During the first calendar quarter there were two corporate FCPA enforcement actions, including Airbus — the biggest FCPA resolution of all time.
(Looking back at Q1 enforcement over the past five years, during Q1 2019 there were three corporate FCPA enforcement actions, including MTS’ $850 million settlement. In Q1 2018 there were three corporate FCPA enforcement actions, six in Q1 2017, eight corporate actions in Q1 2016, and two in Q1 2015.)
During the first quarter of this year, two individuals pleaded guilty to FCPA-related offenses. The DOJ announced new indictments against three individuals for Alstom-related FCPA charges. A federal judge acquitted another Alstom defendant, Lawrence Hoskins, of all FCPA charges after a jury had convicted him. Two other FCPA defendants who had also been convicted by a jury of FCPA offenses were granted new trials, after a judge found that one of their lawyers hadn’t provided effective counsel.
Uber disclosed an FCPA declination during the first calendar quarter.
Here’s what happened:
DOJ / SEC Enforcement Resolutions
Cardinal Health (February 28, 2020) paid the SEC $8.8 million to settle FCPA offenses related to a Chinese subsidiary that provided marketing services. In an internal administrative order, the SEC charged Cardinal Health with violating the FCPA’s books and records and internal accounting controls provisions. Dublin, Ohio-based Cardinal Health agreed to disgorged $5.4 million to the SEC, plus prejudgment interest of $916,887, and pay a civil penalty of $2.5 million.
Airbus SE (January 31, 2020) entered into a $4 billion global settlement of bribery-related charges with U.S., French, and UK prosecutors. In the United States, a deferred prosecution agreement with the DOJ imposed a criminal penalty of $2.09 billion — the biggest FCPA enforcement action ever. The DOJ agreed to credit amounts paid to French prosecutor Parquet National Financier (PNF) up to $1.8 billion. Airbus also paid the UK Serious Fraud Office €991 million ($1.09 billion) to settle Bribery Act charges. In the United States, Airbus also paid a further criminal penalty of $232.7 million to settle ITAR-related charges, and forfeited to the DOJ a €50 million ($55 million) bond in a civil forfeiture action for the ITAR-related conduct.
Juan Jose Hernandez Comerma (January 8, 2020), 54, of Weston, Florida, was sentenced to 48 months in prison, fined $127,000, and ordered to forfeit $3 million. He pleaded guilty in early 2017 to one count of conspiracy to violate the Foreign Corrupt Practices Act and one count of violating the FCPA. He was sentenced in Houston. Hernandez, the former general manager and part owner of a Florida-based company, helped bribe officials at Venezuela’s state energy company, Petroleos de Venezuela S.A. (PDVSA) in exchange for contracts.
Reza Moenaf (indictment unsealed February 18, 2020), 63, the former president of Alstom’s subsidiary in Indonesia, was charged with conspiracy to violate the Foreign Corrupt Practices Act and conspiracy to commit money laundering. He was also charged with two counts of violating the FCPA and one count of money laundering.
Eko Sulianto (indictment unsealed February 18, 2020), 63, the former director of sales of Alstom’s subsidiary in Indonesia, was charged with conspiracy to violate the Foreign Corrupt Practices Act and conspiracy to commit money laundering. He was also charged with two counts of violating the FCPA and one count of money laundering.
Junji Kusunoki (indictment unseal February 18, 2020), 57, the former deputy general manager of Marubeni Corporation’s overseas power project department, was charged with conspiracy to violate the Foreign Corrupt Practices Act and conspiracy to commit money laundering. He was also charged with six counts of violating the FCPA and four counts of money laundering.
Tulio Anibal Farias-Perez (February 19, 2020), a Venezuela citizen and Texas resident, pleaded guilty in federal court in Houston to one count of conspiracy to violate the FCPA. He helped arrange bribes to officials at Venezuela’s state energy company, PDVSA, in exchange for contracts. He was charged in a criminal information filed by the DOJ on February 7, 2020.
Armengol Alfonso Cevallos Diaz (January 23, 2020), 57, pleaded guilty in federal court in Miami to one count of conspiracy to violate the Foreign Corrupt Practices Act and one count of conspiracy to commit money laundering. He was part of a $4.4 million bribery and money laundering scheme that funneled bribes to public officials of Empresa Pública de Hidrocarburos del Ecuador (PetroEcuador), the state-owned and state-controlled oil company of Ecuador. Sentencing is scheduled for April 2, 2020.
Lawrence Hoskins (February 26, 2020), 69, a former senior vice president at Paris-based Alstom SA, was acquitted by the trial judge of one FCPA conspiracy count and six substantive FCPA counts, after being found guilty by a jury in November 2019. Judge Janet Bond Arterton said prosecutors had not proved Hoskins had acted as the agent of Alstom’s U.S. subsidiary, and therefore — as a foreign national who was never in the United States — he couldn’t be convicted of violating the Foreign Corrupt Practices Act. Judge Arterton let stand four money laundering-related counts Hoskins was convicted on. The judge granted Hoskins’ motion for a new trial on the seven FCPA-related counts on a “conditional” basis in case prosecutors appeal and the acquittal is “later vacated or reversed.” She sentenced Hoskins on March 6 to 15 months in prison on charges of conspiracy and money laundering and fined him $30,000.
Granted New Trials
Roger Richard Boncy (March 11, 2020), 75, a dual U.S. and Haitian citizen who lives in Madrid, Spain, was granted a new trial following his June 2019 jury conviction on FCPA and Travel Act conspiracy charges. The judge ruled that his co-defendant’s ineffective counsel had prejudiced Boncy right to a fair trial. The DOJ accused Boncy of soliciting bribes from undercover agents posing as potential investors in a proposed port development project in the Mȏle St. Nicolas area of Haiti.
Joseph Baptiste (March 11, 2020), 67, of Fulton, Maryland, Boncy’s co-defendant, was granted a new trial following his June 2019 jury conviction on FCPA and Travel Act conspiracy charges, a substantive Travel Act count, and one count of conspiracy to commit money laundering. The trial judge ruled that Baptiste was not adequately represented by lawyer Donald LaRouche because LaRoche’s “overall performance” did not live up to “prevailing professional norms.
Uber Technologies, Inc. (January 6 , 2020) said in an SEC filing that it received notice that the DOJ closed its investigation into possible FCPA violations in Indonesia, Malaysia, China, and India, among other countries, and “will not be pursuing enforcement action.”* Uber had first disclosed the FCPA investigation in April 2019.
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Prior full-year enforcement reports are here: