Subscribe to our FinCrimes Update for news about the Foreign Corrupt Practices Act and related prosecutions and enforcement actions.
On February 8th, Tamas Morvai, a former executive of the Hungarian telecommunications company, Magyar Telekom, settled a 2011 civil complaint filed by the SEC. The trial of the remaining co-defendants is scheduled for May 8. As part of the settlement, Morvai agreed to pay a $60,000 civil penalty and did not admit or deny the SEC’s allegations. Morvai also admitted that U.S. courts had jurisdiction over the case. The issue of jurisdiction had been contested; in 2013, the court denied the defendants’ motion to dismiss for lack of personal jurisdiction.
The SEC’s complaint alleged that Morvai, along with two other co-defendants, authorized bribes to Macedonian government officials and others. In 2014, the SEC dropped allegations regarding payments to government officials in Montenegro, substantially narrowing the allegations in the case. Magyar Telekom and its parent, Deutsche Telekom AG, settled allegations regarding payments to government officials in Macedonia and Montenegro with the SEC and DOJ in 2011. Prior Scorecard coverage of the Magyar Telekom investigation can be found here.
This outcome of this lengthy case illustrates that individual defendants can still achieve relatively favorable outcomes when they choose to litigate FCPA cases, even after the corporate defendants have reached a resolution.
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.
- Daniel R. Alonso to discuss "The international compliance situation and new challenges" at the World Compliance Association Covid Compliance Conference
- Benjamin W. Hutten to discuss "Understanding OFAC sanctions" at a NAFCU webinar
- Garylene D. Javier to discuss "Navigating workplace culture in 2020" at the DC Bar Conference