2012 Enforcement Index

Twelve companies settled FCPA enforcement actions in 2012 by paying a total of $259.4 million.

Five were pharmas or medical device makers — Biomet, Eli Lilly, Orthofix, Pfizer, and Smith & Nephew.

The year’s biggest FCPA case was Pfizer, which paid $60 million — not enough to put it on the all-time top ten list. But the $45.2 million it disgorged to the SEC as part of the settlement landed seventh on the top ten disgorgement list.

As always, enforcement actions involving parent and subsidiary companies were counted as one case.

For comparison, in 2011 15 companies paid $508.6 million; in 2010 23 companies paid $1.8 billion; in 2009 11 companies paid $644 million; and in 2008 11 companies paid $890.

Sixteen individuals were sentenced, including Jack Stanley, Jeffrey Tesler, and Wojciech Chodan from the TSKJ Nigeria enforcement actions.

One of the biggest news items of 2012 was the DOJ’s voluntary dismissal of the indictments against all 22 Africa sting defendants.

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Organizations (countries involved) U.S. enforcement agencies / financial penalties including fines, disgorgement, and interest:

Allianz SE (Indonesia), SEC, $12.4 million

Biomet Inc. (Argentina, Brazil, and China), DOJ / SEC, $22.8 million and deferred prosecution agreement with a compliance monitor for 18 months

BizJet International Sales and Support Inc. and its owner Lufthansa Technik AG (Latin America), DOJ / $11.8 million criminal fine and three-year deferred prosecution agreement

Data Systems & Solutions LLC (Lithuania), DOJ, $8.8 million and a two-year deferred prosecution agreement

Eli Lilly (Russia, China, Brazil, Poland), SEC, $29.4 million

Marubeni Corporation (Nigeria), DOJ,  $54.6 million criminal penalty with a two-year deferred prosecution agreement

Nordam Group Inc. (China), DOJ, $2 million and a three-year non-prosecution agreement

Oracle Corporation (India), SEC, $2 million

Orthofix International N.V. (Mexico), DOJ / SEC, $7.4 million and a three-year deferred prosecution agreement

Pfizer Inc. and its subsidiary Wyeth (Bulgaria, Croatia, Kazakhstan, and Russia) DOJ / SEC, $60 million and a two-year deferred prosecution agreement

Smith & Nephew (Greece), DOJ / SEC, $22.2 million with a compliance monitor for 18 months under a deferred prosecution agreement

Tyco International Ltd. (Saudi Arabia, Germany, China, Thailand, and Turkey), DOJ / SEC, $26 million

Individuals indicted, tried, or sentenced (includes cases of money-laundering only in FCPA-related actions):

Robert Antoine (Telecommunications D’Haiti S.A.M.), DOJ, had his 4 year prison sentence reduced to 18 months (money laundering only)

Fernando Basurto Jr. (ABB agent), DOJ, sentenced to ‘time served’ after spending 22 month in jail after his arrest in Dallas in 2009

Richard Bistrong (Armor Holdings Inc.), DOJ, sentenced to 18 months in federal prison followed by 36 months probation

Manuel Caceres (LatiNode), DOJ, was sentenced to 23 months in prison

Hong Rose Carson (Control Components Inc.), DOJ, was sentenced to 6 months home confinement, fined $20,000, and ordered to perform 200 hours of community service

Stuart Carson (Control Components Inc.), DOJ, was sentenced to 4 months in prison and ordered to pay a $20,000 fine, plus 8 months of home detention

Wojciech Chodan (KBR), DOJ, sentenced to one year of unsupervised probation and fined $20,000

Paul Cosgrove (Control Components Inc.), DOJ, sentenced to 13 months home confinement and fined $20,000 for bribing Chinese officials

Jean Rene Duperval (Telecommunications D’Haiti S.A.M.), DOJ, was sentenced to 9 years in prison and ordered to forfeit $497,331 (money laundering only)

David Edmonds (Control Components Inc.), DOJ, was sentenced to 4 months in prison followed by 4 months of home confinement

Mark A. Jackson (Noble), SEC, charged in a civil complaint

Patrick Joseph (Telecommunications D’Haiti S.A.M.), DOJ, sentenced to a year and a day in prison (money laundering only)

Subramanian Krishnan (Digi International, Inc.), SEC, charged in a civil complaint; he consented to a final judgment barring him from serving as a director or officer of an issuer, with a civil penalty and disgorgement to be determined later by stipulation or on motion by the SEC

Thomas F. O’Rourke (Noble), SEC, agreed to pay civil penalty of $35,000

Garth Peterson (Morgan Stanley), DOJ / SEC, sentenced to nine months in federal prison and with SEC agreed to $250,000 in disgorgement and forfeiture of Shanghai real estate worth $3.4 million

James J. Ruehlen (Noble), SEC, charged in a civil complaint

Manual Salvoch (LatiNod), DOJ, was sentenced to 10 months in prison and 3 years of supervised release

Albert ‘Jack’ Stanley (KBR), DOJ, sentenced to 30 months in prison and three years probation, and make a restitution payment of $10.8 million

Jeffrey Tesler (KBR agent), DOJ, sentenced to 21 months in federal prison and ordered to forfeit $149 million. Also fined $25,000 and ordered to serve two years of supervised release after his prison term

Juan Pablo Vasquez (LatiNode), DOJ, received three years probation and a $7,500 fine

Cecilia Zurita (Cinergy Telecommunications), DOJ, charged in the Haiti telco case

Dismissals:

John O’Shea

The Africa sting defendants:

Daniel Alvirez

Helmie Ashiblie

Andrew Bigelow

R. Patrick Caldwell

Yochanan R. Cohen, a/k/a Yochi Cohen

Haim Geri

Stephen Gerard Giordanella

John Gregory Godsey, a/k/a Greg Godsey

Amaro Goncalves

Lee Allen Tolleson

Saul Mishkin

Mark Frederick Morales

Jeana Mushriqui

John M. Mushriqui

David R. Painter

Pankesh Patel

Ofer Paz

Michael Sachs

Jonathan M. Spiller

Lee M. Wares

John Benson Wier III

Israel Weisler, a/k/a Wayne Weisler

Appeal denied:

Frederic Bourke was denied his request to the Second Circuit for a new trial

Appeal dropped:

Lindsey Manufacturing Company, Keith Lindsey, and Steve Lee — The DOJ voluntarily withdrew its appeal to the Ninth Circuit against the trial court’s dismissal of the indictments, ending the prosecution

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For enforcement in prior years, please see:

2011 FCPA Enforcement Index

2010 FCPA Enforcement Index

2009 FCPA Enforcement Index

2008 FCPA Enforcement Index