Fresenius Medical Care Agrees to Pay $231 Million in Criminal Penalties and Disgorgement to Resolve Foreign Corrupt Practices Act Charges

On March 29, 2019, DOJ officials announced a non-prosecution agreement (“NPA”) with Germany-based Fresenius Medical Care AG & Co. KGaA (“Fresenius”) to resolve a seven-year DOJ and SEC investigation into FCPA violations.  Fresenius admitted to paying bribes to public officials to obtain or retain business, failing to implement reasonable internal accounting controls, and failing to maintain accurate books and records in connection with its activities in several countries in Africa and the Middle East between
Continue Reading

Patrick Ho, Former Head of Organization Backed by Chinese Energy Conglomerate, Sentenced to Three Years in Prison for International Bribery and Money Laundering Offenses

On March 25, 2019, Patrick Ho was sentenced to three years in prison for his role in a scheme to bribe officials of Chad and Uganda.  Ho, the former head of a non governmental organization, admitted to paying the bribes to obtain business advantages for CEFC China Energy Company Limited (“CEFC China”), an international energy and banking conglomerate.  The schemes involved a $2 million bribe to the then-president of Chad to obtain oil rights, as
Continue Reading

Lumber Liquidators Enters into Corporate Resolution for Securities Fraud and Agrees to Pay $33 Million Penalty

On March 12, 2019, Lumber Liquidators Holdings Inc. entered into a deferred prosecution agreement with DOJ and agreed to pay $33 million for filing materially false and misleading statements to investors based on its compliance with formaldehyde regulations.  According to the DPA, in 2014, U.S. flooring suppliers notified the company that its Chinese laminate products were emitting high levels of formaldehyde.  Despite visiting the Chinese laminate supplier and learning that the supplier could not demonstrate
Continue Reading

Mizrahi-Tefahot Bank LTD. Admits Its Employees Helped U.S. Taxpayers Conceal Income and Assets

On March 12, 2019, Mizrahi-Tefahot Bank Ltd. (“Mizrahi-Tefahot”), one of Israel’s largest banks, entered into a deferred prosecution agreement (“DPA”) with DOJ to settle a cross-border tax investigation.  Mizrahi-Tefahot admitted that, from 2002 until 2012, its employees helped U.S. customers evade U.S. taxes by concealing ownership and control of assets at the bank.  As part of the DPA, Mizrahi-Tefahot agreed to pay $195 million, which included restitution to the United States, disgorgement of fees paid
Continue Reading

Former KPMG Executive And Former PCAOB Employee Convicted of Wire Fraud

On March 11, 2019, a jury convicted David Middendorf, the former National Managing Partner for audit quality at KPMG LLP (“KPMG”), and Jeffrey Wada, a former employee of the Public Company Accounting Oversight Board (“PCAOB”), of wire fraud charges in connection with a scheme to use confidential PCAOB materials to improve KPMG’s performance on PCAOB inspections.  At trial, the government asserted that, beginning in fall 2015, Wada—an inspections leader at the PCAOB—began passing confidential information
Continue Reading

Mozambique’s Former Finance Minister Indicted Alongside Other Former Mozambican Officials, Business Executives, and Investment Bankers in Alleged $2 Billion Fraud and Money Laundering Scheme that Victimized U.S. Investors

On March 7, 2019, a four-count indictment was unsealed charging three former senior Mozambican government officials, investment bankers, and business executives in connection with a $2 billion fraud and money laundering scheme.  According to the indictment, between 2013 and 2016 the defendants organized loans made to entities controlled by the Mozambican government.  The defendants allegedly defrauded U.S. investors by misrepresenting the purpose of the loans and the ability of Mozambique and its state-owned entities to
Continue Reading

Deputy Attorney General Rod Rosenstein and Assistant Attorney General Brian A. Benczkowski Deliver Remarks on Corporate Enforcement Policies

Outgoing Deputy Attorney General Rod Rosenstein and Assistant Attorney General Brian A. Benczkowski both delivered public remarks in early March that touched upon familiar themes in relation to FCPA enforcement and corporate prosecutions more generally.  These themes included the front-line role that companies play in detecting and preventing corruption through robust compliance programs; changes made to DOJ’s “anti-piling-on” and corporate compliance monitor policies; and recent efforts by DOJ to increase transparency in its enforcement policies. 
Continue Reading

Mobile TeleSystems PJSC and Its Uzbek Subsidiary Enter into Resolutions of $850 Million with the Department of Justice for Paying Bribes in Uzbekistan

On February 22, 2019, Mobile TeleSystems PJSC (“MTS”), the largest mobile telecommunications company in Russia and an issuer of publicly traded securities in the United States, and its wholly owned Uzbek subsidiary, Kolorit Dizayn Ink LLC (“Kolorit”), entered a deferred prosecution agreement and guilty plea, respectively, to resolve charges based on their roles in a scheme to pay bribes in Uzbekistan.  In total, the entities agreed to pay a penalty of $850 million.

The entities
Continue Reading

Former President and Former Chief Legal Officer of Publicly Traded Fortune 200 Technology Services Company Indicted in Connection with Alleged Multimillion Dollar Foreign Bribery Scheme

On February 14, 2019, a federal grand jury returned an indictment charging two former officers of Cognizant Technology Solutions Corporation (“Cognizant”), a publicly traded Fortune 200 technology services company, in connection with a foreign bribery scheme.  The indictment alleged that, in April 2014, the two officers—the company’s former president and chief legal officer—authorized a $2 million payment to government officials in India to obtain the permit necessary to open a new office campus.  The individuals,
Continue Reading

Chinese Telecommunications Conglomerate, Affiliates, and CFO Indicted in Separate Alleged Fraud Schemes

On January 28, 2019, indictments were unsealed in Seattle and Brooklyn against Chinese telecommunications conglomerate Huawei Technologies Co. Ltd., a number of Huawei affiliates (collectively, “Huawei”), and Huawei’s CFO in connection with two separate alleged fraud schemes.  The indictment in Seattle charged two Huawei affiliates with theft of trade secrets, attempted theft of trade secrets, wire fraud, and obstruction of justice.  According to the indictment, between 2012 and 2014, Huawei undertook concerted, company-wide efforts to
Continue Reading

Two Ukrainian Nationals Indicted in Computer Hacking and Securities Fraud Scheme Targeting U.S. Securities and Exchange Commission

On January 15, 2019, DOJ unsealed indictments charging two Ukrainian individuals with conspiring to hack into the SEC’s computer systems and profit by trading on critical information they stole.  The indictment alleges that, between February 2016 and March 2017, defendants hacked into the SEC’s Electronic Data Gathering, Analysis and Retrieval (EDGAR) system and stole thousands of files, including annual and quarterly earnings reports containing confidential, nonpublic, financial information, which the SEC requires publicly traded companies
Continue Reading

IAV GmbH to Pay $35 Million Criminal Fine in Guilty Plea for Its Role in Emissions Issues

On December 18, 2018, officials announced that Germany-based automotive system maker IAV GmbH  (“IAV”) has agreed to plead guilty to one felony count and pay a $35 million criminal penalty in connection with its role in Volkswagen AG’s (“VW’s”) use of so-called “defeat device” software to improve performance on U.S. emissions tests.  According to court filings, starting in 2006, IAV worked with VW to design, test, and implement this software in VW- and Audi-branded diesel
Continue Reading

Former Head of Organization Backed by Chinese Energy Conglomerate Convicted of International Bribery, Money Laundering Offenses

On December 5, 2018, a federal jury in New York convicted the head of a Hong Kong- and Virginia-based nongovernmental organization on seven criminal counts for his participation in a multi-year, multimillion-dollar scheme to bribe top officials of Chad and Uganda to secure business advantages for a Chinese oil and gas conglomerate.  According to trial evidence and court documents, the defendant, Chi Ping Patrick Ho, was involved in two schemes: offering a $2 million bribe
Continue Reading

Four Defendants Charged in Panama Papers Investigation for Their Roles in Panamanian-Based Global Law Firm’s Decades-Long Scheme to Defraud the United States

On December 4, 2018, four individuals were charged with wire fraud, tax fraud, money laundering, and other counts in connection with a criminal scheme involving Mossack Fonseca & Co. (“Mossack Fonseca”), a Panamanian law firm.  According to the indictment, from 2000 through 2017, the defendants conspired with others to help U.S. taxpayers and clients of Mossack Fonseca to conceal assets from the IRS through fraudulent means.  These individuals allegedly used sham foundations and shell companies
Continue Reading

Deputy Attorney General Rod J. Rosenstein Delivers Remarks at the American Conference Institute’s 35th International Conference on the Foreign Corrupt Practices Act

On November 29, 2018, Deputy Attorney General Rod Rosenstein clarified several aspects of the DOJ’s corporate cooperation and resolution policies in remarks at the American Conference Institute’s 35th International Conference on the Foreign Corrupt Practices Act.  With respect to cooperation credit, Rosenstein acknowledged that, when the government alleges criminal conduct that continued at the company over a long period of time, it may not be reasonable or practical to require companies to identify every employee
Continue Reading

LexBlog