During the second calendar quarter, the DOJ reduced Odebrecht’s criminal penalties for FCPA violations, and a former Och-Ziff middleman was sentenced to prison.
The SEC resolved civil actions with two individuals.
Five companies reported declinations, including two declinations with disgorgement under the FCPA Pilot Program.
Here’s what happened:
DOJ / SEC Enforcement Resolutions
Odebrecht (April 14) — The DOJ said in a Sentencing Memorandum the U.S. share of Odebrecht’s “global” criminal penalty for its December 2016 FCPA resolution will be $93 million. In its original announcement on December 21, the DOJ said Odebrecht would pay at least $260 million for criminal penalties.
Elek Straub (April 24), a Hungarian citizen and former CEO of Magyar Telekom, paid the SEC a $250,000 penalty to settle FCPA offenses. He was also barred for five years from serving as an officer or director of any SEC-registered public company.
Andras Balogh (April 24), a Hungarian citizen and former chief strategy officer of Magyar Telekom, paid the SEC a $150,000 penalty to settle FCPA offense. He was also barred for five years from serving as an officer or director of any SEC-registered public company.
Samuel Mebiame (June 1), 43, a consultant to a mining company owned by an Och-Ziff joint venture, was sentenced to two years in prison for conspiring to violate the Foreign Corrupt Practices Act by bribing government officials in Africa. Mebliame is the son of a former Prime Minister of Gabon. He worked for the Och-Ziff joint venture from 2007 to 2012.
Newmont Mining (April 24) said in a securities filing it received a declination letter from the SEC “in late February 2017.” A year ago Newmont said it was investigating some business activities in countries outside the United States. The investigation included a review of compliance with the requirements of the Foreign Corrupt Practices Act and involved the company and its affiliates and contractors. The disclosure in April didn’t mention the DOJ and that agency’s investigation.
Harris Corporation (May 4) said in a securities filing it received a declination from the DOJ “during the second quarter of fiscal 2017.” Harris said it received an SEC declination in September 2016. The agencies’ investigated improperly recorded travel and other expenses in connection with Harris subsidiary Carefx China operations. Harris said it learned through an internal investigation that certain employees of the Carefx China provided pre-paid gift cards and other gifts and payments to certain customers, potential customers, consultants, and government regulators. (Disclosures via FCPA Tracker)
Platform Specialty Products (May 9) said it received declinations from the DOJ and SEC. The company discovered at a business acquired in 2015, Arysta, that “certain payments made to third-party agents in connection with Arysta’s government tender business in West Africa might have been illegal or otherwise inappropriate.” PSP conducted an investigation and voluntarily informed the SEC and DOJ. Following the dual declinations, the company said it “considers the matter closed.” (Disclosures via FCPA Tracker)
Linde Group (June 20) received a declination with disgorgement from the DOJ for FCPA offenses in the Republic of Georgia. Under the declination pursuant to the FCPA Pilot Program, Linde North America Inc. and Linde Gas North America LLC paid the DOJ about $11.2 million. Linde Group trades on German stock exchanges. Neither it nor the U.S. units have securities registered with the SEC.
CDM Smith Inc. (June 29) paid $4 million for a declination with disgorgement with the Justice Department to resolve FCPA offenses in India. The Boston-based company paid $1.18 million in bribes to government officials in exchange for highway construction supervision and design contracts and a water project contract. Privately held CDM Smith received the declination with disgorgement under the FCPA Pilot Program.
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The FCPA enforcement report for Q1 2017 is here.
Here are prior full-year enforcement reports:
Richard L. Cassin is the publisher and editor of the FCPA Blog.