It’s not often anyone from the DOJ’s criminal division talks informally and on the record about FCPA enforcement actions. But Wednesday in New York City, the guy who’s second in command, Marshall Miller, had plenty to say. He was speaking at the Global Investigation Review Program.
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Here’s part of what he said,
[I]n today’s Criminal Division, we are vigorously employing proactive investigative tools that may not have been used frequently enough in white collar cases in past years: tools like wiretaps, body wires, physical surveillance, and border searches, to name just a few.
In one recent fraud investigation, Frederic Cilins, a French citizen, was captured on tape directing a witness to “destroy everything, everything, everything,” and saying that “we need to urgently, urgently, urgently destroy all of this.” Unbeknownst to Mr. Cilins, his trusted cohort was actually a witness working for the FBI, and his obstructive instructions were captured on tape. Faced with that damning evidence, Cilins recently pleaded guilty to obstruction of justice.
Similarly, in another recent Foreign Corrupt Practices Act (FCPA) investigation, a group of executives at BizJet International, a U.S.-based subsidiary of the Lufthansa corporation, engaged in a scheme to funnel bribes to Mexican and Panamanian officials. When one of the conspiring executives began cooperating with the investigation, he wore a body wire and recorded the scheme’s participants as they plotted. The result: four executives and BizJet have now been charged with FCPA crimes; three of them – including the chief executive officer (CEO) and president – have pled guilty; and Bizjet entered into an eight-figure deferred prosecution agreement, admitted the full scope of its criminal conduct, replaced its leadership team, and overhauled its compliance programs.
Such proactive investigative tools — previously used primarily in organized crime and drug cases — have become a staple in our white collar investigations. I can promise you we will continue to use them.
And when corporations engaged in wrongdoing choose not to cooperate – which, of course, they have every right to do – the Criminal Division will make the cases on our own.
An excellent example is the Marubeni case — an FCPA investigation stemming, in part, from a seven-year scheme to pay bribes to Indonesian officials in exchange for a $118 million power contract. When the Criminal Division learned of that conduct and launched an investigation, Marubeni opted not to cooperate at all. What ensued was an extensive multi-tool investigation involving recordings, interviews, subpoenas, mutual legal assistance treaty requests, the use of cooperating witnesses, and more. Today, four individual executives of Marubeni’s consortium partner have been charged with FCPA crimes; three of the executives have pleaded guilty to those crimes; and Marubeni itself was charged and pled guilty to violating the FCPA. And the investigation continues to grow.
Marubeni decided to roll the dice. I’m guessing they may have had some gambler’s remorse when the dice came to rest.
Other companies have taken a different approach. Earlier this year, we announced charges against the former co-CEOs and general counsel of PetroTiger Ltd. for paying bribes to a Colombian official to secure a $39 million oil services contract. The general counsel and one of the CEOs have pleaded guilty to bribery and fraud charges, and the other former CEO is headed for trial in January. But unlike in the Marubeni case, this conduct was brought to the attention of the department through voluntary disclosure by PetroTiger, which cooperated fully with the department’s investigation. Notably, no charges of any kind were filed against PetroTiger, and no non-prosecution agreement was entered.
This is all to say: we would like corporations to cooperate. We will ensure that there are appropriate incentives for corporations to do so. But if there is no cooperation, we will continue to investigate and prosecute the old-fashioned way. And companies will face the consequences.
Marshall L. Miller’s full remarks on September 17, 2014 to the the Global Investigation Review Program in New York City are here.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.