Subscribe to our FinCrimes Update for news about the Foreign Corrupt Practices Act and related prosecutions and enforcement actions.
On March 29, the UK Serious Fraud Office charged another Alstom S.A. employee, Terence Stuart Watson, in its ongoing corruption investigation of the beleaguered French power and transportation company. The SFO has previously charged 6 other individuals in this investigation. The charges against Watson, the Alstom Country President for the UK and Managing Director of Alstom Transport UK & Ireland, are related to alleged bribery in Hungary concerning the companys supply of trains to the Budapest Metro between 2003 and 2008. The SFOs prior charges have involved alleged corruption spanning Hungary, India, Poland, and Tunisia, and included charges against the former Senior Vice President of Ethics and Compliance related to alleged bribery in Hungary. In late 2014, the company pleaded guilty to FCPA charges brought by the US Department of Justice, and agreed to pay a record $772 million fine to resolve those charges.
Following its December guilty plea in the UK, global building and infrastructure company Sweett Group on Friday was ordered by a UK court to pay £2.25 million (including a fine of £1.4 million) for violating Section 7 of the UK Bribery Act of 2010. This was the first-ever conviction and sentence for a company under Section 7, which in essence penalizes companies for failing to prevent bribes made on their behalf. The conduct at issue related to a three-year arrangement in the UAE to secure contracts related to large building contracts. Prior FCPA Scorecard coverage is also available.
On January 8, the United Kingdoms Serious Fraud Office announced that Smith and Ouzman Ltd, a printing company specializing in official documents such as election ballots, was ordered to pay penalties totaling £2.2 million following its 2014 conviction under the Prevention of Corruption Act 1906. The SFOs announcement regarding the sentencing stated that its investigation began in 2010 and centered on £395,074 in corrupt payments made to foreign officials in Kenya and Mauritania. Two of the companys former employees, also convicted in connection with the same investigation, were ordered to pay penalties totaling over £20,000.
On December 2, 2015 the Sweett Group admitted to violating Section 7 of the U.K.s Bribery Act of 2010 failure to prevent bribery regarding its conduct in the Middle East. According to the Sweett Group, the underlying conduct was related to alleged bribery from 2009 to 2011 involving a former employee located in Dubai. While the SFO has not yet announced specifics associated with the conduct or any penalties that may be imposed, it previously announced the opening of its investigation into Sweett Groups activities in the United Arab Emirates and elsewhere. This investigation appeared to have been triggered by a 2013 Wall Street Journal article that reported allegations of bribery involving the construction of a hospital in Morocco. According to the WSJ, a bribe was offered to a United Arab Emirates officials personal foundation in order to secure the design work contract for the $100 million project.
On May 27, a London jury found three employees of Swift Technical Solutions Ltd (Swift) not guilty of corruption charges in connection with alleged corrupt payments to tax officials in Nigeria. The SFO announced the verdict on June 2. As to one defendant, the jury was unable to reach a verdict on one count and was discharged; the SFO informed the Southwark Crown Court that it would not seek to retry that defendant on that count and the court entered a verdict of not guilty. The SFO brought the corruption charges in late 2012 after a two-year investigation related to the tax affairs of a Swift Nigerian subsidiary. The SFO alleged that the Swift employees paid bribes totaling approximately £180,000 in 2008 and 2009 to Nigerian tax officials to avoid, reduce, or delay paying tax on behalf of workers placed by Swift. The alleged bribes occurred before the enactment of the U.K. Bribery Act and allegedly went to agents of two Nigerian Boards of Internal Revenue - the Rivers State Board of Internal Revenue and the Lagos State Board of Internal Revenue. The SFO did not charge Swift with any criminal offense, citing its cooperation with the agency.
On May 12, the UK Serious Fraud Office announced yet more corruption charges against Alstom SA, the beleaguered French power and transportation company that last year pleaded guilty in the US to allegations of bribery and agreed to pay the largest criminal penalty for FCPA violations ever to the DOJ. The new charges were brought against the former senior vice president of ethics and compliance and director of Alstom International Limited for alleged bribery in Hungary related to a Budapest Metro contract for trains. The charges arise from the same conduct as last months bribery charges against another company and employee affiliated with Alstom, and continue the recent trend of compliance professionals facing increased personal liability. The SFO has now charged six individuals in its long-running investigation of Alstom.
Continuing the steady drumbeat of corruption allegations against Alstom SA, a French power and transportation company, on April 16 new bribery charges were brought by the UK Serious Fraud Office against a company and employee affiliated with Alstom. These latest charges related to alleged bribery in Hungary related to a Budapest Metro contract for trains. The charges are in addition to 2014 charges in the UK against the same Alstom subsidiary and other former employees related to corruption in India, Poland, and Tunisia, and separately, according to news reports, related to alleged bribes in Lithuania. Alstom also pleaded guilty last year in the US to allegations of bribery in yet a different set of countries, and agreed to pay the largest criminal penalty for FCPA violations ever to the DOJ. Several Alstom employees in the US have either pleaded guilty or are under indictment.
On August 4, 2014, the United Kingdoms Serious Fraud Office announced that four former executives of Innospec Inc. (formerly known as Associated Octel Corp.) were sentenced following a long-running investigation related to conduct in in Indonesia and Iraq. Three of the four were sentenced to prison terms, with a former chief executive receiving four years in prison after being convicted at a jury trial earlier this year. A former regional sales director received an 18 month sentence following a conviction at trial, and another former CEO was sentenced to two years following a guilty plea. The fourth individual, a former business unit director, received a suspended 16-month sentence following a guilty plea. The sentencing of these former executives comes after Innospec pled guilty in 2010 to FCPA and anti-bribery criminal charges brought by DOJ and the UKs Serious Fraud Office, and after Innospec settled civil charges brought by the SEC. The charges alleged that Innospec, a global specialty chemicals company, had bribed Indonesian and Iraqi government officials to win sales of a gasoline additive after environmental legislation in the US and abroad led to a decline in sales of that additive. As part of the settlement, Innospec paid U.S. authorities $27.5 million, and paid UK authorities $12.7 million. Two of the four individuals sentenced in the UK had also previously settled with the SEC over civil FCPA charges.
- John R. Coleman to discuss “CFPB update” at the MBA Legal Issues and Regulatory Compliance Conference
- Kathryn L. Ryan to discuss "State licensing and NMLS challenges" at MBA’s Legal Issues and Regulatory Compliance Conference
- Jonice Gray Tucker to discuss “Fair lending and equal opportunity laws” at the MBA Legal Issues and Regulatory Compliance Conference
- Jeffrey P. Naimon to discuss “Contemplating the boundaries of UDAAP” at the MBA Legal Issues and Regulatory Compliance Conference
- Steven vonBerg to speak at closing “super session“ on compliance topics at MBA Legal Issues and Regulatory Compliance Conference
- Buckley Webcast: Fifth Circuit muddles CFPB’s plans to use in-house judges in enforcement proceedings
- Jeffrey P. Naimon to discuss “Understanding the ESG impact on compliance” at the ABA’s Regulatory Compliance Conference