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Self-Disclosure, Disgorgement, Remedial Measures Help Company Avoid Bribery Prosecution

Tuesday, July 11, 2017
Sandler, Travis & Rosenberg Trade Report

The Department of Justice has declined to criminally prosecute a U.S. engineering and construction firm for bribery of foreign officials, citing the company’s self-disclosure, remedial measures, and other factors. This decision appears consistent with an ongoing DOJ pilot program designed to motivate companies to voluntarily self-disclose Foreign Corrupt Practices Act-related misconduct and remediate flaws in their controls and compliance programs.

A DOJ investigation found that the company paid approximately $1.18 million in bribes to government officials in India in exchange for contracts resulting in approximately $4 million in net profits. All senior management at the company’s India subsidiary were aware of the bribes and approved or participated in the misconduct.

However, the DOJ decided to close its investigation without prosecution based on a number of factors, including the company’s (1) timely, voluntary self-disclosure; (2) thorough and comprehensive investigation; (3) full cooperation, including provision of all known relevant facts about the individuals involved in or responsible for the misconduct; (4) steps to enhance its compliance program and internal accounting controls; and (5) full remediation, including terminating all of the responsible executives and employees. In addition, the company agreed to disgorge $4.04 million in profits from the illegal behavior.

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