Lessons Learned from FCPA Enforcement in 2013 - Webinar Slides


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Learn some of the key lessons from FCPA enforcement actions in 2013. Understand the importance of documenting investigations and get a peek at how i-Sight Case Management Software can be used to help you manage the investigation process.

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Lessons Learned from FCPA Enforcement in 2013 - Webinar Slides

  1. 1. 2013: The FCPA Year in Review Thomas Fox, Attorney at Law
  2. 2. Thomas Fox Tom Fox has practiced law in Houston for 25 years. He now assists companies with FCPA compliance, risk management and international transactions. He was most recently the General Counsel at Drilling Controls, Inc., a worldwide oilfield manufacturing and service company. Before that he was Division Counsel with Halliburton Energy Services, Inc. where he supported Halliburton’s software division and its downhole division, which included the logging, directional drilling and drill bit business units. Today, Tom writes and speaks nationally and internationally on a wide variety of topics, ranging from FCPA compliance, indemnities and other forms of risk management for a worldwide energy practice, tax issues faced by multi-national US companies, insurance coverage issues and protection of trade secrets.
  3. 3. Practices Under the FCPA and Bribery Act/GSK in China: A Game Changer in Compliance
  4. 4. The FCPA Year in Review/AntiBribery Leadership
  5. 5. I. Enforcement Actions Involving Companies Enforcement Actions: • Parker Drilling • Ralph Lauren • Total • Diebold • Stryker
  6. 6. Enforcement Actions November and December Enforcement Actions: • Weatherford • Bilinger SE • ADM
  7. 7. Key Takeaways • Self-Reporting? • Remediation • External Monitors
  8. 8. How can i-Sight help? Intake • • • i-Sight Web Form Eternal Web Form Email-to-Case Case Management • • • • • • Notes To-Do’s Emails Attachments Interview Reports Investigation Reports Alerts / Workflow Access / Roles Reporting • • • Writer Dashboard Distribution
  9. 9. II. Individual Enforcement Actions Enforcement Trends-Individuals • Mike Volkov- “It is clear that FCPA enforcement for 2013 will go down as the year of criminal prosecutions of individuals.” • Full use of all criminal law enforcement techniques • Clear credit given for cooperation • Use of other statutes and charges
  10. 10. Individuals-BizJet 1. Bernd Kowalewski – President and Chief Executive Officer (CEO); 2. Peter DuBois – Vice President of Sales and Marketing; 3. Neal Uhl – Vice President of Finance; and 4. Jald Jensen – Regional Sales Manager
  11. 11. Bribery Box Score BizJet Executive or Employee Named Jald Jensen Payment Made To Jald Jensen Peter DuBois, Neal Uhl and Jald Jensen Neal Uhl Peter DuBois Official 3 Official 2 Neal Uhl Jald Jensen Jald Jensen Jald Jensen Jald Jensen Jald Jensen Neal Uhl Official 6 Official 2 Mexican Federal Police Chief Official 5 Official 4 Mexican Federal Police Official 4 Mexican Federal Police Official 5 Official 5 Amount of Others Involved Payment Cell Phone and Peter DuBois and Neal Uhl $10K $2K Peter DuBois $20K $30K $10K Jald Jensen Neal Uhl and Jald Jensen $18K $50K $176 Jald Jensen $40K $210K $6K $22K Neal Uhl Neal Uhl Neal Uhl
  12. 12. Penalty Box Score Individual Fine or Potential Incarceration Actual Incarceration Disgorgement Peter DuBois $159,950 108 to 120 months in jail 8 months home incarceration, 60 month’s probation Neal Uhl 60 months in jail $10,000 60 month’s probation
  13. 13. Individuals-Alstom • Frederic Pierucci , 45, Vice President of global sales for U.S. subsidiary. • David Rothschild, former vice president of sales U.S. subsidiary. • William Pomponi, former US VP of Sales. • Lawrence Hoskins, VP AsiaPac Region.
  14. 14. Frederic Cilins-BSRG • BSRG representative charged with obstruction of justice. • Alleged to have entered into 5 contracts to pay bribes to wife of President of Guinea. • Denied bail and awaiting a March 2014 trial.
  15. 15. Uriel Sharef-Siemens • He met with payment intermediaries in the United States and agreed to pay $27 million in bribes to Argentine officials. • Sharef also enlisted subordinates to conceal the payments by circumventing Siemens' internal accounting controls.” • The final judgment, to which Sharef consented, enjoins him from violating the anti-bribery and related internal controls provisions of the FCPA and orders him to pay a $275,000 civil penalty, the second highest penalty assessed against an individual in an FCPA case.”
  16. 16. Willbros-Paul Novak • Novak pled guilty to one count of conspiracy to violate the FCPA and one substantive count of violating the FCPA. • Novak admitted that from approximately late-2003 to March 2005, he conspired with others to make a series of corrupt payments”. • Novak was sentenced to serve 15 months in a federal prison.
  17. 17. Direct Access Partners • Tomas Alberto Clarke Bethancourt – Direct Access Partners broker • Jose Alejandro Hurtado - Direct Access Partners broker • Ernesto Lujan - head of the Miami office of DAP-conspiracy to bribe an officer at a state-owned Venezuela bank in exchange for bond trading business. He was charged with substantive FCPA and Travel Act offenses and conspiracy counts. He was also charged with two money launderingrelated counts. • María de los Ángeles González de Hernandez , an official at a stateowned Venezuelan bank BANDES for receiving the bribes. She is charged with then authorizing fraudulent trades, which generated more than $66 million in revenue on trades in Venezuelan sovereign or state-sponsored bonds for DAP. The DOJ also charged her with Travel Act conspiracy and substantive offenses, and two money laundering-related counts.
  18. 18. Alain Reido • Continued Fallout from Maxwell Technologies Enforcement Action from 2011 • General Manager of Maxwell Technologies SA • Alleged that he handled bribe payments
  19. 19. III. New Best Practices-Monitor, Monitor, Monitor Morgan Stanley • Only Publicly announced Declination naming the entity • DOJ and SEC Press release both cited transaction monitoring as one of the factors for granting the Declination
  20. 20. Eli Lilly-Poland • Donations made to charity run by Director General of Silesian Health Service • Date of donations matched up dates contracts granted or approved • Huge spike in sales to Silesia
  21. 21. Weatherford and Diebold What are the minimum best practices? What are evolving international and industry standards?
  22. 22. IV. Ongoing InvestigationsDocument Document Document JP Morgan-Sons and Daughters Hiring Program • Provided for Two-Tiered Track • Original purpose of program • Transparency • Visibility • ‘Spreadsheet’ found tying contracts and other business opportunities to hiring decisions
  23. 23. Evolution of Program • Allowed sons and daughters of Chinese government officials to be fast-tracked • Fewer job interviews required • Relaxed hiring standards • Subpar academic records • Lacking relevant experience
  24. 24. Hiring of Government officials • Not illegal under the FCPA but Red Flags can be raised • Opinion Releases approving such hiring: • 82-04 • 84-01 • 95-03
  26. 26. Detect, Remediate & Prevent with i-Sight
  27. 27. Opinion Release 13-01 • Humanitarian aid approved • What does it mean for corporations and CSR? • Each matter stands on its own facts
  28. 28. Questions? Please submit any questions you have.
  29. 29. Thank-you for Participating in Today’s Webinar How you can reach Thomas Fox Ph: 832-744-0264 www.tfoxlaw.com tfox@tfoxlaw.com  Follow me at www.twitter.com/tfoxlaw. Follow my blog at http://tfoxlaw.wordpress.com/  Contact us at i-Sight j.gerard@i-sight.com