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Largest Ever Criminal Fine for Foreign Bribery Imposed

Tuesday, November 17, 2015
Sandler, Travis & Rosenberg Trade Report

The Department of Justice announced Nov. 13 the largest criminal fine ever imposed in a Foreign Corrupt Practices Act case. DOJ said the $772.3 million fine was levied on a French company to resolve charges related to a widespread corruption scheme involving secret bribes paid to government officials in countries around the world.

A DOJ press release states that the company and several of its subsidiaries paid bribes to government officials and falsified books and records in connection with power, grid and transportation projects for state-owned entities, including in Indonesia, Egypt, Saudi Arabia, the Bahamas and Taiwan. In total, these entities paid more than $75 million to secure more than $4 billion in projects with a profit of approximately $300 million. DOJ adds that the company and its subsidiaries attempted to conceal the bribery scheme by retaining consultants who purportedly provided consulting services on behalf of the companies but who actually served as conduits for corrupt payments to the government officials. 

According to the press release, the fine imposed reflects a number of factors.

- the company’s failure to voluntarily disclose the misconduct even though it was aware of related misconduct at a U.S. subsidiary that previously resolved corruption charges with the DOJ in connection with a power project in Italy

- the company’s refusal to fully cooperate with the DOJ investigation for several years (although it did begin providing thorough cooperation after the DOJ publicly charged several company executives)

- the breadth of the companies’ misconduct, which spanned many years, occurred in countries around the globe and in several business lines, and involved sophisticated schemes

- the company’s lack of an effective compliance and ethics program at the time of the conduct

- the company’s prior criminal misconduct, including conduct that led to resolutions with various other governments and the World Bank

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