A U.S. company has entered into a non-prosecution agreement with the Department of Justice and agreed to pay $64.2 million in criminal penalties and disgorgement to resolve charges that it violated the Foreign Corrupt Practices Act.
According to a DOJ press release, between 2004 and 2010 one of the company’s subsidiaries partnered with a multinational bank to solicit business from state-owned financial institutions in Libya. During this time the bank paid more than $90 million to a Libyan “broker,” portions of which were paid to high-level Libyan officials to secure investments from Libyan state institutions for the bank. As a result of this scheme the bank obtained 13 investments and one restructuring from the Libyan state institutions worth a total of approximately $3.66 billion and earned profits of approximately $523 million. The company at issue, through its subsidiary, managed seven of these investments and earned profits of approximately $31.6 million.
The press release states that the company’s NPA with the DOJ includes (1) a $32.625 million penalty to be paid to the U.S. Treasury within five days, (2) disgorgement of $31.617 million, which will be credited against disgorgement paid to other law enforcement authorities within the first year of the agreement, (3) a commitment to continue to cooperate with the DOJ in any ongoing investigations and prosecutions relating to the conduct, including of individuals, and (4) a pledge to enhance the company’s compliance program and report on implementation.
The DOJ notes that it reached this resolution based on a number of factors, including (1) the company did not voluntarily and timely disclose the conduct at issue but fully cooperated in the investigation and fully remediated, (2) the misconduct involved only mid- to lower-level employees of a subsidiary and was not pervasive throughout the company or the subsidiary, (3) it was the bank that maintained the relationship with the Libyan broker and was responsible for originating and leading the scheme, (4) the profits earned by the company and its subsidiary were less than one-tenth of the profits earned by the bank, and (5) neither the company nor the subsidiary has a history of similar misconduct.
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