The ETHIC Intelligence team regularly monitors transnational corruption case law and other relevant court cases. This section includes significant cases whose results could have an impact on the way companies conduct business at home and abroad.
Latest cases in 2018
11 July 2018 - Riadh Ben Aissa (former VP with SNC-Lavalin)
There was one guilty plea and one acquittal in the McGill University Health Centre (MUHC) superhospital corruption case. Former SNC-Lavalin vice president of construction, Riadh Ben Aissa, pleaded guilty to one charge of using a forged document at the Montreal courthouse. In exchange for the plea, 15 other charges against him were dropped. Judge Hélène Morin sentenced Ben Aissa to 51 months in prison based on a joint recommendation from the defence and Crown. The time served means Ben Aissa will serve one more day in prison which Judge Morin called "symbolic."
02 July 2018 - Beam Suntory
The US Securities and Exchange commission has announced that Beam Suntory Inc. has agreed to pay more than USD8 million to resolve Foreign Corrupt Practices Act (FCPA) charges arising from improper payments made by its Indian subsidiary. According to the SEC’s order, from 2006 through 2012 Beam’s Indian subsidiary used third-party sales promoters and distributors to make illicit payments to government employees to increase sales orders, process license and label registrations, and facilitate the distribution of Beam’s distilled spirit products. The order found that the Indian subsidiary reimbursed the third-parties for the illicit payments through the use of fabricated or inflated invoices, and then falsely recorded the expenses at the subsidiary level. The expenses were then consolidated into Beam’s books and records. The SEC’s order also found that during this period Beam failed to devise and maintain a sufficient system of internal accounting controls.
27 June 2018 - Egbert Yvan Ferdinand Koolman
Egbert Yvan Ferdinand Koolman, 49, a Dutch citizen residing in Miami, was sentenced by U.S. District Judge Federico A. Moreno of the Southern District of Florida, to three years in prison for money laundering. Koolman was also ordered to serve three years of supervised release following his prison sentence and to pay over $1.3 million in restitution. Koolman was an official of Servicio di Telecommunicacion di Aruba N.V. (Setar), an instrumentality of the Aruban government. He pleaded guilty on April 13, before Judge Moreno to one count of conspiracy to commit money laundering. He was sentenced in connection with his role in a scheme to arrange and receive corrupt payments to influence the awarding of contracts with an Aruban state-owned telecommunications corporation.
According to admissions made as part of his plea agreement, between 2005 and 2016, Koolman operated a money laundering conspiracy from his position as Setar’s (Servicio di Telecommunicacion di Aruba N.V.) product manager. Koolman admitted that, as part of the scheme, he conspired with Lawrence W.Parker (who pleaded guilty to one count of conspiracy to violate the FCPA and to commit wire fraud and was sentenced on April 30 to servie 35 months in prison and pay USD701,750 in restitution) and others to transmit funds from Florida and elsewhere in the United States to Aruba and Panama with the intent to promote a wire fraud scheme and a corrupt scheme that violated the Foreign Corrupt Practices Act (FCPA).
7 June 2018 - Credit Suisse
Credit Suisse will pay a penalty of about $47 million to resolve a U.S. Department of Justice corruption probe into its hiring practices in the Asia Pacific region between 2007 and 2013. The U.S. investigation looked into whether Credit Suisse hired referrals from government agencies in Asia in exchange for business. The bank will also pay the SEC $30 million to resolve charges that it obtained investment banking business in the region by corruptly influencing foreign officials in violation of the FCPA.
4 June 2018 - Société Général bank
Société Générale S.A. (Société Générale), a global financial services institution based in Paris, France, and its wholly owned subsidiary, SGA Société Générale Acceptance N.V., have agreed to pay a combined total penalty of more than $860 million to resolve charges with criminal authorities in the United States and France, including $585 million relating to a multi-year scheme to pay bribes to officials in Libya and $275 million for violations arising from its manipulation of the London InterBank Offered Rate (LIBOR), one of the world’s leading benchmark interest rates. SGA Société Générale Acceptance N.V. will plead guilty in the Eastern District of New York in connection with the resolution of the foreign bribery case. Together with approximately $475 million in regulatory penalties and disgorgement that Société Générale has agreed to pay to the Commodity Futures Trading Commission (CFTC) in connection with the LIBOR scheme, the total penalties to be paid by the bank exceed $1 billion. The Department entered into this resolution in part due to Société Générale’s failure to voluntarily self-disclose the companies’ misconduct to the Department; the seriousness of the companies’ conduct, including the high value of the bribes paid to foreign officials; the company’s substantial, though not full, cooperation with the Department; and the company’s significant remediation which, together with the company’s risk profile and ongoing monitoring by L’Agence Française Anticorruption, resulted in the Department determining that a monitor was not necessary in this case.
In related proceedings, Société Générale reached a settlement with the Parquet National Financier (PNF) in Paris relating to the Libya corruption scheme. The United States will credit $292,776,444 that Société Générale will pay to the PNF under its agreement, equal to 50 percent of the total criminal penalty otherwise payable to the United States.
4 June 2018 - Legg Mason Inc. (Legg Mason)
Legg Mason Inc. (Legg Mason), a Maryland-based investment management firm, has entered into a non-prosecution agreement with the Department of Justice and agreed to pay US$64.2 million to resolve the Department's investigation into violations of the Foreign Corrupt Practices Act (FCPA) in connection with Legg Mason's participation, through a subisidary, in a Libyan bribery scheme. According to Legg Mason’s admissions, between 2004 and 2010, a Legg Mason subsidiary, Permal Group Ltd. (Permal), partnered with Société Générale S.A. (Société Générale), a multinational bank headquartered in Paris, France, to solicit business from state-owned financial institutions in Libya. During this time, Société Générale paid bribes through a Libyan “broker” in connection with 14 investments made by Libyan state-owned financial institutions.
11 May 2018 - Ng Lap Seng
The chairman of a real estate development company was sentenced today to 48 months in prison and three years of supervised release for his role in a scheme to bribe United Nations ambassadors to obtain support to build a conference center in Macau that would host, among other events, the annual United Nations Global South-South Development Expo.
30 April 2018 - Panasonic Corp.
Panasonic Corp. will pay approximately $280 million to resolve U.S. allegations that executives at its in-flight-entertainment unit improperly hid payments to consultants in the Middle East and Asia, some of whom did little or no work for the company.
The Panasonic parent company will pay $143 million in disgorgement to the Securities and Exchange Commission, while Panasonic Avionics Corp. agreed to pay about $137 million in penalties to the Justice Department for violations of the accounting provisions of the Foreign Corrupt Practices Act. In addition, Panasonic Avionics, based in Lake Forest, Calif., entered into a deferred prosecution agreement.
March 2018 - Transport Logistics
The U.S. Department of Justice has entered into a deferred prosecution agreement with Transport Logistics International Inc., a Maryland-based provider of logistical support services for the transportation of nuclear materials. The DPA resolves charges that TLI conspired to violate the FCPA's anti-bribery provisions by bribing a Russian official. Based on TLI's inability to pay, the DOJ agreed to accept US$2 million as a criminal penalty.
February 2018 – Kaefer Wanner & SET Environnement
A French court in Nanterre (Ile-de-France) has concluded deferred prosecution agreements for a case of corruption with two French companies. Although the first DPA was signed with HSBC in December 2017 for a case of money laundering, these are the first two agreements signed for a case of corruption since the entry into force of the law SAPIN II in 2017. The companies agreed to pay fines, implement an anti-corruption compliance program and accept a compliance monitor from the French Anti-Corruption Agency. The agreement means that neither company will have a conviction on its record and will maintain access to public calls for tender. The case stems from a years-long scheme in which an employee of the French national electric company, EDF, who worked in procurement, demanded payments or kickbacks from companies seeking to provide services for power plants. Although many companies went along with the scheme, Kaefer Wanner and SET Environnement decided to self-report to the prosecutor in Nanterre. SET Environnement will pay 800,000 euros while Kaefer Wanner will pay 2,71 million euros. In addition, EDF will receive 30,000 euros in interest and damages from each company.
February 9, 2018 – AIRBUS
Airbus SE has agreed to pay an 81 million euro fine to end a five-year bribery investigation by German prosecutors in connection with Eurofighter jets the defense company sold to Austria in 2003. The Munich Public Prosecutor found former Airbus space and defense executives were guilty of “negligent breach of supervisory duties” by failing to implement internal controls. The probe failed to find any evidence of bribes.
January 14, 2018 – TEVA Pharmaceuticals
The taxation and economic section of the Israeli State Attorney’s Office, with the approval of State Attorney Shai Nitzan, signed a conditional arrangement for an end to proceedings yesterday with Teva Pharmaceutical Industries Ltd. under the Securities Law. The settlement provides that Teva will admit involvement in a bribery affair in Russia and Ukraine, and will pay a NIS 75 (USD 22M) million penalty. An investigation carried out in the US found that Teva had made corrupt payments to public officials in Russia and Ukraine, and had also made inappropriate payments in Mexico, as a result of which it garnered profits amounting to at least $220 million. Some of the payments, made by overseas subsidiaries wholly owned by Teva, were not described for what they really were in the companies’ financial statements, but were presented as legitimate expenses, and were consolidated as such in the financial statements of Teva.
2017 case law
December 22, 2017 – Keppel Offshore & Marine Ltd.
Keppel Offshore & Marine Ltd. (KOM), a Singapore-based company that operates shipyards and repairs and upgrades shipping vessels, and its wholly owned U.S. subsidiary, Keppel Offshore & Marine USA Inc. (KOM USA), have agreed to pay a combined total penalty of more than USD422 million to resolve charges with authorities in the United States, Brazil and Singapore arising out of a decade-long scheme to pay millions of dollars in bribes to officials in Brazil.
December 1, 2017 – SBM Offshore
SBM Offshore NV (SBMO.AS), a Netherlands-based maker of offshore oil drilling equipment, and its U.S subsidiary, SBM Offshore USA Inc, have agreed to settle criminal charges of bribing officials in five countries and pay a US$238 million penalty according to the US Department of Justice. The companies have agreed to settle charges related to schemes lasting more than a decade involving bribery of foreign officials in Brazil, Angola, Equatorial Guinea, Kazakhstan and Iraq.
September 29, 2017 – ALERE
Alere Inc has agreed to pay more than $13 million to resolve charges the diagnostic testing firm committed accounting fraud and made improper payments to foreign officials, the U.S. Securities and Exchange Commission has said. The settlement with Alere resolved an investigation that began in 2015 before Abbott Laboratories agreed to buy the Waltham, Massachusetts-based company in a $5.3 billion deal expected to close later in 2017. Alere, which manufactures and sells diagnostic tests, did not admit wrongdoing as part of the settlement.
September 25, 2017 – former Alstom Executive Frédéric Pierucci
A former executive of French power and transportation company Alstom was sentenced in the U.S. on September 25 2 ½ years in prison for bribing Indonesian officials — a scheme that was part of a worldwide bribery scandal resulting in a record $772 million fine against the company. Frederic Pierucci, a 49-year-old French citizen, also was fined $20,000 at his sentencing in federal court in New Haven, Connecticut. He pleaded guilty in 2013 to violating and conspiring to violate the FCPA. Pierucci was vice president of global sales for an Alstom subsidiary in Windsor, Connecticut, that has since been acquired by General Electric Co. He, several other Alstom officials and an Alstom business partner were indicted on U.S. charges that they bribed several Indonesian government officials, including a member of Parliament, offering hundreds of thousands of dollars between 2002 and 2009 to secure a $118 million contract for a power project in Tarahan to provide electricity to citizens.
September 21, 2017 – Telia Company AB + Uzbek subsidiary Coscom
Stockholm-based Telia Company AB, an international telecommunications company that was formerly an issuer of publicly traded securities in the U.S., and its Uzbek subsidiary, Coscom LLC, entered into a global foreign bribery resolution with the US Department of Justice and agreed to pay a combined total penalty of more than $965 million to resolve charges arising out of a scheme to pay bribes in Uzbekistan. Telia entered into a deferred prosecution agreement in connection with a criminal information filed in the Southern District of New York charging the company with conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA). In addition, Coscom, an Uzbek subsidiary, pleaded guilty and was sentenced on a one-count criminal information charging the company with conspiracy to violate the anti-bribery provisions of the FCPA. Pursuant to its agreement with the Department, Telia agreed to pay a total criminal penalty of $274,603,972 to the U.S., including a $500,000 criminal fine and $40 million in criminal forfeiture that Telia agreed to pay on behalf of Coscom. Telia also agreed to implement rigorous internal controls and cooperate fully with the Department’s ongoing investigation, including its investigation of individuals. The criminal portion of the fine will be split between the U.S. and Dutch authorities. The total penalty amount also includes a $457 million disgorgement to the SEC.
The Securities & Exchange Commission charged Halliburton Company with violating the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA) while selecting and making payments to a local company in Angola in the course of winning lucrative oilfield services contracts. Halliburton, which profited by approximately US$14 million from the deals, has agreed to pay more than US$29.2 million to settle the SEC’s case. The company also agreed to obtain an independent compliance consultant to oversee its anti-corruption policies and procedures in Africa. Halliburton’s former vice president Jeannot Lorenz has agreed to pay a US$75,000 penalty for causing the company’s violations, circumventing internal accounting controls, and falsifying books and records.
July 7, 2017 – ADDAX
Addax Petroleum has agreed to pay 31 million Swiss francs (USD32 million) to settle charges of suspected bribery of foreign officials with the Geneva prosecutor’s office. A four-month investigation found the payments were not sufficiently documented and doubts remained on their legality, but no criminal intent was established, the Geneva prosecutor’s office said in a statement. It added that Addax acknowledged possible organisational shortcomings and had taken measures to improve internal anti-corruption procedures.
May 31, 2017 – JBS
The controlling shareholder of the world’s largest meat-packing company, JBS, has agreed to pay a record 10.3bn real (US$3.2bn) fine to Brazilian authorities for its role in Brazil’s corruption scandals. J&F Investimentos will pay under a leniency deal in two corruption investigations.
May 31, 2017 – Samuel Mebiame
A dual citizen of Gabon and France was sentenced to 24 months in prison for his role in a conspiracy to pay bribes to senior government officials across Africa, in violation of the Foreign Corrupt Practices Act (FCPA). According to admissions made at his plea hearing, Samuel Mebiame formed a conspiracy to provide improper benefits to government officials in multiple countries in Africa. Mebiame admitted that the improper benefits he provided were intended to influence the performance of official governmental duties, and that he took steps to further the conspiracy while physically in New York. Based on court documents, Mebiame worked as a “fixer” on behalf of a joint venture company owned by New-York-based hedge fund Och-Ziff Capital Management Group LLC (Och-Ziff) and its business partner, a Turks and Caicos Islands-registered corporate entity controlled by a co-conspirator.
The Securities and Exchange Commission today announced that two former executives at Hungarian-based telecommunications company Magyar Telekom have agreed to pay financial penalties and accept officer-and-director bars to settle a previously-filed SEC case alleging they violated the Foreign Corrupt Practices Act (FCPA). Magyar Telekom paid a $95 million penalty in December 2011 to settle parallel civil and criminal charges that the company bribed officials in Macedonia and Montenegro to win business and shut out competition in the telecommunications industry. The SEC’s complaint also charged the company’s former CEO Elek Straub and former chief strategy officer Andras Balogh with orchestrating the use of sham contracts to funnel millions of dollars in corrupt payments. The two executives were set to stand trial this month. Straub has agreed to pay a $250,000 penalty and Balogh has agreed to pay a $150,000 penalty. Both executives agreed to a five-year bar from serving as an officer or director of any SEC-registered public company. The settlements are subject to court approval.
March 30, 2017 – Douglas Ray, President & owner of Global Aviation Services
Douglas Ray, the President and owner of Global Aviation Services, has been sentenced to 18 months in prison, 3 years of supervised release and USD 590,000 in restitution for his role in a scheme to bribe Mexican public officials in order to secure aircraft maintenance and repairs contracts with government-owned and controlled entities. Five other individuals have also pleaded guilty.
January 19, 2017 – Las Vegas Sands Corp
Las Vegas Sands Corp agreed to pay a US$6.96 million penalty to end a U.S. Department of Justice probe into whether it violated a federal anti-bribery law by making payments to a consultant to help it do business in China and Macau. The casino operator also entered a non-prosecution agreement, in which it admitted that executives knowingly failed to set up accounting controls to ensure that the payments were legitimate, and were properly recorded in its books and records.
January 18, 2017 – ORTHOFIX
The US Securities and Exchange Commission has announced that Texas-based medical device company Orthofix International has agreed to admit wrongdoing and pay more than US$14 million to settle charges that it improperly booked revenue in certain instances and made improper payments to doctors at government-owned hospitals in Brazil in order to increase sales. Orthofix has agreed to pay a US$8.25 million penalty to resolve the accounting violations and more than $6 million in disgorgement and penalties to settle the FCPA charges. The company agreed to retain an independent compliance consultant for one year to review and test its FCPA compliance program. Jeff Hammel, a former accounting executive in Orthofix’s largest business segment, agreed to pay a US$20,000 penalty and former sales executives Kenneth Mack and Bryan McMillan agreed to pay penalties of $40,000 and $25,000 respectively. Orthofox’s former corporate CFO, Brian McCollom, agreed to pay a $35,000 penalty and reimburse the company $40,885 for bonuses he received during the period when the company committed accounting violations.
January 17, 2017 – Kendrick Wallace, former Chief Legal Officer, YARA International
A Norwegian appeals court has sentenced the former chief legal officer of fertilizer-maker Yara International, Kendrick Wallace, to seven years in prison in a bribery case. The Borgarting Appeal Court, a regional court in southeast Norway, upheld 71-year-old Wallace’s guilt in December. Wallace, an American, had originally been convicted to 2-1/2 years in prison by a lower court. Prosecutors had originally accused four Yara executives of paying bribes to officials in India and Libya, but only Wallace was convicted in the appeals case, while the three others were acquitted.
January 16, 2017 – Rolls Royce Plc
British engineering group Rolls-Royce Plc has reached settlements with authorities in Britain, the United States and Brazil relating to bribery and corruption involving intermediaries. These settlements will result in a series of payments totaling 671 million pounds (US$809 million). Under the terms of the agreements with the U.S. Department of Justice, Brazil’s Ministerio Publico Federal (MPF) Rolls has agreed to make payments to the DOJ totaling nearly US$170 million and to the MPF totaling US$25.58 million. Under the terms of a deferred prosecution agreement with Britain’s Serious Fraud Office the company said it will pay $497.25 million plus interest under a schedule lasting up to five years, plus a payment in respect of the SFO’s costs. The proposed agreement with the Serious Fraud Office is still subject to court approval.
January 9, 2017 – Mondelez International
Mondelez International has agreed to pay the US Securities and Exchange Commission (SEC) US$13 million in civil penalties without admitting or denying charges that its subsidiary Cadbury India (now Mondelez India Foods) paid a consultant who was suspected to have bribed government officials and possibily top state politicians to obtain licenses and approvals for a chocolate factory in Baddi, Himachal Pradesh. The agreement settles the charges related to internal controls and books-and-records provisions of the FCPA.
2016 case law
December 29, 2016 – General Cable
General Cable, a Kentucky-based manufacturer and distributor of cable and wire, entered into a non-prosecution agreement and agreed to pay a US$20 million penalty, reflecting a 50 percent reduction off the bottom of the U.S. Sentencing Guidelines fine range, to resolve the government’s investigation into improper payments to government officials in Angola, Bangladesh, China, Indonesia and Thailand to gain business in violation of the FCPA.
December 22, 2016 – TEVA Pharmaceuticals
The SEC has announced that Teva Pharmaceutical Industries Limited has agreed to pay more than US$519 million to settle parallel civil and criminal charges that it violated the Foreign Corrupt Practices Act by paying bribes to foreign government offcials in Russia, Ukraine and Mexico.
December 21, 2016 – Odebrecht S.A. and Braskem
Odebrecht S.A., a global construction conglomerate based in Brazil, and Braskem S.A., a Brazilian petrochemical company, have pleaded guilty and agreed to pay a combined total of at least US$3.5 billion to resolve charges with authorities in the United States, Brazil and Switzerland arising out of their schemes to pay hundreds of millions of dollars in bribes to government officials around the world. In related proceedings, Braskem also settled with the U.S. Securities and Exchange Commission (SEC), the Ministerio Publico Federal in Brazil and the Office of the Attorney General in Switzerland. Under the terms of its resolution with the SEC, Braskem agreed to a total of US$325 million in disgorgement of profits.
The SEC has announced that JPMorgan Chase & Co. has agreed to pay more than US$130 million to settle SEC charges that it won business from clients and corruptly influenced government officials in the Asia-Pacific region by giving jobs and internships to their relatives and friends in violation of the Foreign Corrupt Practices Act (FCPA). In addition, JPMorgan Securities (Asia PAcific) Limited (JPMorgan APAC), a Hong Kong-based subsidiary of multinational bank JPMorgan Chase & Co. (JPMC) agreed to pay the Department of Justice a US$72 million penalty for its role in the scheme to corruptly gain advantages in winning banking deals by awarding prestigious jobs to relatives and friends of Chinese government officials. The Federal Reserve Board, for its part, ordered JPMorgan Chase & Co. to pay a US$61.9 million civil money penalty for unsafe and unsound practices related to the firm’s practice of hiring individuals referred by foreign officials.
October 24, 2016 – Embraer
Brazilian aircraft manufacturer Embraer S.A. has entered into a resolution to resolve criminal charges and agreed to pay a penalty of more than US$107 million in connection with schemes involving the bribery of government officials in the Dominican Republic, Saudi Arabia and Mozambique, and to pay millions more in falsely recorded payments in India via sham agency agreements. In addition, Embraer has entered into a three-year deferred prosecution agreement. Embraer will also pay more than US$98 million to the SEC in disgorgement and interest.
October 3, 2016 – GlaxoSmithKline
GlaxoSmithKline PLC has agreed to pay US$20 million to the US Securities and Exchange Commission to settle allegations that a Chinese subsidiary of the pharmaceutical company bribed foreign officials to increase products sales. The subsidiary and another joint venture provided the officials with gifts, travel and shopping excursions from at least 2010 to June 2013. GSK failed to maintain sufficient internal accounting controls and an anti-corruption compliance program, which led to instances of similar improper conduct in other countries according to the SEC.
September 30, 2016 – Och-Ziff
The Securities and Exchange Commission has announced that Och-Ziff Capital Management Group agreed to pay nearly $200 million to the SEC to settle civil charges of violating the Foreign Corrupt Practices Act (FCPA). Och-Ziff CEO Daniel S. Och agreed to pay nearly $2.2 million to settle SEC charges that he caused certain violations along with CFO Joel M. Frank, who also agreed to settle the charges. The SEC detected the misconduct while proactively scrutinizing the way that financial services firms were obtaining investments from sovereign wealth funds overseas. The SEC’s subsequent investigation of Och-Ziff found that the fund used intermediaries, agents, and business partners to pay bribes to high-level government officials in Africa. According to the SEC’s order, the illicit payments induced the Libyan Investment Authority sovereign wealth fund to invest in Och-Ziff managed funds. Other bribes were paid to secure mining rights and corruptly influence government officials in Libya, Chad, Niger, Guinea, and the Democratic Republic of the Congo. The SEC’s order finds that Och-Ziff executives ignored red flags and corruption risks and permitted illicit transactions to proceed.
September 28, 2016 – Anheuser Busch
The SEC has announced that Anheuser-Busch InBev has agreed to pay US$6 million to settle charges it violated the Foreign Corrupt Practices Act (FCPA). An investigation found that the company used third-party sales promoters to make improper payments to government officials in India to increase the sales and production of Anheuser-Busch products in that country. The SEC’s order further finds that Anheuser-Busch entered into a separation agreement that stopped an employee from continuing to voluntarily communicate with the SEC about potential FCPA violations due to a substantial financial penalty that would be imposed for violating strict non-disclosure terms.
September 28, 2016 – Ronald Harper, former Royal deputy property manager
A former Royal Household official who accepted more than £100,000 in bribes to award contracts for work to royal residences including Buckingham Palace has been jailed for five years. Ronald Harper was the deputy property manager responsible for maintaining the Queen’s main London home, plus St James’s Palace, Clarence House and Windsor Castle. He accepted payments or gifts from the directors of companies who were then given large contracts for maintenance of the historic buildings paid for by the then Civil List, now called the Sovereign Grant. He was found guilty of two counts of conspiracy to make corrupt payments after two trials at Southwark Crown Court in June and August.
September 20, 2016 – Nu Skin Enterprises, Inc.
The Securities and Exchange Commission has announced that Provo, Utah-based Nu Skin Entreprise, Inc (Nu Skin US) has agreed to pay US$765,688 to settle charges that it violated the internal controls and books-and-records provisions of the Foreign Corrupt Practices Act. The FCPA violations arose from a payment its Chinese subsidiary, Nu Skin (China) Daily Use & Health Products Co. Ltd. (Nu Skin China), made to a charity to obtain the influence of a high ranking Chinese Communist party official to impact an on-going provincial agency investigation.
September 13, 2016 – Jun Ping Zhang
The Securities and Exchange Commission has instituted cease-and-desist proceedings against Jun Ping Zhang, a U.S. citizen and former Chairman and CEO of Harris Corporation’s wholly owned, China-based subsidiary Hunan CareFx Information Technology, LLC. Ping violated the anti-bribery provisions of the FCPA by facilitating an ongoing bribe scheme at CareFx China whereby illegal gifts were given to Chinese government officials to obtain and retain business. In so doing, Ping violated, and caused Harris to violate, the books and records provisions of the FCPA by knowingly allowing and facilitating the entry of false information in CareFx China’s books and records, thereby circumventing Harris’s system of internal accounting controls.
August 30, 2016 – AstraZeneca
The Securities and Exchange Commission announced that U.K.-based biopharmaceutical company AstraZeneca PLC has agreed to pay more than $5 million to settle charges that it violated the books and records and internal controls provisions of the Foreign Corrupt Practices Act (FCPA) as a result of its wholly-owned subsidiaries in China and Russia making improper payments to foreign officials.
August 11, 2016 – KEY Energy Services, Inc.
The Securities and Exchange Commission has announced that Houston-based Key Energy Services, Inc. has agreed to pay US$ 5 million in disgorgement to settle charges that it violated the internal controls and books-and-records provisions of the Foreign Corrupt Practices Act (FCPA). The violations arose from payments its Mexican subsidiary, Key Mexico, made to a contract employee at Petroleos Mexicanos (Pemex), Mexico’s state-owned oil company.
July 25, 2016 – LATAM Airlines Group S.A.
LAN Airlines (now LATAM Airlines Group) has settled charges with the SEC that it failed to keep accurate books and records and maintain adequate internal accounting controls. In 2006 and 2007, Ignacio Cueto Plaza, then CEO of LAN Airlines, allegedly authorized USD 1.15 million in improper payments to a third party consultant in Argentina in connection with LAN Airlines’ attempt to settle labor disputes between LAN Airlines’ subsidiary in Argentina, LAN Argentina, and its employees. The consultant was a Cabinet Advisor in the Ministry of Federal Planning, Public Investment and Service, Department of Transportation. The payments were disguised through a sham consulting agreement. LAN has agreed to pay USD 9.4 million in disgorgement and prejudgment interest and in a non-prosecution agreement announced by the U.S. Deparment of Justice LAN has agreed to pay a USD 12.75 million penalty.
July 11, 2016 – Johnson Controls
Manufacturing company Johnson Controls agree to pay US$14 million to settle Foreign Corrupt Practices Act charges with the Securities and Exchange Commission over conduct in China, while the Justice Department closed its investigation into the matter partly because of extensive cooperation by the company.
July 8, 2016 – SME (not identified due to ongoing legal proceedings)
The UK Serious Fraud Office’s second application for a Deferred Prosecution Agreement has been approved by Lord Justice Leveson at Southwark Crown Court. The counterparty to the DPA is a UK SME that cannot currently be named due to ongoing legal proceedings. As a result of the DPA, the company will pay financial orders of £6.553.085, comprised of a £6,201,085 disgorgement of gross profits and a £32,000 financial penalty. £1.953.085 of the disgorgement will be paid by the SME’s US registered parent company as repayment of a siginificant proportion of the dividends that it received from the SME over the indictment period.
June 21, 2016 – Analogic Corp.
The Securities and Exchange Commission has announced that Massachusetts-based medical device manufacturer Analogic Corp. and its wholly owned Danish subsidiary have agreed to pay nearly US$ 15 million to settle parallel civil and criminal actions involving Foreign Corrupt Practices Act (FCPA) violations.
June 8, 2016 – Valeant
Valeant has agreed to pay US$ 54 million to settle a 2013 US DOJ investigation into sales and promotional practices related to products that, at the time, were owned by Salix Pharmaceuticals. Valeant bought Salix last year.
June 7, 2016 – Akamai Technologies
Akamai Technologies has agreed to pay US$652,452 in disgorgement plus $19,433 in interest in addition to a non-prosecution agreement with the SEC. According to the NPA, Akamai’s foreign subsidiary arranged US$40,000 in payments to induce government-owned entities to purchase more services than they actually needed. Employees at the foreign subsidiary violated the company’s written policies by providing improper gift cards, meals, and entertainment to officials at these state-owned entities to build business relationships. The NPA stipulates that the company will not be charged with violations of the FCPA.
June 7, 2016 – Nortek, Inc.
Rhode Island-based residential and commerical building products manufacturuer Nortek, Inc has agreed to pay $291,403 in disgorgement plus $30,655 in interest in addition to a non-prosecution agreement with the SEC. According to the NPA, approximately $290,000 in improper payments and gifts including cash payments, gift cards, meals, travel, accommodations and entertainment were made to Chinese officials by Nortek’s subsidiary in order to receive preferential treatment, relaxed regulatory oversight, reduced customs duties, taxes, and fees. The NPA stipulates that the company will not be charged with violations of the FCPA.
May 12, 2016 – Peter Chapman (Innovia Securency)
Peter Chapman, a former manager of polymer banknote manufacturer Innovia Securency PTY, has been sentenced for two and a half years for corruption-related offenses. Chapman was convicted on four counts of making corrupt payments to a foreign official. The Serious Fraud Office had accused Chapman of bribing an agent of Nigerian Security Printing and Minting to convince them to purchase polymer substrate from Chapman’s own company. The total value of the bribes relating to the charges amounts to US$205K (£141K).
May 3, 2016 – Siemens
The German technology giant has agreed to pay US$ 43 million (€38 million) to settle a corruption case in Israel. Siemens also agreed to appoint an external inspector to supervise its business in Israel. At issue are allegations that Siemens bribed six senior executives of the Israel Electric Corporation (IEC) over ten years ago in a bid to supply turbines. These six individuals now face charges in Tel Aviv for bribery and money laundering, as they are suspected of accepting bribes of hundreds of thousands of dollars in cash or in transfers to Swiss bank accounts.
April 7, 2016 – Las Vegas Sands
The U.S. Securities and Exchange Commission has announced that Las Vegas Sands Corp. has agreed to pay US$9 million to settle charges that it violated the Foreign Corrupt Practices Act (FCPA) by failing to properly authorize or document millions of dollars in payments to a consultant facilitating business activities in China and Macao.
April 7, 2016 – Giuseppe Orsi and Bruno Spagnolini
The former boss of Italian aerospace and defence group, Finmeccanica, Giuseppe Orsi, was sentenced on April 7 by the Milan appeals court to four and a half years in jail for false accounting and corruption. Also handed a four-year jail term on the same charges was Bruno Spagnolini, former head of AgustaWestland, a subsidiary of Finmeccanica. The case against the two resulted from an investigation launched in 2012 into the sale of 12 luxury helicopters to India’s government. India cancelled the deal with AgustaWestland in January 2014 amid allegations that the company paid bribes to win the €556 million contract.
April 4, 2016 – Braid Logistics
Braid Logistics, a Glasgow-based logistics firm has agreed to pay £2.2 million to the Crown after it uncovered illegal bribery operations in its own organisation. An investigation revealed breaches of the UK Bribery Act 2010 which forbids bribes being paid to gain business. Braid sacked those involved and self-reported the case to the Crown Office.
March 23, 2016 – Novartis AG
Swiss company Novartis AG has agreed to pay US$25 million to settle charges that it violated the Foreign Corrupt Practices Act when two China-based subsidiaries bribed doctors and others to prescribe drugs.
March 3, 2016 – Mikhail Gourevitch, NORDION
The SEC has charged Mikhail Gourevitch with violating the FCPA by scheming to bribe Russian government officials and obtain drug approvals for his then-employer while secretly enriching himself. The SEC also charged the company with lacking sufficient internal controls to detect and prevent the scheme. Gourevitch, whose employment was terminated by Nordion, agreed to settle the charges by paying US$100,000 in disgorgement, $12,950 in prejudgment interest, and a $66,000 penalty. Nordion agreed to pay a $375,000 penalty to settle charges that it lacked internal accounting controls and basic FPA due diligence to prevent Gourevitch from conducting the scheme. Nordion and Gourevitch consented to SEC orders without admitting or denying the findings that Nordion violated the books-and-records and internal accounting controls provisions of the Securities Exchange Act of 1934 while Gourevitch violated the anti-bribery, books -and-records, and false records provisions.
March 1, 2016 – Olympus Corp. of the Americas
The US’s largest distributor of endoscopes and related equipment will pay US$623.2 million to resolve criminal charges and civil claims relating to a scheme to pay kickbacks to doctors and hospitals. A subsidiary of the distributor will pay US$22.8 million to resolve criminal charges relating to the Foreign Corrupt Practices Act in Latin America.
March 1, 2016 – Qualcomm
The US Securities and Exchange Commission has announced that Qualcomm Incorporated has agreed to pay US$7.5 million to settle charges that it violated the FCPA by hiring relatives of Chinese government officials who played a role in selecting the company’s mobile technology products and for providing gifts, travel, and entertainment to try to influence officials at government-owned telecom companies in China.
February 19, 2016 – Sweett Group
AIM-listed surveyor becomes first company to be sentenced for bribery over corrupt payments. Sweett Group made corrupt payments to an influential Arab executive to secure work on a luxury hotel project in Dubai. The company received a fine of £1.4 million and an £851,000 confiscation order after it admitted that it had failed to prevent the bribery of Khaled Al Badi.
February 26, 2016 – TOTAL
French oil company Total SA was fined 750,000 euros (US$826,125) after judges found it guilty of corruption in Iraq’s oil-for-food program. The Paris court of appeals found Total guilty of corrupting foreign civil servants. The penalty comes after Total was cleared of all charges by a Paris court in 2013.
February 19, 2016 – Vimpelcom
VimpelCom Ltd, an Amsterdam-based telecommunications operator, said on Thursday it would pay $795 million to resolve U.S. and Dutch probes into a bribery scheme in Uzbekistan, in the second largest global anti-corruption settlement in history. The settlement was announced in a federal court in Manhattan, where a subsidiary pleaded guilty to conspiring to violate a U.S. anti-corruption law by paying $114 million in bribes from 2006 to 2012 to a Uzbekistan official. The official, described in court papers as high-ranking and a relative of Uzbek President Islam Karimov, matched the description of his daughter, Gulnara Karimova, who has long been identified as being at the center of the probe.
February 16, 2016 – PTC Inc.
Two subsidiaries of Massachusetts software company PTC Inc. entered into a non-prosecution agreement with the US DOJ and agreed to pay a US$14.54 million penalty to resolve the government’s investigation into whether the companies improperly provided recreational travel to Chinese government officials in violation of the FCPA. In addition, the SEC announced its first deferred prosecution agreement (DPA) with an individual in an FCPA case. FCPA charges will be deferred for three years against Yu Kai Yuan, a former employee of one of PTC’s Chinese subsidiaries, as a result of the significant cooperation he provided during the SEC’s investigation.
February 4, 2016 – SciClone
SEC announces that California-based SciClone Pharmaceuticals has agreed to pay approximately $12.8 million in connection with charges that it made improper payments to healthcare professionals in China.
February 1, 2016 – SAP
SEC announces that German-based software manufacturer SAP SE (SAP) has agreed to disgorge $3.7 million in profits to settle charges that it violated the FCPA’s accounting provisions in connection with its government sales efforts in Panama. The charges stem from the actions of Vicente Garcia, former head of Latin American sales for SAP International, Inc. who last year pleaded guilty to a criminal information filed by the DoJ and settled civil FCPA charges brought by the SEC.
December 8, 2015 – Managers at Direct Access Partners
Sentences have been handed down for employees of Direct Access Partners and participants in a scheme to bribe a Venezuela state bank official. Jose Alejandro Hurtado was sentenced to 3 years in prison; Tomas Clarke, a former senior vice president received a 2 year sentence and was ordered to forfeit nearly US$5.8 million while the former CEO Benito Chinea and former managing director, Joseph DeMeneses were both sentenced to four years in prison and forfeitures of $3.6 million and $2.7 million. Ernesto Lujan, a former managing partner, also received a two year sentence and was ordered to forfeit $18.5 million. Direct Access Partners paid bribes to get business from a state-owned development bank in Venezuela, according to allegations by U.S. prosecutors. Both Clarke and Lujan cooperated with prosecutors. The defendants admitted to paying US$5 million to Maria de los Angeles Gonzalez de Hernandez, a vice president at state-owned Banco de Desarollo Economico y Social de Venezuela (Bandes). She has pleaded guilty and will be sentenced in January.
December 3, 2015 – Pierre Achach
A French Court has sentenced Pierre Achach, a French businessman and number two at Surestream Petroleum, to a 30 month suspended sentence and a 1.5 million euro fine for fraud, tax evasion and corruption. The corruption charge results from Mr. Achach’s gift of a return airline ticket (Bujumbura – Paris) to the Burundi Minister of Energy, Moise Bucuni.
November 30, 2015 – Standard Bank
SFO – The Serious Fraud Office’s first application for a Deferred Prosecution Agreement has been approved. The counterparty to the DPA, Standard Bank Plc (now known as ICBC Standard Bank Plc) (“Standard Bank”), was the subject of an indictment alleging failure to prevent bribery contrary to section 7 of the Bribery Act 2010. This indictment, pursuant to DPA proceedings, was immediately suspended. This was also the first use of section 7 of the Bribery Act 2010 by any prosecutor.
October 5, 2015 – Bristol-Myers Squibb
The US Securities & Exchange Commission has announced that Bristol-Myers Squibb has agreed to pay more than US$14 million in fines to settle charges that its joint venture in China paid cash and other benefits to state-owned hospitals in exchange for prescription sales. BMS also agreed to report to the SEC for two years on the status of its implementation of FCPA and anti-corruption compliance measures.
September 29, 2015 – Hyperdynamics Corporation
The US SEC has accepted a settlement offer from Hyperdynamics Corp. to resolve allegations of foreign bribery violations. The Houston-based oil and gas exploration company agreed to pay a US$75,000 civil penalty. The SEC alleged in a cease-and-desist order that Hyperdynamics failed to accurately record payments made by a Guinean subsidiary, a violation of the books-and-records provision of the FCPA. The SEC took into consideration the remedial actions undertaken by the company and the cooperation it afforded the Commission. In May the company was cleared of FCPA allegations by the US DOJ.
September 28, 2015 – Hitachi, Ltd.
The Securities and Exchange Commission has charged Toyko-based conglomerate Hitachi, Ltd. with violating the Foreign Corrupt Practices Act (FCPA) when it inaccurately recorded improper payments to South Africa’s ruling political party in connection with contracts to build two multi-billion dollar power plants. Hitachi has agreed to pay $19 million to settle the SEC charges.
September 25, 2015 – Brand Rex
The Scottish Civil Recovery Unit recovered £212,800 under an agreed civil settlement with a Glenrothes based company which accepted that it had benefited from unlawful conduct by a third party. Brand-Rex Limited is a developer of cabling solutions for network infrastructure and industrial applications. In June 2015, solicitors acting on behalf of Brand-Rex contacted the Crown Officer to disclose an instance of failing to prevent bribery by a third party associated with the company.
August 31, 2015 – Daren Condrey
Daren Condrey, 50, pleaded guilty on June 17, 2015 to conspiring to violate the FCPA and will be sentenced on November 2, 2015. Mr Condrey’s offense is connected to a case where Russian official, Vadim Mikerin, of Chevy Chase, Maryland, pleaded guilty to conspiracy to commit money laundering in connection with his role in arranging over US$ 2 million in corrupt payments to influence the awarding of contracts with the Russian state-owned nuclear energy corporation.
August 18, 2015 – BNY Mellon
The Securities and Exchange Commission has announced that BNY Mellon agreed to pay US$14.8 million to settle charges that it violated the Foreign Corrupt Practices Act (FCPA) by providing valuable student internships to family members of foreign government officials affiliated with a Middle Eastern sovereign wealth fund.
August 12, 2015 – Vicente E. Garcia, former VP SAP SE
The SEC has announced that a former executive for a worldwide software manufacturing company has agreed to settle charges that he violated the FCPA by bribing Panamanian government officials through an intermediary to procure software license sales. Vicente Garcia, former VP of global and strategic accounts for SAP SE consented to the entry of the cease-and-desist order and agreed to pay disgorgement of US$85,965 which is the total amount of kickbacks he received plus prejudgment interest of US6,430 for a total of US$92,395. In a parallel action the US DOJ announced a criminal action against Garcia to which he has pleaded guilty. In December he was sentenced to 22 months in prison.
July 28, 2015 – Mead Johnson Nutrition
The SEC has announced that Mead Johnson Nutrition Company will settle charges that its Chinese subsidiary made improper payments to health care professionals at government-owned hospitals to recommend the company’s infant formula to patients who were new or expectant mothers in violation of the FCPA. Mead Johnson Nutrition has agreed to pay US$ 12 million to settle the SEC’s finding.
July 17, 2015 – Louis Berger International
Louis Berger International, the New Jersey-based engineering, architecture and construction management company entered into a deferred prosecution agreement (DPA) with the DOJ, admitting to violations of the FCPA. LBI agreed to pay a US$17.1 million criminal penalty and to implement rigorous internal controls, including retention of a compliance monitor for at least three years.
June 16, 2015 – Joseph Sigelman, former co-chief executive officer of PetroTiger Ltd.
The former co-chief executive officer (CEO) of PetroTiger Ltd. – a British Virgin Islands oil and gas company with operations in Colombia and formerly with an office in New Jersey – pleaded guilty to conspiring to pay bribes to a foreign government official in violation of the Foreign Corrupt Practices Act (FCPA). Joseph Sigelman is the third former PetroTiger executive to plead guilty in the case. The case was brought to the attention of the DOJ through a voluntary disclosure by PetroTiger, which cooperated fully with the DOJ’s investigation. Mr Sigelman was sentenced to probation and ordered to pay a US$100,000 fine and US$239,015 in restitution.
June 17, 2015 – IAP Worldwide Services Inc.
Florida based defense company IAP Worldwide Services Inc will pay US$7.1 million to settle a U.S. investigation into an alleged conspiracy to bribe Kuwaiti officials to win a government contract, the US Department of Justice has said. In addition, a former vice president of IAP has pleaded guilty to conspiracy to violate the FCPA for his involvement in the bribery scheme.
May 20, 2015 – BHP Billiton
The US Securities and Exchange Commission has charged global resources company BHP Billiton with violating the FCPA when it sponsored the attendance of foreign government officials at the Summer Olympics in China. BHP Billiton has agreed to pay a US$ 25 million penalty to settle the SEC’s charges.
May 7, 2015 – The Algiers Criminal Court
An Algerian court sentenced to jail 14 people and fined seven foreign firms from Europe, Asia and Canada capping a high-profile corruption case. The Algiers criminal court sentenced to 10 years Chani Mejdoub, a financial consultant who also holds Luxembourg nationality, and Mohamed Khelladi, a former high-ranking official at the ministry of public works. A business man and another former official at the public works ministry were sentenced to seven years in jail each and three year sentences were handed down to two other defendants. Seven firms – including from China, Japan, Switzerland, Canada, Spain and Portugal – were each fined €50 000.
April 22, 2015 – SEC
The US Securities and Exchange Commission (SEC) has announced the award of more than a million dollars to a compliance professional who provided information that assisted the SEC in an enforcement action against the whistleblower’s company.
April 8, 2015 – FLIR
The SEC charged Oregon-based FLIR Systems Inc. with violating the FCPA by financing what an employee termed a “world tour” of personal travel for government officials in the Middle East who played key roles in decisions to purchase FLIR products. FLIR has agreed to settle the US SEC’s charges by paying more than US$9.5 million and reporting its FCPA compliance efforts to the agency for the next two years.
March 18, 2015 – Biomet Inc.
Orthopedic device maker Biomet Inc. said in an SEC filing that the DOJ has extended for another year its 2012 deferred prosecution agreement that was part of a 2012 FCPA enforcement action.
February 24, 2015 – Goodyear
The US SEC charged Goodyear Tire & Rubber Company with violating the FCPA when its subsidiaries paid bribes to land tire sales in Kenya and Angola. Goodyear agreed to pay more than US$ 16 million to settle the SEC’s charges.
January 22, 2015 – The PBSJ Corporation
The Securities and Exchange Commission charged a former officer at a Tampa, Florida-based engineering and construction firm with violating the FCPA by offering and authorizing bribes and employment to foreign officials to secure Qatari government contracts. The PBSJ Corporation will enter into a two year deferred prosecution agreement and pay the SEC US$3.4 million in disgorgement and interest while the former officer involved in the scheme will pay a fine of US$50,000.