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Evaluating Recent FCPA and Anti-Corruption Enforcement Actions to Identify Red Flags and Target Potential Risks. Bryan Daly Bethany Hengsbach Sheppard, Mullin, Richter & Hampton. Enforcement Trends. Increased enforcement Penalties Number of prosecutions/investigations
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Sheppard, Mullin, Richter & Hampton
FCPA Fines Imposed on Corporations
More government resources on the ground:
SEC now has FCPA-dedicated unit in San Francisco
FBI agents dedicated to the FCPA
Whistleblower provisions of the Dodd-Frank Act
CEO and Board Chairman sentenced to 46 months in prison, plus 2 years supervised release
3rd longest FCPA prison sentence in history
87 months (#1)
57 months (#2)
Improper payments to state-owned telecommunications company in Honduras
CEO and CFO convicted after 6 week trial
30% commission to agents in Mexico
No "smoking gun" evidence of actual knowledge
Face jail time and fines that cannot be paid by the company
Global anti-corruption settlements
$10 million to settle SEC charges of books and records and internal controls violations
Improper cash payments to government officials in South Korea and China
Giving gifts and paying travel and entertainment expenses that violated the FCPA
$14 million to settle DOJ and SEC charges
COO reported that the issue was known and was being dealt with while at the same time requesting that there be "[n]o more emails" about the issue
SEC described Maxwell\'s internal controls as "wholly inadequate"
JGC paid $220 million to settle DOJ charges
Independent compliance consultant for 2 years
Agent forfeited $149 million to the DOJ, the largest individual forfeiture in FCPA history
“Commissions” paid to intermediaries to secure contracts on Bonny Island in Nigeria
The “Bonny Island” settlements now total $1.5 BILLION
J&J subsidiaries paid public health workers in Greece, Poland and Romania to induce the purchase of J&J medical devices
Paid kickbacks in Iraq to obtain Oil for Food contracts
$70 million settlement with the DOJ and SEC, and entered into DPA with the DOJ
What does this mean for compliance?
Tone at the Top
Keep management informed
Keep Board and Audit Committee informed