The common way for a company to resolve an FCPA enforcement action is via a non-prosecution or deferred prosecution agreement. If the conduct is egregious, yet the company is cooperating, the company will generally plead guilty via a criminal information.
A criminal indictment of a company is rare. According to my records, it has not happened since September 2008.
It happened yesterday.
As noted in this DOJ release, “Lindsey Manufacturing Company (here), an Azusa, Calif., company and two of its executives (Keith E. Lindsey, 65 and Steve Lee, 60) were indicted today for their alleged roles in a conspiracy to pay bribes to Mexican government officials at the Comisión Federal de Electricidad (CFE), a state-owned utility company …”. Lindsey Manufacturing Co., Lindsey, and Lee each were charged in an eight-count superseding indictment with conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and FCPA violations
Given the allegations in the recent Enrique Faustino Aguilar Noriega and Angela Maria Gomez Aguilar indictments (see here for the prior post) this is hardly a surprising development.
What is surprising is that Lindsey Manufacturing was criminally indicted. Previous media reports indicated that Lindsey Manufacturing was “cooperating with authorities and wasn’t aware that its contracts were being used for bribes” according Lindsey attorney Jan Handzlik (here). According to this report, “attorneys for Lindsey and Lee said their clients had no knowledge of improper payments.”
What will happen to Lindsey Manufacturing, a company that has previously secured U.S. Department of Energy contracts?
The conventional wisdom is this post-Arthur Anderson world is that NPAs and DPAs are necessary because a company will fail when it is criminally indicted.
The last company criminally indicted for violating the FCPA was Nexus Technologies Inc. (see here).
It does not exist today (see here).