The Department of Justice announced April 30 that it has declined to prosecute a company that self-disclosed criminal violations of U.S. export control laws by a former employee.
That individual was sentenced to 20 months in prison after pleading guilty to violating the Export Administration Regulations in connection with the exportation of software to a university in China on the Commerce Department’s Entity List. The DOJ said this individual willfully exported the software without the required license, used an intermediary to complete the export to avoid detection, and embezzled tens of thousands of dollars in software license sales by directing purchasers to make payment to a personal account. When confronted about the scheme the individual fabricated evidence that he had conducted due diligence on the purchasers before eventually admitting to the unlicensed export.
According to the DOJ, the company self-disclosed the crime soon after learning about it, fully cooperated with the criminal investigation, fired the individual, disciplined a supervisory employee, and significantly improved its internal controls and compliance program. The DOJ therefore declined prosecution, which it said is the second time it has done so under an enforcement policy that creates a general presumption of non-prosecution for companies that (1) voluntarily self-disclose potentially criminal violations arising out of or relating to the enforcement of export control or sanctions laws, (2) fully cooperate, and (3) timely and appropriately remediate.
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