During the first quarter of 2011, two earlier FCPA-related indictments were disclosed. And there were four corporate actions, four guilty pleas, including two shot-show defendants and the former KBR middleman Jeffrey Tesler, who was hit with the biggest forfeiture order in FCPA history, and two sentencings of individuals to prison. Three issuers announced declinations (decisions not to bring enforcement actions) by the DOJ and SEC.
Here’s what happened:
Indicted / Arrested
Jorge Granados, 54, LatiNode’s s former CEO, and Manuel Caceres, 64, a former vice president, were indicted on December 14 by a federal grand jury. They face one count of conspiracy to violate the FCPA, 12 counts of violating the FCPA, five counts of money laundering, and one count of conspiracy to commit money laundering. The indictment also asks for criminal forfeiture. Their trial is set to start in September. (Revealed by unsealed court record on January 11.)
DOJ / SEC Enforcement Resolutions
Paul W. Jennings (January 24) a former CFO and CEO at Innospec, Inc. disgorged $116,092 plus prejudgment interest of $12,945 and paid a civil penalty of $100,000 to settled civil charges with the SEC. He was charged with falsely certifying to auditors from 2004 through 2009 that he had complied with Innospec’s Foreign Corrupt Practices Act compliance policy. The SEC said he also “signed annual and quarterly personal certifications pursuant to the Sarbanes-Oxley Act of 2002 in which he made false certifications concerning the company’s books and records and internal controls.
Maxwell Technologies Inc. (January 31) paid an $8 million criminal penalty to the DOJ and $6.3 million in disgorgement and prejudgment interest to the SEC to resolve bribery that occurred in China. The DOJ gave the company a three-year deferred prosecution agreement. Maxwell can pay the $8 million criminal penalty in three installments over two years.
Tyson Foods Inc. (February 10) paid a $4 million criminal penalty to the DOJ and $1.2 million in disgorgement and pre-judgment interest to the SEC to resolve charges related to illegal payments by company representatives to government-employed inspection veterinarians in Mexico and a cover-up of the payments.
IBM (March 18) disgorged $5.3 million and paid prejudgment interest of $2.7 million, and a $2 million civil penalty to resolve civil charges brought by the SEC for violating the books and records and internal control provisions of the Foreign Corrupt Practices Act. The company admitted making improper cash payments to government officials in South Korea and China, and giving gifts and paying travel and entertainment expenses that violated the FCPA.
Ball Corporation (March 24) paid a $300,000 penalty to settle civil FCPA books and records and internal control charges brought by the the SEC for bribes in Argentina.
Manuel Salvoch ( January 11) the former CFO of Latin Node Inc. was arrested and pleaded guilty (January 12) to one count of conspiracy to violate the FCPA.
Daniel Alvirez (March 1), a shot-show defendant, pleaded guilty to two counts of conspiracy to violate the FCPA.
Jeffrey Tesler (March 11) pleaded guilty after extradition from the U.K. of one count of conspiracy and one count of violating the FCPA. Tesler also agreed to forfeit $149 million. He was released on $50,000 cash bond and required to live in the Houston area until he is sentenced on June 22.
Jonathan Spiller (March 29), a shot-show defendant, pleaded guilty to one count of conspiracy to violate the FCPA.
Leo Winston Smith (sentenced in December, not announced by the DOJ or reported until January 7), 75, was sentenced in December to just six months in prison followed by six months of home confinement. The former director of sales and marketing for Pacific Consolidated Industries pleaded guilty in 2009 to conspiracy to violate the FCPA and to a tax charge. He admitted bribing an official from the U.K. Ministry of Defense in return for equipment orders. The government had asked for a 37-month sentence.
Antonio Perez (January 21), 52, of Miami, was sentenced to two years in prison and ordered to forfeit $36,375. He pleaded guilty in April 2009 to conspiring to making corrupt payments to officials of Haiti’s state-owned national telecommunications company, Telecommunications D’Haiti, in violation of Foreign Corrupt Practices Act and money laundering laws.
Declinations (decisions not to bring enforcement actions) by the DOJ / SEC
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Special thanks to a reader in D.C. for research assistance in creating this post.