Distilled beverage company settles FCPA charges for $19 million
On October 27, the DOJ announced it had entered into a deferred prosecution agreement with a Chicago-based distilled beverage company to pay over $19 million in criminal penalties related to a conspiracy to violate the “anti-bribery, internal controls, and books and records provisions of the FCPA.” According to the DOJ, from 2006 through the end of the third quarter of 2012, the company’s Indian subsidiary paid bribes to numerous Indian government officials in exchange for the approval of a license to bottle a certain beverage product for sale in India, and to gain or retain general business opportunities in the Indian market. The bribes were authorized by an executive of the company’s Indian subsidiary, but the payments were made through third parties, such as the beverage bottler or distributors. The DOJ’s announcement stated that the company also “agreed with others to fail to implement and maintain an adequate system of internal accounting controls,” which would have helped to detect the subsidiaries’ “longstanding practice of making corrupt payments,” and the company was warned by outside advisors of the “risks associated with improper activities by third parties in India.”
As part of the deferred prosecution agreement, the company agreed to cooperate with the DOJ’s ongoing investigations and prosecutions, to improve its compliance program, and to report to the DOJ on those improvements. The company’s penalty reflected a 10 percent discount off the bottom of the applicable U.S. Sentencing Guidelines due to its cooperation and remediation; however, the DOJ noted that the resolution reflects a number of factors including, among other things, (i) the involvement of a company executive officer; (ii) an ineffective compliance program in place when the misconduct occurred; and (iii) significant delays caused by the company in reaching a timely resolution.
As previously covered by InfoBytes, the company settled related FCPA allegations with the SEC in July 2018 for over $8 million. However, the DOJ did not credit any portion of the SEC penalty because the company “did not seek to coordinate a parallel resolution with the department.”