Editors

Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
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

Shruti J. Shah
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

Bill Steinman
Contributing Editor

FCPA enforcement report for Q3 2019

During the third calendar quarter there were seven corporate FCPA enforcement actions with penalties and disgorgement totaling about $78.5 million.

For comparison, in Q3 2018 there were also seven corporate FCPA enforcement actions. Total penalties and disgorgement were about $1.97 billion, including $1.78 billion for Petrobras.

In Q3 2017, there were three corporate FCPA enforcement actions. The companies paid about $1 billion for the settlements. Telia’s share was $965 million.

This year in Q3 two individuals reached civil settlements with the SEC.

Two others were indicted, one was sentenced to prison, and another pleaded guilty and is waiting to be sentenced.

There were three new corporate declinations.

Here’s what happened:

DOJ / SEC Enforcement Resolutions

Westport Fuel Systems, Inc. (September 27) of Vancouver, Canada paid about $4.1 million to resolve FCPA charges brought by the SEC. The company disgorged $2.35 million and payed prejudgment interest of $196,000, plus a civil penalties of $1.5 million. The clean fuel technology company bribed a government official in China. The company settled without admitting or denying the SEC’s findings.

Nancy Gougarty (September 27) of Leesville, South Carolina, the former CEO of Westport Fuels, agreed to pay the SEC a civil penalty of $120,000 to resolve FCPA offenses. The SEC said Gougarty caused Westport’s FCPA violations by circumventing its internal accounting controls and falsely certificating the sufficiency of those controls. She resolved the charges without admitting or denying the SEC’s findings.

Barclays PLC (September 27) paid the SEC $6.3 million to settle FCPA offenses for hiring relatives of public officials in Asia. The British bank disgorged $3.8 million and paid a $1.5 million penalty to the SEC, plus pre-judgment interest of $984,000. In an internal administrative order, the SEC charged Barclays with violating the FCPA’s books and records and internal accounting controls provisions.

Quad/Graphics Inc. (September 26) agreed to pay the SEC nearly $10 million to settle violations of the Foreign Corrupt Practices Act for long-running bribery schemes and cover-ups in Peru and China.
The Sussex, Wisconsin print and digital marketing company disgorged $6.9 million and paid prejudgment interest of about $960,000, plus a civil penalty of $2 million. The SEC resolved the enforcement action through an internal administrative order (pdf) and didn’t go to court.

TechnipFMC plc (September 23) paid the SEC $5 million to settle FCPA offenses related to bribing Iraqi officials to win business with state-owned oil companies. The London-headquartered oil and gas company disgorged $4.3 million to the SEC, plus prejudgment interest of $735,000.

Sridhar Thiruvengadam (September 13), 55, the former chief operating officer of New Jersey-based Cognizant Technology Solutions Corporation, settled SEC charges that he violated the FCPA’s internal accounting controls and recordkeeping provisions by helping bribe an Indian government official and concealing the bribe. The Indian national paid a penalty of $50,000 and agreed to cooperate with the SEC.

Juniper Networks (August 29) paid the SEC $11.7 million to settle FCPA offenses related to its sales practices in Russia and China. The company disgorged $4 million and paid a $6.5 million penalty to the SEC, plus prejudgment interest of $1.3 million. Juniper first disclosed the FCPA-related investigation in an SEC filing in August 2013.

Deutsche Bank August 22) paid the SEC $16 million to settle FCPA offenses for hiring relatives of public officials in China and Russia. The German bank disgorged $10.7 million and paid a $3 million penalty to the SEC, plus prejudgment interest of $2.4 million.

Microsoft Corporation (July 22) and an overseas subsidiary paid the DOJ and SEC $25.3 million Monday to settle FCPA offenses related to its operations in Hungary, Saudi Arabia, Thailand, and Turkey. A subsidiary in Hungary called Microsoft Magyarorszag Kft. paid a criminal penalty of $8.75 million and entered into a three-year non-prosecution agreement with the DOJ. Microsoft Corporation also disgorged $13.78 million to the SEC, plus prejudgment interest of $2.78 million.

Sentenced

Luis Alberto Chacin Haddad (September 25), 54, was sentenced to 51 months in federal prison for bribing officials at Venezuela’s national electricity company in exchange for $60 million in contracts for his Florida-based companies. Chacin pleaded guilty in federal court in Miami on June 24 to one count of conspiracy to violate the Foreign Corrupt Practices Act. As part of his plea deal, he agreed to forfeit at least $5.5 million in profits he made from the corrupt contracts, as well as real estate in the Miami area.

Indicted

Armengol Alfonso Cevallos Diaz (reported July 1), an Ecuador citizen living in Florida, was charged in an 11-count indictment that was filed May 9 (without an announcement from the DOJ) in federal court in Miami. He was charged with conspiracy to violate the FCPA, conspiracy to commit money laundering, and nine counts of money laundering. He allegedly helped pay and launder more than $4 million in bribes to officials at Empresa Pública de Hidrocarburos del Ecuador or PetroEcuador.

Jose Melquiades Cisneros Alarcon (reported July 1), Diaz’s co-defendant, also an Ecuador citizen living in Florida, was charged in the same 11-count indictment filed May 9.

Guilty Plea

Robin Longoria (August 29), 58, of Mansfield, Texas, pleaded guilty in federal court in Ohio to one count of conspiracy to violate the Foreign Corrupt Practices Act and to commit wire and visa fraud. She bribed Ugandan officials while managing aspects of an international program at an Ohio-based adoption agency. She also defrauded U.S. adoptive parents and the U.S. Department of State. No date for sentencing has been set.

Declinations

Quad/Graphics, Inc. (September 19) received a declination from the DOJ puruant to the FCPA Corporate Enforcement Policy. The DOJ said in its declination letter, “We have reached this conclusion despite the bribery committed by employees of the Company’s subsidiaries in Peru and China.” See the SEC enforcement action for Quad/Graphics above.

Ciena Corporation (September 11) said in a securities filing that on September 9, 2019, the SEC advised that it has concluded its FCPA investigation and “that its staff does not intend to recommend any enforcement action by the SEC against Ciena.” The investigation, first disclosed in 2017, involved one of Ciena’s third-party vendors and “allegations about certain questionable payments to one or more individuals employed by a customer in a country in the ASEAN region.” On December 10, 2018, the DOJ advised that it declined to prosecute the matter and that its investigation was closed.*

Misonix, Inc. (August 16) said it received a declination on August 14, 2019 dated August 13 stating that “the DOJ has closed its inquiry into Misonix without any action against Misonix with respect to the matters described below.” Misonix had received a letter from the SEC on June 18, 2019 stating that the SEC had concluded its FCPA investigation and that it did not intend to recommend an enforcement action against the company.*

* Company disclosures courtesy of FCPA Tracker.

*     *    *

Our FCPA enforcement report for Q2 2019 is here and for Q1 2019 is here.

Prior full-year enforcement reports are here:

2018 FCPA Enforcement Index

2017 FCPA Enforcement Index

2016 FCPA Enforcement Index

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

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Richard L. Cassin is editor at large of the FCPA Blog.

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