$75.5 Million in Penalties for Foreign Bribery Schemes in Asia and Africa
The Department of Justice reports that a U.S. manufacturer has entered into a non-prosecution agreement and agreed to pay a $20 million penalty to resolve an investigation into improper payments to government officials in Angola, Bangladesh, China, Indonesia, and Thailand to gain business in violation of the Foreign Corrupt Practices Act. In related proceedings, the company agreed to pay approximately $55 million in disgorgement to the Securities and Exchange Commission.
According to the DOJ, some parent-level and subsidiary-level employees, including executives, knew that some of the company’s foreign subsidiaries used third-party agents and distributors to make corrupt payments to foreign officials to obtain and retain business. When employees from a subsidiary expressed concerns that commission payments were being used for improper purposes, including potentially bribery, the company “nevertheless failed to implement and maintain a system of internal accounting controls designed to detect and prevent such corruption and otherwise illegal payments.” Between 2002 and 2013 the company’s subsidiaries paid approximately $13 million to third-party agents and distributors, a portion of which was used to make unlawful payments to obtain business, ultimately netting the company approximately $51 million in profits.
However, an agency press release states, the company voluntarily self-disclosed the misconduct, fully cooperated with the DOJ’s investigation (including conducting a thorough internal investigation and providing all relevant facts known to it), and took extensive remedial measures (including firing 13 employees and terminating relationships with 47 third-party agents and distributors). As a result, the penalty amount reflects a 50 percent reduction off the bottom of the U.S. Sentencing Guidelines fine range, which Assistant Attorney General Leslie Caldwell of the DOJ’s Criminal Division said “demonstrates the very real upside to coming in and cooperating with federal prosecutors and investigators.”
As part of its non-prosecution agreement the company has agreed to continue to cooperate with the DOJ in any ongoing investigations and prosecutions relating to the conduct at issue, to enhance its compliance program, and to report to the DOJ on the implementation of its enhanced compliance program.