDVSA related enforcement actions, the DOJ brought additional charges against Tulio Anibal Farias-Perez. (See here).

SEC Enforcement (Corporate)

The SEC brought one corporate FCPA enforcement action in the first quarter. SEC recovery in this action was approximately $8.8 million

Cardinal Health  (Feb. 28)

See here and here for prior posts

Charges:  None (administrative order findings violations of the FCPA’s books and records and internal controls provisions)

Settlement: $8.8 million

Origin: Voluntary disclosure

Individuals Charged: No

Related DOJ Enforcement Action: No

SEC Enforcement (Individual)

The SEC did not bring an individual FCPA enforcement action in the first quarter.

Other Developments or Items of Interest

As discussed in this post, the COVID-19 crisis once again demonstrates the difference between the FCPA (the statute as written by Congress and interpreted by courts) and the FCPA as enforced by the DOJ and/or SEC. This post reminds compliance professionals that the internal controls standard is “reasonable.” This post rounds up other FCPA or related articles about COVID-19.

As highlighted here, Stanley Sporkin died. As head of the SEC enforcement division in the mid-1970’s, Sporkin played a role in certain aspects of the FCPA and thereafter advocated for certain FCPA reforms.

A judge ordered a new trial for FCPA defendants Joseph Baptiste and Roger Boncy who were previously convicted for an alleged Haitian bribery scheme. (See here).

As highlighted here, in a significant setback for the DOJ a judge granted Lawrence Hoskins’s motion for acquittal on the seven FCPA charges he was convicted of by a jury in 2019. (The judge denied Hoskin’s motion for acquittal on the five money laundering charges he was convicted of by the jury). This post highlights what others are saying about the FCPA acquittal. On the money laundering conviction, as discussed here the judge significantly rejected the DOJ’s sentencing recommendation and sentenced Hoskins to approximately one year. The post further describes how the DOJ press release announcing the sentencing omitted much material information. This post wonders why the DOJ is appealing the FCPA acquittals to the Second Circuit.

As highlighted here, during oral argument in Liu v. SEC (a disgorgement case with potential FCPA implications) the Deputy Solicitor General stated that “there really is no obvious universe of individual victims from an FCPA violation.”

In an FCPA issue of first impression, a judge ruled that separate e-mails in furtherance of the same alleged bribery scheme are separate “units of prosecution.” (See here).

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