A Singapore-based company and its wholly owned U.S. subsidiary have agreed to pay a combined total penalty of more than $422 million to resolve charges with authorities in the U.S., Brazil, and Singapore arising out of a decade-long scheme to bribe officials in Brazil. A Department of Justice press release states that this scheme resulted in these companies paying about $55 million in bribes through a series of shell companies and receiving more than $350 million from business corruptly obtained.
According to admissions and court documents, beginning by at least 2001 and continuing until at least 2014 the parent company conspired to violate the Foreign Corrupt Practices Act by paying bribes to officials at a Brazilian state-owned company and the then-governing political party in Brazil to win 13 contracts. The company effectuated and concealed the bribes by paying outsized commissions to an intermediary, under the guise of legitimate consulting agreements, who then made payments for the benefit of the Brazilian officials and the Brazilian political party.
Pursuant to a deferred prosecution agreement with the DOJ the company will pay a $105.6 million criminal penalty to the U.S. and has committed to implement rigorous internal controls and cooperate fully with the DOJ’s ongoing investigation. The U.S. will credit the amount the company pays to Brazil and Singapore under their respective agreements, with Brazil receiving $211.1 million and Singapore receiving up to $105.6 million. The DOJ has also unsealed charges against a former senior member of the company’s legal department, who has pleaded guilty to one count of conspiracy to violate the FCPA and is awaiting sentencing.
The DOJ notes that the criminal penalty reflects a 25 percent reduction off the bottom of the applicable U.S. Sentencing Guidelines fine range because the parent and subsidiary companies offered substantial cooperation with the department’s investigation and took extensive remedial measures. For example, the parent company has terminated and otherwise disciplined employees involved in the criminal conduct and has implemented an enhanced system of compliance and internal controls to address and mitigate corruption risks.
Copyright © 2020 Sandler, Travis & Rosenberg, P.A.; WorldTrade Interactive, Inc. All rights reserved.