During the second calendar quarter — amid the Covid-19 lockdown — there were two corporate FCPA enforcement actions. For comparison, during the second calendar quarter last year, there were three corporate FCPA enforcement actions, and during Q2 2018, there were five corporate FCPA enforcement actions.
Two individuals were sentenced by videoconference during the second quarter. There were two jury convictions for FCPA offenses, and the DOJ announced charges against one new defendant.
There were three corporate declinations.
Here’s what happened:
DOJ / SEC Enforcement Resolutions
Novartis AG (June 25, 2020) and two subsidiaries (one current and one former) paid the DOJ and SEC $346.7 in penalties and disgorgement to resolve FCPA offenses in Greece, Vietnam, and South Korea. Novartis Hellas S.A.C.I. paid a criminal penalty of $225 million and entered a three-year deferred prosecution agreement with the DOJ. Former Novartis subsidiary Alcon Pte Ltd. separately paid a criminal penalty of $8.9 million and also entered into a DPA. In the SEC enforcement action, Novartis AG disgorged $92.3 million plus prejudgment interest of $20.5 million.
Eni S.p.A (April 17, 2020) paid the SEC $24.5 million to resolve FCPA violations in Algeria, consisting of $19.75 million in disgorgement plus prejudgment interest of $4.75 million. The SEC charged Eni with violating the FCPA’s books and records and internal accounting controls provisions. An Eni subsidiary, Saipem, paid $215 million to the intermediary and was awarded at least seven contracts from Sonatrach, Algeria’s state energy company. Some of the money was transferred through offshore shell companies to Algerian officials, including the energy minister.
Eberhard Reichert ((April 17, 2020), 80, a German national and former Siemens executive, was sentenced to time served for bribing officials in Argentina. He was arrested in 2017 in Croatia and spent about three months in custody there. He agreed to be extradited to the United States and in 2018 pleaded in federal court in Manhattan to one count of conspiring to violate the FCPA anti-bribery, internal controls and books and records provisions, and to commit wire fraud. He was sentenced by Judge Denise Cote of the federal court in New York via video conference, while he was home in Germany. He was charged in 2011 with FCPA offenses for bribing Argentine government officials in exchange for a $1 billion contract to create national identity cards.
Larry Puckett (April 13, 2020), a former Alstom sales manager in the United States was sentenced to two years of supervised release. Judge Janet Bond Arterton sentenced him via videoconference and also ordered him to pay a $5,000 fine and perform 100 hours of community service. Puckett began cooperating with the DOJ in August 2012 and in 2013 signed a formal proffer agreement. He entered a final plea in June 2019 when he appeared before the federal court in Connecticut, where the Alstom U.S. unit is based.
Asante Berko (April 13, 2020), 46, a dual U.S. and Ghanian citizen and resident of Ghana, was charged by the SEC in a civil complaint filed in federal court in New York with violating and aiding and abetting violations of the FCPA anti-bribery provisions. He’s a former Goldman Sachs executive. The SEC said he allegedly helped a Turkish energy company win a power plant contract in Ghana by arranging and paying bribes through an intermediary. He left Goldman Sach in 2016. The bank discovered the alleged bribery and wasn’t charged.
Roger Richard Boncy (June 20), 74, a dual U.S. and Haitian citizen who lives in Madrid, Spain, was found guilty by a federal jury in Boston after a two-week trial for a scheme to bribe Haitian officials to secure approval for an $84 million construction project. Boncy was convicted of one count of conspiracy to violate the FCPA and one count of conspiracy to violate the Travel Act. Sentencing is set for September 12.
Joseph Baptiste (June 20), 66, of Fulton, Maryland, Boncy’s co-defendant, was also convicted of one count of conspiracy to violate the FCPA and one count of conspiracy to violate the Travel Act, as well as one count of violating the Travel Act and one count of conspiracy to commit money laundering. Sentencing is set for September 12.
USANA Health Sciences, Inc. (June 29, 2020) said in an SEC filing that on June 24, 2020, the SEC informed the company that it had closed its investigation and declined any enforcement action. On June 26, 2020, the DOJ informed Usana by letter that it had also closed its investigation. Usana first disclosed the investigation into its BabyCare operations in China in early 2017.*
Alexion Pharmaceuticals, Inc. (May 6, 2020) said in a Form 10-Q: “In May 2015, we received a subpoena in connection with an investigation by the Enforcement Division of the SEC requesting information related to our grant-making activities and compliance with the FCPA in various countries, including Brazil, Colombia, Japan, Russia and Turkey. In addition, in October 2015, we received a request from the DOJ for the voluntary production of documents and other information pertaining to our compliance with the FCPA. The SEC and DOJ also sought information related to our recalls of specific lots of SOLIRIS and related securities disclosures. Alexion has been cooperating with these investigations, and DOJ recently informed us that it has closed its inquiry into these matters.”
CHS Inc. (April 8, 2020) said in connection with an FCPA investigation into payments made to Mexican customs officials: “On February 25, 2020, we received a letter from the DOJ stating that it had closed its inquiry into each of these matters without taking any action against us and acknowledging its appreciation of our cooperation. We are still fully cooperating with the SEC’s ongoing evaluation of these FCPA-related matters.” *
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All corporate FCPA enforcement actions are available on the FCPA Blog’s Complete FCPA Enforcement Index.