In a surprising break from past trends for US enforcement of the Foreign Corrupt Practices Act (FCPA), none of the five corporate enforcement actions resolved by the US Department of Justice (DOJ) in 2022, and only two of the six cases resolved by the Securities & Exchange Commission (SEC), involved Asia Pacific countries. Not so
The Department of Justice (DOJ) “KleptoCapture” Task Force (the “Task Force”), launched shortly after Russia’s invasion of Ukraine earlier this year, is characterized by DOJ as a key part of the current Administration’s broader anti-corruption initiative. The role of the Task Force is to support the enforcement of sanctions and export control restrictions imposed against…
On February 17, the Securities and Exchange Commission (SEC) announced a settlement with KT Corporation (KT Corp.), South Korea’s largest comprehensive telecommunications operator, for alleged violations (neither admitted nor denied by the company) of the books and records and internal accounting control provisions of the Foreign Corrupt Practices Act (FCPA).
This matter, the first FCPA corporate settlement in 2022, is of interest for several reasons:Continue Reading In First FCPA Corporate Matter for 2022, SEC Ties Important Aspects of the Resolution to the Company’s Cooperation – and Other Key Takeaways
The Organisation for Economic Co-operation and Development (OECD) Council issued a Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions (the “2021 Recommendation”) on November 26, 2021. As we reflect on 2021 in terms of US enforcement actions and policy, and the Biden Administration’s new anti-corruption strategy issued in December, some further assessment of this Recommendation seemed appropriate.
The Council’s last recommendation in this area was issued in 2009. Intervening developments and experience gave rise to the 2021 Recommendation, which was under consideration for some time prior to its issuance.
The 2021 Recommendation cannot be characterized with a single headline. It is a multi-faceted document, comprised of 31 individual recommendations divided in to 16 sections. It is broad in scope, covering the waterfront of the OECD’s historical activity in the anti-corruption arena—not just through the Anti-Bribery Convention but through some of its “soft law” instruments—as well as some important issues not previously addressed by the OECD.Continue Reading Key Takeaways from the OECD 2021 Recommendation on Foreign Bribery
On January 21, 2022, the DOJ issued a rare FCPA Opinion Procedure Release, only the second since 2014. While the facts presented were quite unusual – a ship, with its captain and crew, detained without explanation in the waters of a foreign country, and facing an ambiguous demand for payment in order to be released – it offers more broadly applicable lessons.
Facts Presented to DOJ
The facts at issue arose from detention by the naval forces of a foreign country (“Country A”) of a maritime vessel, including the captain and crew, owned by a US-based company (the “Requester”) and the accompanying demand for payment of $175,000 in cash from a third party purporting to act on behalf of the Country A Navy (the “Third-Party Intermediary”). The Requester, concerned that the third party intended to pass on the payment being demanded to one or more Country A government officials, decided to seek an opinion from the DOJ. Resolution of the matter was urgent, as the detained captain was suffering from serious medical conditions putting his health and safety at significant risk.Continue Reading DOJ Releases Rare FCPA Opinion, Finding No Corrupt Intent or Business Purpose Where Payment Made Under Duress
The World Bank Group (the Bank) issued its fourth joint Sanctions System Annual Report on October 18, covering the Bank’s fiscal year from July 1, 2020 through June 30, 2021. The report includes updates by the Integrity Vice Presidency (INT), the Office of Suspension and Debarment (OSD), and the Sanctions Board.
Notably, the number of…
It seems that at present in the UK hardly a week goes by without somebody calling for a public inquiry or the government announcing that it intends to launch one. There have been, and remain, many calls for a public inquiry or inquiries into issues related to the COVID-19 pandemic, but there are also calls…
In late December, the United States Court of Appeals for the Second Circuit affirmed the conviction of Chi Ping Patrick Ho on seven counts alleging multiple FCPA and money laundering (and related conspiracy) violations. The decision is notable for its construction of various FCPA provisions, and further demonstrates the expansive jurisdictional reach of anti-money laundering laws to dollar-denominated transfers.
Ho, a citizen of Hong Kong, served as an officer and director of the Hong Kong-based non-governmental organization China Energy Fund Committee (CEFC-NGO), which was funded by Shanghai-based energy conglomerate China CEFC Energy Company Limited (CEFC). Ho also served as an officer and director of a CEFC-affiliated US non-profit (US NGO), funded by CEFC NGO.
Ho’s conviction, for which he was sentenced to 36 months imprisonment and a US$400,000 fine, stemmed from two alleged bribery schemes involving (1) an attempted US$2 million cash delivery to the President of Chad (which was purportedly rejected by the President) and (2) a US$500,000 wire transfer to a charity associated with the foreign minister of Uganda. Notably, the US dollar-denominated wire originated from a bank in Hong Kong, which was transmitted through its operating unit in the United States as a correspondent to another bank in New York, which in turn was acting as a correspondent for a beneficiary bank in Uganda for final credit to an ultimate beneficiary NGO. Both acts were allegedly made for the benefit of CEFC’s commercial interests in Africa.Continue Reading United States v. Ho
In a recent roundtable as part of the World Bank Office of Suspension and Debarment’s Fifth International Debarment Colloquium, panelist Joseph Mauro (an Integrity Compliance Specialist with the Bank’s Integrity Vice Presidency (INT)) discussed efforts to move from a “stick” to a “carrot” approach with respect to corporate compliance programs.
Under the Bank’s current system, while implementation of a compliance program is a remedial measure for which mitigating credit may apply, individuals within the Integrity Compliance Office were rarely involved in reviewing a compliance program to any significant extent until after a company has already been sanctioned. Under this process, a company’s compliance program was typically reviewed in-depth only as a condition for release from sanction.Continue Reading World Bank Purports to Move From “Stick” to “Carrot” Approach on Compliance
On March 5, 2019, federal prosecutors indicted Mikaela Sanford, former employee of Varsity Blues mastermind William “Rick” Singer, alleging a racketeering conspiracy between Sanford, two proctors for the ACT and SAT exams, and 12 coaches and officials from Georgetown University, the University of Southern California, the University of California, Los Angeles and Wake Forest University. On August 7, 2020, Sanford agreed to plead guilty to one count of conspiracy to commit racketeering, becoming the 7th individual to plead guilty to the charge.
Five days later, US District Judge Nathaniel M. Gorton sentenced Morrie Tobin – the man who tipped off federal prosecutors to the Varsity Blues college admissions scheme – for his role in two unrelated securities fraud schemes. According to federal prosecutors, Tobin alerted the government – during the government’s investigation into Tobin for securities fraud – that former Yale University women’s soccer coach Rudy Meredith sought a bribe in exchange for getting Tobin’s daughter into Yale. Although federal prosecutors did not charge Tobin in connection with the Varsity Blues scheme, Tobin’s sentencing hearing confirmed his identity as the Varsity Blues tipster in open court for the first time.Continue Reading Employee of Varsity Blues Mastermind William ‘Rick’ Singer and Varsity Blues Whistleblower Plead Guilty