A Chilean company has agreed to pay a total of more than $30 million in criminal and civil penalties in connection with payments made to politically-connected individuals in Chile in violation of the Foreign Corrupt Practices Act. Under a deferred prosecution agreement with the Department of Justice the company will pay a $15.5 million criminal penalty, continue to cooperate with the DOJ’s investigation, enhance its compliance program, implement rigorous internal controls, and retain an independent corporate compliance monitor for two years. The company will also pay a $15 million penalty to the Securities and Exchange Commission.
According to a DOJ press release, the company admitted that it knowingly failed to implement internal controls sufficient to ensure that payments from a fund under the control of one of its officers and high-level executives were made for services received and in compliance with Chilean law. The company also admitted to falsifying its books and records to conceal payments to vendors associated with politicians by logging them as consulting and professional services the company never received.
The DOJ states that the company received a 25 percent reduction off the low end of the applicable U.S. Sentencing Guidelines fine range because of its full cooperation and substantial and ongoing remediation. The DPA does require an independent compliance monitor because many of the company’s compliance enhancements were more recent, but the term of the monitor is two years and the company will be allowed to self-report for the third year due to the company’s size and risk profile as well as the enhancements it has already made.