Background

The Department of Justice reports that a German bank has agreed to pay more than $130 million to resolve investigations into violations of the Foreign Corrupt Practices Act and commodities fraud. This amount includes an $85.2 million criminal penalty, $681,480 in criminal disgorgement, $1.2 million in victim compensation, and $43.3 million in disgorgement and pre-judgment interest to be paid to the Securities and Exchange Commission.

According to a DOJ press release, the bank was charged with operating a seven-year scheme to conceal corrupt payments and bribes made to third-party intermediaries to obtain business by falsely recording them on the bank’s books and records, as well as related internal accounting control violations. The bank was also charged with a separate scheme to engage in fraudulent and manipulative commodities trading practices involving publicly-traded precious metals futures contracts.

The DOJ states that it entered into a three-year deferred prosecution agreement with the bank that reflects a number of factors. On the negative side, the bank failed to voluntarily disclose the conduct and the nature and seriousness of the offense, which included corrupt payments, willful violations of the FCPA accounting provisions, and commodities trading violations in three countries. However, the bank also received full credit for its cooperation with the DOJ’s investigations and its significant remediation. As a result, penalties associated with both the FCPA and wire fraud conspiracies reflect 25 percent off the middle of the otherwise-applicable U.S. Sentencing Guidelines fine range.

For more information on the FCPA, please contact Kristine Pirnia.

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