By Thomas Fox
As December is a time for reflection on the past twelve months, I have been considering the FCPA year. I submit for your consideration my Top 10 Favorite FCPA Enforcement Actions for 2010. Happy Holidays to all!
2. Daimler-a company can receive credit for self-disclosure under the sentencing guidelines even if it does not self report a possible FCPA violation. The DOJ investigation was started by a whistleblower report to the DOJ but Daimler nevertheless received a two-point reduction in its culpability.
3. NATCO–if a company pays money that is an extortion payment, it must accurately report such payments on its books and records. Otherwise such payments violate the books and records component of the FCPA.
4. Nexus Technologies, Inc.–demonstrates the differences viewed by the courts and DOJ regarding sentencing of FPCA defendants. The sentencing recommendations by DOJ and sentences passed down by court were as follows:
- Nam Nguyen-DOJ recommended-14 to 17 years. Sentenced-16 months.
- An Nguyen-DOJ recommended-7 to 9 years. Sentenced-9 months.
- Kim Nguyen-DOJ recommended-6 to 7 years. Sentenced-Probation.
- Joseph Lukas-DOJ recommended 3 to 4 years. Sentenced-Probation
5. Nigerian Bribery Case-the conclusion of enforcement actions against Technip ($338 million) and Snamprogetti and ENI ($365 million) bring the total fines and penalties paid by companies involved in this matter approximately $1.28 billion to-date. Additionally, this month, one UK citizen, Wojciech Chodan was extradited from the UK, brought to the US and has now pled guilty to violation of the FCPA. Another UK citizen, Jeffery Tesler, has appealed his UK extradition order. In an interesting development, the country of Nigeria charged former Halliburton CEO Dick Chaney regarding the bribery payments and such charges were dropped for payment of a (reported) $250 million fine.
6. Panalpina Settlements–the largest one-day settlement of FCPA enforcement actions, which included Panalpina, Shell, Transocean, Pride, GlobalSantaFe [now owned by Transocean], Tidewater and Noble who received a NPA. In Appendix C to each DPA, (Appendix B to Noble’s NPA) is the DOJ’s most current views on the minimum best practices of a FCPA compliance program.
7. RAE Systems, Inc.–companies are fully liable for their joint ventures actions and that even with actual knowledge of FCPA violations, conduct during the DOJ investigation can result in a Non-Prosecution Agreement. Appendix B of the DPA provides additional guidance on due diligence to be performed on JVs prior to purchase of any ownership interest.
8. Gerald and Patricia Green-two individuals convicted of FCPA violations at trial in July, 2009. The DOJ had originally sought a sentence of 25 years for Gerald Green (later reduced to requesting 10 years) and a ten year sentence for Patricia Green. U.S. District Judge George Wu sentenced the couple to six months each. While this sentence reduction may result in more personal freedom, the DOJ has obtained such complete forfeiture of the couples’ assets such that they have filed in forma pauperis appeals.
10. Innospec-the company had its agreed to fines and penalties of $60 million for its FCPA violations reduced to approximately $11.2 million based upon the company’s inability to pay.