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Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Bill Steinman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

FCPA enforcement report for Q1 2016

During the first calendar quarter, there were eight corporate FCPA enforcement actions and three individual resolutions.

VimpelCom’s $397.6 million settlement in February landed on our list of the Top Ten FCPA cases of all time.

The eight settling companies paid a total of $497.6 million for the resolutions.

For comparison, in Q1 2015 there were two corporate FCPA enforcement actions and one individual resolution. And in Q1 2014 there were two corporate enforcement actions and two individual actions.

In all of 2015 there were eleven corporate resolutions with total payments to the DOJ and SEC of $133 million, and in 2014 there were ten corporate resolutions with payments of $1.56 billion.

Here’s the full report for the first quarter of 2016: 

DOJ / SEC Enforcement Resolutions

PTC Inc. (February 16) paid $28 million to resolve China FCPA offenses. Two China units of the Massachusetts software company entered into a non-prosecution agreement and paid a $14.5 million criminal penalty to resolve a DOJ investigation into payments for recreational travel by Chinese government officials that violated the Foreign Corrupt Practices Act. PTC Inc. also reached a civil settlement with the SEC by disgorging $11.8 million and paying nearly $1.8 million in prejudgment interest.

Yu Kai Yuan (February 17), a former employee at PTC’s China subsidiaries, resolved FCPA offenses through the SEC’s first deferred prosecution agreement with an individual in an FCPA case. The SEC deferred FCPA civil charges for three years “as a result of significant cooperation” Yuan provided during the investigation. Yuan, 47, a Chinese citizen, lives in Shanghai. From 1996 until 2011, he worked as a sales executive at PTC units Parametric Technology (Hong Kong) Ltd. and  Parametric Technology (Shanghai) Software Co., Ltd.

VimpelCom Limited (February 18) and its wholly owned Uzbek subsidiary, Unitel LLC, paid $397.6 million to the DOJ and SEC for bribing a government official in Uzbekistan between 2006 and 2012. VimpelCom paid a $230.1 million criminal penalty to the DOJ and $167.5 million in disgorgement and pre-judgment interest to the SEC. The DOJ charged VimpelCom with conspiracy to violate the antibribery and books and records provisions of the FCPA, with a separate count of violating the FCPA’s internal controls provisions.

Ignacio Cueto Plaza (February 4), the CEO of South America-based LAN Airlines, paid $75,000 to resolve SEC charges that he violated the Foreign Corrupt Practices Act when he authorized more than $1 million in improper payments to a sham consultant during a dispute between the airline and its unionized employees in Argentina. Cueto, 51, is a Chilean citizen.

SciClone Pharmaceuticals (February 4) paid $12.8 million to settle China FCPA offenses brought by the SEC. China employees pumped up sales for five years by making improper payments to professionals employed at state health institutions, the SEC said. They gave money, gifts, travel, golf games, and lavish hospitality to China customers and decision makers.

SAP SE (February 1) paid nearly $3.9 million to settle charges that it violated the Foreign Corrupt Practices Act by paying bribes to win business in Panama. SAP’s faulty internal controls allowed a former vice president of global and strategic accounts, Vicente Garcia, to pay $145,000 in bribes to a senior Panama official and offer bribes to two others in exchange for sales contracts. Garcia, 65, of Miami, was jailed 22 months in December 2015.

Nordion (Canada) Inc. (March 4) paid a $375,000 penalty to settle SEC charges that it lacked internal accounting controls and basic FCPA due diligence. A former employee, Mikhail Gourevitch (see below), bribed Russian government officials.

Mikhail Gourevitch (March 4), a former engineer for Norion, paid $178,950 to settle SEC charges that he violated the FCPA and also took kickbacks. He paid $100,000 in disgorgement, $12,950 in prejudgment interest, and a $66,000 penalty. He arranged bribes to Russian officials through a third-party agent for approval to sell a Nordion liver cancer treatment called TheraSphere. Gourevitch, a dual citizen of Canada and Israel, lived in Canada when he worked for Nordion and now lives in Israel.

Qualcomm Incorporated (March 1) paid $7.5 million to settle SEC charges that it violated the Foreign Corrupt Practices Act by hiring relatives of Chinese government officials. The officials were in positions to decide whether to select Qualcomm’s mobile technology products amid increasing competition in the international telecommunications market, the SEC said.

Olympus Corporation of the Americas (March 1). The company’s Latin America unit paid the DOJ $22.8 million to resolve criminal allegations that it violated the FCPA. Olympus Latin America, Inc. also entered into a three-year deferred prosecution agreement with enhanced compliance obligations. Under a three-year deferred prosecution agreement, a compliance monitor will “assess and monitor” Olympus Corporation of the Americas’s FCPA compliance program.

Novartis AG (March 23) paid $25 million to the SEC to resolve China FCPA offenses. The SEC alleged that two China-based subsidiaries bribed doctors and others to prescribe its drugs. Novartis improperly recorded the payments as travel and entertainment, conferences, lecture fees, marketing events, educational seminars, and medical studies. It agreed to disgorge $21.5 million and pay $1.5 million in prejudgment interest, and a $2 million penalty.

Guilty Pleas

Abraham Jose Shiera Bastidas (March 22), 52, of Coral Gables, Florida, pleaded guilty in federal court to one count of conspiracy to violate the Foreign Corrupt Practices Act and commit wire fraud and one count of violating the FCPA. He bribed officials to win contracts from Venezuela’s state-owned energy company, Petroleos de Venezuela S.A. (PDVSA). Sentencing is scheduled for July 8.

Moises Abraham Millan Escobar (March 22), 32, of Katy, Texas, a one-time employee of Shiera, had his guilty plea  unsealed. He entered the plea in January. He pleaded guilty to one count of conspiracy to violate the FCPA for bribing PDVSA officials.

DPA Extended

Zimmer Biomet Holdings Inc. (March 26) said a three-year deferred prosecution agreement Biomet entered into with the DOJ in March 2012 and already extended for a year won’t end on March 26 as scheduled. The DOJ and SEC are still investigating possible FCPA violations in Brazil and Mexico. In March 2012, Biomet paid $22.7 million to settle FCPA-related offenses. Zimmer bought Indiana-based Biomet last year for about $14 billion.

Related Non-FCPA Actions

Maria de los Angeles Gonzalez de Hernandez (January 18), 57, a former vice president at Venezuela state-owned Banco de Desarrollo Economico y Social de Venezuela (Bandes), was sentenced to time served for taking at least $5 million in bribes from Direct Access Partners, a Wall Street broker-dealer, in exchange for trading business. She had served 16-1/2 months in jail after her arrest in Miami in 2013. She pleaded guilty in late 2013 to conspiracy to violate the Travel Act and commit money laundering, and two substantive counts of the offenses. She was also ordered to forfeit $5 million. Five officers and employees from Direct Access Partners pleaded guilty and were sentenced to prison for bribing Gonzalez.

Jose Luis Ramos Castillo, 38, Christian Javier Maldonado Barillas, 39, and Alfonzo Eliezer Gravina Munoz, 53 (March 22), all from Katy, Texas, were former employees of Petroleos de Venezuela S.A. (PDVSA). Their guilty pleas entered in December 2015 were unsealed. They pleaded guilty to conspiracy to commit money laundering. When they worked for PDVSA, they took bribes from Abraham Jose Shiera Bastidas (see above) in exchange for help winning contracts. Gravina also pleaded guilty to making false statements on his 2010 U.S. federal income tax return.

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Our prior full-year enforcement reports are here:

2015 FCPA Enforcement Index

2014 FCPA Enforcement Index

2013 FCPA Enforcement Index

2012 FCPA Enforcement Index

2011 FCPA Enforcement Index

2010 FCPA Enforcement Index

2009 FCPA Enforcement Index

2008 FCPA Enforcement Index


Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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