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2008 FCPA Enforcement Index

Eleven organizations were named in Foreign Corrupt Practices Act enforcement actions by the Justice Department, the Securities and Exchange Commission, or both, during 2008. All of the companies on our list resolved their enforcement actions, except privately-held Nexus Technologies Inc.

The twenty-six individuals we've listed were either charged with new FCPA offenses, settled enforcement actions with the DOJ, SEC, or both, or had charges amended, reinstated or affirmed in rehearings or on appeal. In the case of David Kay and Douglas Murphy, the U.S. Supreme Court refused to review their FCPA convictions and sentences. In U.S. v. Kozeny the prosecution against Frederic Bourke is going ahead, while his co-defendant Victor Kozeny remains in the Bahamas fighting extradition to the United States and another co-defendant, David Pinkerton, was dismissed from the case.

During the year there were also five suits filed in U.S. federal court by parties acting as private litigants. The plaintiffs in those cases alleged behavior by the defendants that, if true, would likely violate the FCPA. Our list doesn't include FCPA-related class action lawsuits, which Kevin LaCroix at the D & O Diary has written about (here).

The pace of enforcement during the year was uneven. No individuals were named in enforcement actions until April. And during the first four months of the year, just a couple of actions against organizations were announced, probably because of a bottleneck during Congress' investigation into how corporate compliance monitors are appointed and paid.

There are now around 50 pending FCPA investigations at the DOJ and SEC, according to most estimates, with some investigations involving up to a dozen companies from single-industry segments (see, e.g., Panalpina, orthopedic device makers).

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Organizations (countries involved) / U.S. enforcement agencies / financial penalties including fines, disgorgement and interest:

• Fiat (Iraq, U.N. oil for food program) / DOJ, SEC / $17.7 million

• Siemens (Iraq, U.N. oil for food program) (Other violations related to Argentina, Bangladesh, Venezuela, Iraq, Israel, Nigeria, Vietnam, China, Russia, Mexico) / DOJ, SEC / $800 million

• Aibel (Nigeria) / DOJ / $4.2 million

• AGA Medical Corp. (China) / DOJ / $2 million

• Con-Way Inc. (Philippines) / SEC / $300,000

• Faro Technologies (China) / DOJ, SEC / $2.95 million

• Willbros Group (Bolivia, Ecuador, Nigeria) / DOJ, SEC / $32.3 million

• AB Volvo (Iraq, U.N. oil for food program) / DOJ, SEC / $19.6 million

• Flowserve Corp. (Iraq, U.N. oil for food program) / DOJ, SEC / $10.5 million

• Westinghouse Air Brake Technologies Corporation (India) (DOJ, SEC) $675,000

• Nexus Technologies Inc. (Vietnam) / DOJ / Pending

Individuals:

• Misao Hioki (Bridgestone) Two years prison, $80,000 fine

• Paul G. Novak (Willbros) Pending

• James K. Tillery (Willbros) Pending

• Shu Quan-Sheng (rocket scientist / AMAC International Inc) Pending

• William J. Jefferson (former member, U.S. House of Representatives) Pending

• Frederic Bourke (U.S. v. Kozeny) Pending

• Gerald Green (Hollywood movie producer) Pending

• Patricia Green (Hollywood movie producer) Pending

• Richard John Novak (diploma mill syndicate) Three-years probation, 300 hours community service

• Christian Sapsizian (Alcatel) Thirty months in prison, three-years supervised release, forteiture of $261,500

• Jason Edward Steph (Willbros) Pending

• Gerald Jansen (Willbros) $30,000 civil penalty

• Lloyd Biggers (Willbros) No financial penalty

• Carlos Galvez (Willbros) $35,000 civil penalty

• David Kay (American Rice) Thirty-seven months in prison

• Douglas Murphy (American Rice) Sixty-three months in prison

• Nam Nguyen (Nexus Technologies Inc) Pending

• Joseph Lukas (Nexus Technologies Inc) Pending

• Kim Nguyen (Nexus Technologies Inc) Pending

• An Nguyen (Nexus Technologies Inc) Pending

• Albert ?Jack? Stanley (KBR) Eighty-four months in prison (subject to reduction) and $11 million restitution

• Martin Eric Self (Pacific Consolidated Industries) Pending

• Roger Michael Young (ITXC Corporation) Five-years probation, three-months home confinement, three months in a community confinement center, $7,000 fine

• Yaw Osei Amoako (ITXC Corporation) Eighteen months in prison, two-years of supervised release, $7,500 fine

• Steven J. Ott (ITXC Corporation) Five-years probation, six months home confinement, six months in a community confinement center, $10,000 fine

• Ramendra Basu (The World Bank) Fifteen months in prison, two-years supervised released, fifty hours of community service

Private litigants:

• Supreme Fuels v. Harry Sargeant III et al

• Republic of Iraq v. ABB et al

• Grynberg v. BP et al

• Aluminum Bahrain BSC ("Alba") v. Alcoa et al

• Argo-Tech Corp v. Yamada Corp.

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If we've missed any names that should be included in the 2008 index, please let us know.
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Full post as published by The FCPA Blog on December 29, 2008 (boomark / email).