It was the busiest three months ever for FCPA-related enforcement. Here’s what happened since January 1st:
Indictments, guilty pleas, and sentencings. Some aren’t strictly FCPA actions, as in the Haiti telecom bribe case. But they’re all related to or part of an FCPA prosecution.
Natco (January 6) resolved civil books and records and internal controls charges with the SEC. Agreed to a $65,000 civil penalty.
Shot-Show Indictments (January 19) charged 22 individuals:
• Daniel Alvirez, 32, Arkansas
• Lee Allen Tolleson, 25, Arkansas
• Helmie Ashiblie, 44, Woodbridge, Va.
• Andrew Bigelow, 40, Sarasota, Fla.
• R. Patrick Caldwell, 61, Sunrise, Fla.
• Stephen Gerard Giordanella, 50, Sunrise, Fla.
• Yochanan R. Cohen, a/k/a Yochi Cohen, 47, San Francisco
• Haim Geri, 50, North Miami Beach, Fla.
• Amaro Goncalves, 49, Springfield, Mass.
• John Gregory Godsey, a/k/a Greg Godsey, 37, Decatur, Ga.
• Mark Frederick Morales, 37, Decatur, Ga.
• Saul Mishkin, 38, Aventura, Fla.
• John M. Mushriqui, 28, Upper Darby, Penn.
• Jeana Mushriqui, 30, Upper Darby, Penn.
• David R. Painter, 56, U.K.
• Lee M. Wares, 43, U.K.
• Pankesh Patel, 43, U.K.
• Ofer Paz, 50, Israel
• Jonathan M. Spiller, 58, Ponte Vedra Beach, Fla.
• Israel Weisler, a/k/a Wayne Weisler, 63, Stearns, Ky.
• Michael Sachs, 66, Stearns, Ky.
• John Benson Wier III, 46, St. Petersburg, Fla.
Richard T. Bistrong (January 21), the key intermediary identified as “Individual 1” in the Shot Show indictments (above) was charged with conspiracy to violate the FCPA.
Jim Bob Brown (January 28), 48, former Willbros employee, was sentenced in federal court in Houston to one year and one day in prison and fined $17,500 for conspiracy to violate the FCPA.
Jason Edward Steph (January 28), 40, former Willbros employee, was sentenced to 15 months and fined $2,000 for conspiracy to violate the FCPA.
John W. Warwick (February 10), 64, of Virginia Beach, Va., pleaded guilty to one count of conspiracy to violate the FCPA.
Jean Fourcand (February 19), 62, of Miami, pleaded guilty to laundering money used to bribe former officials at Haiti’s state-owned telecommunications company.
BAE Systems plc (March 1) pleaded guilty to conspiring to defraud the U.S. by impairing and impeding its lawful functions, to make false statements about its Foreign Corrupt Practices Act compliance program, and to violate the Arms Export Control Act and International Traffic in Arms Regulations. It was fined $400 million.
Robert Antoine (March 12), 62, pleaded guilty to a money-laundering conspiracy (see Jean Fourcand above).
Nexus Technologies, Inc. (March 16) pleaded guilty to conspiracy, and to violating the Foreign Corrupt Practices Act, and the Travel Act in connection with commercial bribes and money laundering.
Nam Nguyen (March 16), 54, the president and owner of Nexus Technologies, pleaded guilty to conspiracy, a substantive FCPA violation, a violation of the Travel Act, and money laundering.
An Nguyen (March 16), 34, an employee of Nexus Technologies, pleaded guilty to conspiracy, a substantive FCPA violation, a violation of the Travel Act, and money laundering.
Kim Nguyen (March 16), 41, another sibling, pleaded guilty to conspiracy, a substantive FCPA violation, and money laundering.
Innospec (March 18) pleaded guilty to wire fraud and FCPA violations. In its DOJ, settlement, it will pay a $14.1 million criminal fine and retain an independent compliance monitor for three years. In its SEC settlement, It will disgorge $11.2 million in profits for violating the FCPA’s anti-bribery, internal controls, and books and records provisions.
Daimler AG (March 24) charged in a criminal information with one count of conspiracy to violate the FCPA (18 U.S.C. §371) and one count of violating the books and records provisions (15 U.S.C. §§78m(b)(2)(A), 78m(b)(5), and 78ff(a), and 18 U.S.C. §2). Daimler is expected to pay $185 million — $93.6 million for a criminal fine and $91.4 million in civil penalties. Hearing on April 1, 2010.
Gerald and Patricia Green’s sentencing in Los Angleles was postponed from January 21 to April 1, 2010 at 8:00 am.
Hans Bodmer (SDNY 03-947): sentencing was scheduled for February 23, 2010. Docket indicates a sealed document was placed in vault on March 25, 2010 (2004 – Bourke/Kozeny – Note: Was not convicted on FCPA count against him). Sentencing may be delayed until the outcome of Bourke’s appeal.
Albert “Jack” Stanley’s sentencing in Houston was rescheduled from February 24 to May 26, 2010 at 10:30 am.
Leo Winston Smith (CDCA 07-69): sentencing delayed from March 22, 2010; currently scheduled for May 10, 2010 (2007 – Pacific Consolidated).
Charles Paul Edward Jumet (EDVA 09-397): sentencing delayed from March 26, 2010; currently scheduled for April 19, 2010 (2009 – Panama; PECC).
Juan Diaz (SDFL 09-20346): sentencing delayed from March 31, 2010; sentencing currently scheduled for May 27, 2010 (2009 – Haiti Telecom).
Antonio Perez (SDFL 09-20347): sentencing delayed from March 31, 2010; sentencing currently scheduled for May 27, 2010 (2009 – Haiti Telecom).
Viktor Kozeny (January 26), 46, the Czech-born fugitive wanted in the United States for conspiracy to violate the FCPA won a decision in the Bahamas court of appeal that continues to block his extradition to the U.S. The U.S. may appeal to the U.K. Privy Council.
Jeffrey Tesler (March 25), 61, a U.K. citizen indicted in February 2009 by a federal grand jury in Houston for being KBR’s middleman in Nigeria. A judge in London ruled he should be extradited to the U.S. to face trial. His appeal is expected to be lengthy.
In the pipeline. Here are companies that during the quarter announced possible FCPA settlements:
ABB reserve of $850 million
Alcatel-Lucent reserve of $137.4 million
ENI reserve of €250 million
Pride International, Inc. reserve of $56.2 million
Technip reserve of €245 million
Veraz reserve of $300,000
Civil suits. Private parties have no right of action under the FCPA. Only the DOJ and SEC can enforce it. Plaintiffs bring FCPA-related claims under RICO (18 U.S.C. § 1962(c)), conspiracy to violate RICO (18 U.S.C. § 1962(d)), fraud, civil conspiracy, breach of fiduciary duties, and others.
A couple of noteworthy FCPA-related civil suit developments during the quarter were:
Dow Chemical A Delaware chancery court cited Dow’s corporate compliance program as a reason for dismissing a shareholder derivative suit against the company’s current directors that alleged they failed to prevent overseas bribery.
BAE A federal appeals court affirmed the dismissal of a shareholder derivative suit against some current and former directors and executives of U.K.-based BAE Systems PLC. The trial court applied English law to the case.
If we’ve missed any companies or individuals that should be included in FCPA-related actions, please let us know.
Special thanks to Marc Bohn for some of the sentencing information.