A German company has agreed to pay approximately $231 million to settle charges that it violated the Foreign Corrupt Practices Act in connection with its participation in corrupt schemes to obtain business in multiple foreign countries, according to a Department of Justice press release.
Information from the DOJ and the Securities and Exchange Commission indicates that the company made nearly $30 million in improper payments to publicly-employed health and/or government officials in Saudi Arabia, Morocco, Angola, Turkey, Spain, China, Serbia, Bosnia, Mexico, and eight countries in West Africa to obtain or retain business. This included using sham consulting contracts, falsifying documents, and funneling bribes through a system of third-party intermediaries. Despite known red flags of corruption since the early 2000s, the SEC states, the company devoted insufficient resources to compliance, in some cases failing to take basic steps such as providing anticorruption training or performing due diligence on its agents. In many instances, senior management actively engaged in corruption schemes and directed employees to destroy records of the misconduct.
The company has entered into a non-prosecution agreement with the DOJ under which it agreed to pay a total criminal penalty of $84.7 million, continue to cooperate with the department’s investigation, enhance its compliance program, implement rigorous internal controls, and retain an independent corporate compliance monitor for at least two years. The DOJ states that while the company voluntarily self-disclosed the misconduct it failed to timely respond to certain DOJ requests, the misconduct occurred in 13 countries and yielded profits of more than $140 million, and the effectiveness of the company’s compliance enhancements has not yet been tested. The DOJ notes that while the company did not qualify for a declination under the Corporate Enforcement Policy it was afforded a reduction of 40 percent below the low end of the U.S. Sentencing Guidelines fine range.
The company will also pay the SEC $147 million in disgorgement and prejudgment interest.
For more information about the FCPA and ensuring your company is in compliance, please contact Kristine Pirnia at (202) 730-4964.