Stericycle, Inc. agreed Wednesday to pay the DOJ and SEC $80.7 million in penalties and disgorgement to resolve FCPA offenses in Argentina, Brazil, and Mexico.
The Illinois-headquartered medical waste disposal company entered into a three-year deferred prosecution agreement with the Department of Justice, paying a $52.5 million criminal penalty.
The DOJ charged Stericycle with one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of conspiracy to violate the books and records provisions.
In an internal administrative order, the SEC charged Stericycle with violating the FCPA’s anti-bribery, books and records, and internal controls provisions.
As part of the SEC settlement, Stericycle agreed to pay around $28.2 million in disgorgement and prejudgment interest. The SEC didn’t impose a separate penalty.
The SEC said it would credit around $4.2 million of disgorgement paid, and the DOJ said it would credit around $9.3 million, for related payments by Stericycle to resolve investigations by the Controladoria-Geral da União (CGU) and the Advocacia-Geral de União (Attorney General’s Office) in Brazil.
Stericycle offered and paid about $10.5 million in bribes to foreign officials in Brazil, Mexico, and Argentina from 2012 to 2016 to obtain and retain business from government customers, according to prosecutors.
Company staff kept and emailed spreadsheets that identified government customers who received bribes in all three countries. The staff also used code words for the bribes including “CP” or “commission payment” in Brazil, “IP” or “incentive payment” in Mexico, and “alfajores” (a popular sweet cookie) or “IP” in Argentina, the DOJ said.
The DOJ said Stericycle earned at least $21.5 million in profits from the scheme.
According to the DOJ, the bribes, typically paid in cash, were calculated as a percentage of the underlying contract payments owed to Stericycle from government customers.
In Argentina, bribes typically totaled 15 percent of the invoice amount. Company executives authorized the bribes, and the cash was then delivered to a government official at various locations, the SEC said.
Stericycle’s bribery scheme operated in a similar way in Mexico and Brazil.
In a release Wednesday, Stericycle called the bribery investigation a “legacy matter” and said it has since “sold its operations in Argentina and Mexico and currently operates within the Latin American region only in Brazil.”
Cindy J. Miller, president and chief executive officer, said, “Over the past several years, we have focused on fully remediating the issues identified during the investigation.”
As part of the settlement, Stericycle agreed to a two-year compliance monitorship with an additional year of compliance and self-reporting obligations. The company also agreed to continue cooperating with the DOJ in any ongoing or future criminal investigations relating to the misconduct.
Stericycle employs over 23,000 people and has operations in 17 countries, according to its website.
According to FCPA Tracker, Stericycle first disclosed the investigation in an SEC filing in August 2017.