This post provides a summary of Foreign Corrupt Practices Act enforcement activity and related developments from the first quarter of 2024.
DOJ Enforcement (Corporate)
The DOJ announced three corporate enforcement actions in the first quarter. Net FCPA settlement amounts in these enforcement actions totaled $638.2 million.
SAP (Jan 10)
See here and here for prior posts.
Charges: Conspiracy to violate the FCPA’s anti-bribery provisions and to falsify books and records.
Resolution Vehicle: Criminal information charges resolved through a deferred prosecution agreement.
Guidelines Range: $180 – $360 million.
Settlement: Net $63.6 million (after certain credits and/or reductions for related foreign law enforcement investigations).
Origin: In 2019, the company disclosed: “SAP has received communications and whistleblower information alleging conduct that may violate anti-bribery laws in South Africa, the United States (including the U.S. Foreign Corrupt Practices Act (FCPA)), and other countries. The Legal Compliance and Integrity Office of SAP is conducting investigations with the assistance of an external law firm and voluntarily advised local authorities in South Africa as well as the U.S. Securities and Exchange Commission (U.S. SEC) and the U.S. Department of Justice (U.S. DOJ).”
Monitor: No
Individuals Charged: No
Gunvor (March 1)
See here and here for prior posts.
Charges: Conspiracy to violate the FCPA’s anti-bribery provisions.
Resolution Vehicle: Criminal information resolved through a plea agreement.
Guidelines Range: $384 – 768 million.
Settlement: Net $474.4 million (after certain credits and/or reductions for related foreign law enforcement investigations).
Origin: Related foreign law enforcement investigation.
Monitor: No
Individuals Charged: Yes
Trafigura (March 28)
See here for the prior post.
Charges: Conspiracy to violate the FCPA’s anti-bribery provisions.
Resolution Vehicle: Criminal information resolved through a plea agreement.
Guidelines Range: $85.2 million – $170.3 million.
Settlement: $100.2 million (after certain credits and/or reductions for related foreign law enforcement investigations).
Origin: Related foreign law enforcement investigation.
Monitor: No
Individuals Charged: No
DOJ Enforcement (Individual)
The DOJ announced FCPA charges against two individuals in the first quarter.
As highlighted here, the DOJ filed criminal charges against Mauricio Gomez Baez (a former Senior Vice President of Stericycle’s Latin American Division) based on the same core conduct alleged in Stericycle’s 2022 FCPA enforcement action.
As highlighted here, the DOJ filed criminal charges against Abraham Cigarroa Cervantes (a former finance director of the Latin America division of Stericycle) based on the same core conduct alleged in Stericycle’s 2022 FCPA enforcement action.
SEC Enforcement (Corporate)
The SEC brought one FCPA enforcement action in the first quarter. SEC recovery in this action was $38.9 million.
SAP (January 10)
See here and here for prior posts.
Charges: None (administrative order findings violations of the FCPA’s anti-bribery, books and records and internal controls provisions.)
Settlement: $38.9 million (disgorgement of $25.6 million and prejudgment interest of $13.4 million).
Origin: In 2019, the company disclosed: “SAP has received communications and whistleblower information alleging conduct that may violate anti-bribery laws in South Africa, the United States (including the U.S. Foreign Corrupt Practices Act (FCPA)), and other countries. The Legal Compliance and Integrity Office of SAP is conducting investigations with the assistance of an external law firm and voluntarily advised local authorities in South Africa as well as the U.S. Securities and Exchange Commission (U.S. SEC) and the U.S. Department of Justice (U.S. DOJ).”
Individuals Charged: No
Related DOJ Enforcement Action: Yes
SEC Enforcement (Individual)
The SEC did not bring any individual FCPA enforcement actions in the first quarter.
The last time the SEC brought an individual FCPA enforcement action was in October 2020 – a gap that is now approaching 3.5 years.
Other Developments or Items of Interest
As highlighted here, in a rare FCPA trial Javier Aguilar was convicted “for his role in a scheme to bribe Ecuadorean and Mexican government officials and to launder money to secure contracts worth hundreds of millions of dollars for his then-employer, Vitol Inc. (Vitol), the U.S. affiliate of the largest independent energy trading firm in the world.” During the trial, the judge made an interesting ruling that employees of a wholly-owned affiliate of PEMEX are not “public servants” under a relevant Mexican law. (See here).
As highlighted here, in a post-trial ruling, a trial court judge upheld FCPA convictions of former ComEd Executives and associates in a so-called non-FCPA, FCPA enforcement action.
As highlighted here, DOJ officials announced a new upcoming whistleblower program which DOJ officials anticipate being “especially useful in developing foreign corruption cases that are outside the jurisdiction of the SEC, including FCPA violations by non-issuers.”
