Archive

December 22, 2016

Teva Pharmaceutical Industries Ltd., the world’s largest manufacturer of generic pharmaceutical products, and its wholly-owned Russian subsidiary Teva LLC (Teva Russia) agreed to pay a criminal penalty of more than $283 million in connection with schemes involving the bribery of government officials in Russia, Ukraine and Mexico in violation of the Foreign Corrupt Practices Act.  According to the companies’ admissions, Teva executives and Teva Russia employees paid bribes to a high-ranking Russian government official intending to influence the official to use his authority to increase sales of Teva’s multiple sclerosis drug, Copaxone, in annual drug purchase auctions held by the Russian Ministry of Health.  Teva also admitted to paying bribes to a senior government official within the Ukrainian Ministry of Health to influence the Ukrainian government’s approval of Teva drug registrations, which were necessary for the company to market and sell its products in the country.  In related SEC proceedings, Teva agreed to pay an additional $236 million in disgorgement for a total payout of roughly $520 million in criminal and regulatory penalties.  DOJ

December 21, 2016

Odebrecht S.A., a global construction conglomerate based in Brazil, and Braskem S.A., a Brazilian petrochemical company, pleaded guilty and agreed to pay a combined total penalty of at least $3.5 billion to resolve charges with authorities in the United States, Brazil and Switzerland arising out of their schemes to pay hundreds of millions of dollars in bribes to government officials around the world in violation of the anti-bribery provisions of the Foreign Corrupt Practices Act.  It is the largest foreign bribery case in history.  DOJ

November 15, 2016

JPMorgan Chase and its Hong Kong-based subsidiary JPMorgan Securities (Asia Pacific) Limited agreed to pay a combined total of roughly $265 million to resolve foreign bribery charges relating to JPMorgan’s so-called Sons and Daughters Program.  This was a scheme in which the bank secured large business deals in China by awarding prestigious jobs to relatives and friends of Chinese government officials.  As part of the settlement, JPMorgan agreed to pay the DOJ a criminal penalty of $72 million.  JPMorgan also agreed to pay the SEC roughly $130 million to settle charges that the bank’s conduct violated the Foreign Corrupt Practices Act.  The Federal Reserve System’s Board of Governors also assessed a $61.9 million civil penalty.  Whistleblower Insider

October 24, 2016

Brazilian aircraft manufacturer Embraer S.A. will pay more than $205 million to the SEC, DOJ, and Brazilian authorities to resolve alleged violations of the Foreign Corrupt Practices Act (FCPA).  The SEC’s complaint alleges that Embraer made more than $83 million in profits as a result of bribe payments from its U.S.-based subsidiary through third-party agents to foreign government officials in the Dominican Republic, Saudi Arabia, and Mozambique to secure business in those countries.  Embraer also engaged in an alleged accounting scheme in India, in which $5.76 million was paid to an agent in India in connection with the sale of three highly-specialized military aircraft for India’s air force and the payments were falsely recorded in Embraer’s books and records as part of a consulting agreement that was not legitimate.  SEC

September 29, 2016

New York-based alternative investment and hedge fund manager, Och-Ziff Capital Management Group LLC, and its wholly-owned subsidiary OZ Africa Management GP LLC, agreed to pay a criminal penalty of more than $213 million to settle charges of violating the False Claims Act in connection with a widespread scheme involving the bribery of officials in the Democratic Republic of Congo and Libya.  According to the government, it is the first time a hedge fund has been held to account for violations of the FCPA.  DOJ

September 29, 2016

Och-Ziff Capital Management Group will pay nearly $200 million to settle civil charges of violating the Foreign Corrupt Practices Act (FCPA).  Och-Ziff CEO  Daniel S. Och and Och-Ziff CFO Joel M. Frank will pay nearly $2.2 million to settle charges that they caused certain violations.  The SEC detected the misconduct while proactively scrutinizing the way that financial services firms were obtaining investments from sovereign wealth funds overseas.  The SEC’s subsequent investigation of Och-Ziff found that the fund used intermediaries, agents, and business partners to pay bribes to high-level government officials in Africa.  According to the SEC’s order, the illicit payments induced the Libyan Investment Authority sovereign wealth fund to invest in Och-Ziff managed funds.  Other bribes were paid to secure mining rights and corruptly influence government officials in Libya, Chad, Nigeria, Guinea, and the Democratic Republic of the Congo.  As part of its settlement agreement with the SEC, Och-Ziff acknowledged that it expected to enter into a deferred prosecution agreement with the Justice Department in a parallel criminal proceeding and its subsidiary OZ Africa Management GP LLC agreed to enter into a plea agreement.  Och-Ziff is expected to pay a criminal penalty of $213 million.  SEC

September 28, 2016

Anheuser-Busch InBev will pay $6 million to settle charges that it violated the Foreign Corrupt Practices Act (FCPA) and chilled a whistleblower who reported the misconduct.  An investigation found that the company used third-party sales promoters to make improper payments to government officials in India to increase the sales and production of Anheuser-Busch products in the country.  The SEC’s order further found that Anheuser-Busch improperly chilled whistleblower activity by entering into a separation agreement that stopped an employee from continuing to voluntarily communicate with the SEC about potential FCPA violations by imposing substantial financial penalties for violating strict non-disclosure terms.  SEC

July 25, 2016

Chile-based commercial airline LATAM Airlines Group S.A. (TAM) agreed to pay a $12.75 million criminal penalty in connection with a scheme to pay bribes to Argentine union officials via a false consulting contract with a third-party intermediary in violation of the accounting provisions of the Foreign Corrupt Practices Act (FCPA).  According to the company's admissions, executives at LATAM’s predecessor-in-interest, LAN Airlines S.A. (LAN), executed a fictitious $1.15 million consulting agreement with an advisor to the Secretary of Argentina’s Ministry of Transportation.  Although the agreement purportedly required the consultant to undertake a study of Argentine airline routes, the consultant never provided any such services and instead funneled the monies to Argentine labor union officials in exchange for the union agreeing to accept lower wages and not enforce what would have been a costly labor rule.  DOJ

June 21, 2016

Massachusetts-based medical device manufacturer Analogic Corp. and its wholly-owned Danish subsidiary, BK Medical ApS, will pay nearly $15 million to settle parallel civil and criminal actions involving Foreign Corrupt Practices Act violations.  An SEC investigation found that BK Medical engaged in hundreds of sham transactions with distributors that funneled about $20 million to third parties, including individuals in Russia and apparent shell companies in Belize, the British Virgin Islands, Cyprus, and Seychelles.  According to the SEC’s order, from at least 2001 through 2011, at the direction of its distributors, BK Medical participated in hundreds of highly suspicious transactions that posed a significant risk of bribery or other improper conduct, such as embezzlement or tax evasion.  SEC

June 7, 2016

Rhode Island-based residential and commercial building products manufacturer Nortek, Inc. will pay more than $300,000 pursuant to a non-prosecution agreement with the SEC.  Nortek self-reported violations of the Foreign Corrupt Practices Act after finding that a foreign subsidiary had made improper payments of approximately $290,000 to Chinese officials to obtain preferential treatment for Nortek, relaxed regulatory oversight, and reduced customs duties, taxes, and fees.  SEC