Last month Rolls-Royce agreed in a deferred prosecution agreement with the DOJ to pay a fine of nearly $170 million for FCPA violations. What makes the Rolls-Royce DPA unique is that $30 million of the fine went to the Consumer Financial Fraud Fund (CFFF).
Typically the entire amount of an FCPA criminal fine goes to the U.S. Treasury per the Miscellaneous Receipts Act, 31 USC § 3302(b), and the Crime Victims Fund, 42 USC § 10601.
According to the DOJ Press Office, which responded to questions from the FCPA Professor, the CFFF is administered by the U.S. Postal Inspection Service and is used to pay costs related to preventing and investigating consumer fraud. The DOJ Press Office also explained that in the last ten years, seven Fraud Section cases have resulted in fines being paid to the CFFF. However, it noted that the Rolls-Royce DPA was the first time an FCPA Unit case resulted in the fine being paid to the CFFF.
There was no discussion in the Rolls-Royce DOJ press release why this $30 million payment to the CFFF occurred or the legal basis for the payment. Will the money paid to the CFFF be used to fund anti-corruption programs in overseas locations, or will this money only be used for consumer fraud in the United States? I could not find the answer to these questions on the U.S. Postal Inspection Service website.
No other FCPA case resolution since the Rolls-Royce DPA has had similar results, so it will be interesting to see if this atypical fine payment is a “one-off” or is something that the DOJ (with the express agreement of a future settling company) is willing to consider in future FCPA settlements.
Scott C. Jansen is an evening LLM student at Georgetown Law Center. He is focusing his studies on national security law, white collar crime, and anti-corruption law. During the day, he is an active duty Air Force Judge Advocate. The views expressed in this post are his alone and do not represent those of the U.S. Government, the Department of Defense, or the Air Force. He can be contacted here.
This gets a bit tricky, when an enforcement agency starts allocating funds for policy purposes. Normally allocation of funds is the function of the legislature. We need to remember that the power to do good (as we see it) also includes the power to engage in mischief, and allocation of funds is certainly a form of power. This development is somewhat troublesome, and especially without full transparency. Cheers, Joe
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