Corruption Crime & Compliance

The Justice Department and regulatory agencies have emphasized the importance of corporate culture and the importance of ethics.  As companies approach this important issue, it is important to examine a variety of strategies to ensure that a corporate culture adheres to ethical standards. Jeffrey Tilton, CFE, a leader in the compliance field, has an interesting perspective on this issue.  In this Episode, Michael Volkov discusses the issue of culture and ethics.

Beam Suntory, a global producer and distributor of distilled beverages, settled its FCPA case with DOJ for $19.5 million for bribes paid in India. The DOJ settlement follows an SEC FCPA settlement for $8 million announced on July 2, 2018.  The timing of the FCPA settlements is unusual and suggests that DOJ’s resolution involved unique issues relating to Beam Suntory’s cooperation. In this Episode, Michael Volkov reviews the FCPA settlement.

The Department of Justice and eleven state Attorneys General filed an antitrust case against Google in the United States Court for the District of Columbia.  DOJ’s filing was hurried at the behest of the Attorney General Bill Barr, and reflects DOJ’s growing focus on high-tech businesses and monopolization conduct.  DOJ’s case joins a long list of high-profile monopolization cases, including Microsoft, AT&T and IBM.  DOJ’s filing represents the most significant antitrust enforcement action against big technology companies since DOJ’s 1998 filing against Microsoft. In this Episode, Mike Volkov reviews DOJ's case and provides relevant analysis.

Medical device maker Merit Medical Systems (“MMS”) agreed to pay $18 million to resolve allegations that the company submitted false claims to Medicare, Medicaid and TRICARE by paying kickbacks to physicians and hospitals to induce increased use of MMS products. In this Episode, Michael Volkov discusses the MMS False Claims Act settlement.

J&F Investimentos SA (“J&F), a Brazilian private investment company, plead guilty to FCPA bribery violations in federal court in Brooklyn, New York.  As part of the plea agreement, J&F agreed to pay a fine of $256 million and to cooperate with ongoing investigations of other companies and individuals involved in the bribery schemes. J& F owns numerous companies around the globe, including in the meat and agricultural industries. Under the plea agreement. J&F will pay only half of the fine, or $128.2 million, in recognition of large fine paid by J&F as part of its resolution with Brazilian prosecutors. In March 2017, J&F reached an agreement with Brazilian prosecutors to pay $3.2 billion for bribes paid by senior executives to Brazilian government officials and politicians. In a related action with the Securities and Exchange Commission, J&F, its subsidiary, JBS, the largest meat producer in the world, and J&F’s two principal owners Joesley and Wesley Batista, agreed to pay $27 million in disgorgement and the Batista brothers each agreed to pay $550,000, to resolve SEC charges. In this Episode, Michael Volkov reviews the J&F settlement for FCPA violations with the Justice Department and the SEC.

The Justice Department finally closed out its investigation of Goldman Sachs’ massive bribery scheme involving Malaysia’s 1MDB fund.  The case is now the largest in US FCPA history (based on its payment to DOJ and related US agencies). Goldman Sachs entered into  three-year deferred prosecution agreement (“DPA”) with the filing of a criminal information charging conspiracy to violate the anti-bribery provisions of the FCPA.  At the same time, Goldman Sach’s Mayalaysia subsidiary plead guilty to conspiracy to violate the FCPA. Under the terms of settlement, Goldman will pay a criminal penalty and disgorgement of just over $2.9 billion.  Goldman reached parallel resolutions with foreign enforcement agencies in the United Kingdom, Singapore, Malaysia and Hong Kong, along with domestic agencies, including the Securities and Exchange Commission ($606 million in disgorgement and penalty of $400 million), the Board of Governors of the Federal Reserve System ($154 million), the New York State Department of Financial Services ($150 million).  DOJ will credit approximately $1.6 billion in payments with respect to these parallel resolutions. In this Episode, Michael Volkov reviews the underlying conduct and the settlement terms.

Boeing is the new poster child for corporate governance failures and misconduct.  Move over Wells Fargo, General Motors, Volkswagen, Novartis, Siemens and Wal-Mart, and make room for Boeing.  Like General Motors and its ignition switch scandal, innocent consumers were killed as a direct result of corporate governance failures and blatant misconduct. In this Episode, Michael Volkov reviews recent events surrounding Boeing's 737 MAX scandal.

OFAC has resumed its aggressive enforcement program.  These enforcement actions include: (1) Keysight Technologies settled with OFAC for $473,157 for violations of the Iran Sanctions Program; (2) Comtech Telecommunications settled with OFAC for $894,111 for violations of Sudan Sanctions Program; and (3) Deutsche Bank settles two OFAC cases totaling $583K for violations of Ukraine-Russia Sanctions Program. In this Episode, Michael Volkov discusses these three separate enforcement actions.

In two recent FCPA enforcement actions, the Justice Department focused on bribery schemes involving Petroecuador government officials.  Petroecuador is the state-owned oil and gas company in Ecuador. In the first, DOJ announced an indictment against Javier Aguilar, an oil trader at Vitol, an energy and commodity trading company, for his role in a five-year international bribery and money laundering scheme carried out in Ecuador. In the second enforcement action, DOJ announced a guilty plea to FCPA charges by Sargeant Marine, Inc., a privately-owned company, based in Boca Raton, Florida. Sargeant Marine, an asphalt company, plead guilty to one count of conspiracy to violate the anti-bribery provisions of the FCPA and agreed to pay a fine of $16.6 million for bribery schemes in Brazil, Venezuela and Ecuador. In this Episode, Michael Volkov discusses these two enforcement actions.

Global companies have to conduct periodic audits of its high-risk third party partners.  With the continuing pandemic, such audits have to be conducted remotely.  As a result, companies face significant challenges in conducting audits in these difficult times. In this Episode, Michael Volkov interviews Jessica Sanderson, Partner at The Volkov Law Group, on how to conduct a remote third party audit.