Enforcement Report for Q3 ‘13

DOJ and SEC enforcement of the FCPA slowed a bit during the summer months. But after a blockbuster Q2, the third quarter still saw four guilty pleas, one more than the prior quarter, and three declinations, up from two in the previous three months.

There were a couple of final resolutions, both involving older cases, and one new indictment.

Here’s what happened:

DOJ / SEC Enforcement Resolutions

Subramanian Krishnan (July 2) the former CFO of Digi International, Inc., agreed to settle civil charges that he evaded internal controls to pay for unauthorized travel and entertainment expenses. He was first charged in September 2012 in federal court in Minnesota with multiple offenses under the books and records and internal controls provisions of the FCPA.

IBM (July 24) received final court approval for its 2011 settlement with the SEC of civil FCPA charges. U.S. District Judge Richard Leon granted final approval for the $10 million settlement he first rejected in March 2011. The new settlement terms included enhanced reporting by IBM to the court about its compliance program and any potential FCPA violations.

 Indicted

Lawrence Hoskins (July 30), formerly Alstom’s senior vice president for the Asia region, was charged in federal court in Connecticut with conspiring to violate the FCPA and to launder money, as well as substantive FCPA and money laundering offenses.

Guilty Pleas

Frederic Pierucci (July 29), an Alstom executive, pleaded guilty to an FCPA conspiracy and to a substantive FCPA offense. Charges against Pierucci, a French citizen who headed global sales for Paris-based Alstom, were unsealed in April. He became the second company executive to plead guilty.

Tomas Alberto Clarke Bethancourt (also known as Tomas Clarke) (August 29), a former senior vice president of Direct Access Partners, pleaded guilty in federal court in New York City to conspiracy, money laundering, and violating the Foreign Corrupt Practices Act.

Ernesto Lujan (August 29) a former managing partner of Direct Access Partners, pleaded guilty to bribing an official of a state-owned Venezuelan bank in exchange for bond trading business.

Jose Alejandro Hurtado (August 30), a broker from Direct Access Partners, pleaded guilty to six counts of conspiring to violate the Foreign Corrupt Practices Act, to violate the Travel Act, and to commit money laundering, as well as substantive counts of the offenses.

Appeal Dismissed

Gerald and Patricia Green (July 11) lost an appeal of part of their FCPA-related sentence when a three-judge panel denied their request for relief from a $250,000 restitution order. The Greens were convicted in a jury trial in Los Angeles of FCPA and related violations in 2009. The charges against them arose out of bribes they paid to land contracts for the Bangkok film festival.

Declinations (disclosed investigations by the DOJ or SEC or both followed by either or both agencies declining to bring an enforcement action)

Wynn Resorts (July 2) received a letter from the SEC stating that the investigation into a donation by affiliate Wynn Macau Limited to the University of Macau Development Foundation had been completed with the SEC not intending to recommend any enforcement action.

Owens-Illinois Group Inc. (July 15) received word from the DOJ that the agency doesn’t intend to pursue criminal enforcement and is ‘closing its inquiry into the matter.’ In its quarterly filing, the Ohio-based company said it can’t predict if the SEC will take action or what civil sanctions it might impose.

Allied Defense Group (August 15), a munitions maker implicated in the failed Africa sting prosecution, received a declination from the DOJ. That allowed the company to complete its stalled dissolution and distribute to shareholders $43 million in cash. 

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Our Enforcement Report for for Q2 ’13 here and for Q1 ’13 is here.

Our 2012 Enforcement Index is here.

The 2011 Enforcement Index is here, the 2010 Index is here, the 2009 Index can be found here, and our 2008 Index is here.