2024 Year-End FCPA Update
Client Alert | February 3, 2025
This update provides an overview of key FCPA and other international anti-corruption enforcement, litigation, and policy developments from 2024, as well as our observations and analysis regarding the trends we are seeing from this activity.
There is substantial change afoot in Washington, and these are still early days, but whether enforcement of the Foreign Corrupt Practices Act (FCPA) will decline in a second Trump Administration remains to be seen. It is notable that predictions of FCPA underenforcement proved unfounded during the President’s first term. From what we encounter in our daily work on behalf of our clients, the statute’s dual enforcement groups at the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) remain committed and are riding the wave of a busy 2024, with dozens of prosecutions, numerous important policy announcements, and a record four-for-four showing in criminal trials. Moreover, international partners continue to enforce their foreign corruption statutes with increasing vigor. As the size of our annual update portends, there continues to be much to discuss regarding the FCPA and related international anti-corruption developments.
Gibson Dunn has maintained its industry-leading expertise in this space by virtue of the complex, cutting-edge anti-corruption challenges we have had the privilege of helping our clients navigate day in and day out for the past several decades. We were honored to continue our streak in 2024 of being ranked Number 1 in the Global Investigations Review “GIR 30” ranking of the world’s top investigations practices for the seventh consecutive year and the ninth time in the last ten years.
For additional analysis on anti-corruption enforcement and related developments from 2024, we invite you to register here and join us for our upcoming complementary webcast presentation on February 27, 2025: “2024 Year-End FCPA Update.” As usual, CLE credit will be offered.
OVERVIEW OF THE FCPA & OTHER U.S. LAWS TARGETING FOREIGN CORRUPTION
The FCPA’s anti-bribery provisions make it illegal to offer or provide money or anything else of value to officials of foreign governments, foreign political parties, or public international organizations with corrupt intent, for the purpose of obtaining or retaining business. These provisions apply to “issuers,” “domestic concerns,” and those acting on behalf of issuers and domestic concerns, as well as to “any person” who acts while in the territory of the United States. The term “issuer” covers any business entity that is registered under 15 U.S.C. § 78l or that is required to file reports under 15 U.S.C. § 78o(d) (typically referring to companies whose shares are listed on a national exchange). In this context, foreign issuers whose American Depositary Receipts (ADRs) or American Depositary Shares (ADSs) are listed on a U.S. exchange are “issuers” for purposes of the FCPA. The term “domestic concern” is even broader and includes any U.S. citizen, national, or resident, as well as any business entity that is organized under the laws of a U.S. state or that has its principal place of business in the United States.
In addition to the anti-bribery provisions, the FCPA also has “accounting provisions” that apply to issuers and in some cases those acting on their behalf, and that are comprised of two core components. First, the books-and-records provision requires issuers to make and keep accurate books, records, and accounts that, in reasonable detail, accurately and fairly reflect the issuer’s transactions and disposition of assets. Second, the FCPA’s internal accounting controls provision requires that issuers devise and maintain reasonable internal accounting controls aimed at preventing and detecting FCPA violations. Prosecutors and regulators frequently invoke these latter two sections when they cannot establish the elements for an anti-bribery prosecution or as a mechanism for compromise in resolution negotiations. Because there is no requirement that a false record or deficient control be linked to an improper payment, even a transaction that does not constitute a violation of the anti-bribery provisions can lead to prosecution under the accounting provisions if inaccurately recorded or attributable to an internal accounting controls deficiency.
Further, as discussed in our 2023 Year-End FCPA Update, in December 2023 the United States enacted the Foreign Extortion Prevention Act (FEPA). FEPA explicitly criminalizes the “demand side” of foreign bribery by prohibiting the receipt of corrupt payments by foreign officials, which the FCPA does not do. However, the practical impact of FEPA remains to be seen given that DOJ has long been prosecuting foreign officials for their receipt of bribes under the money laundering statute, as noted immediately below.
Finally, prosecutors from the FCPA Unit of DOJ (and, to a lesser extent, enforcers from the SEC’s FCPA Unit as to violations of the securities laws) frequently charge non-FCPA offenses such as money laundering, mail and wire fraud, Travel Act violations, securities fraud, tax violations, and even false statements, in addition to or instead of FCPA charges. The most prevalent among these “FCPA-related” charges, in the criminal context, is money laundering—a generic term used as shorthand for statutory provisions, including 18 U.S.C. § 1956, that generally criminalize conducting or attempting to conduct a transaction involving proceeds of “specified unlawful activity” or transferring funds to or from the United States, in either case to promote the carrying on of specified unlawful activity; to conceal or disguise the nature, location, source, ownership or control of the proceeds; or to avoid a transaction reporting requirement. “Specified unlawful activity” includes over 200 enumerated U.S. crimes and certain foreign crimes, including the FCPA, fraud, and corruption offenses under the laws of foreign nations. Although this has not always been the case, in recent history DOJ has frequently deployed the money laundering statutes to charge “foreign officials” who are not themselves subject to the FCPA. It is not unusual for DOJ to charge the alleged provider of a corrupt payment under the FCPA and the alleged recipient with money laundering, particularly if the recipient is employed by a state-owned enterprise. As noted above, at least for activity post-dating the passage of FEPA in December 2023, DOJ now has another prosecutorial tool to wield in its international anti-corruption enforcement efforts.
FCPA AND FCPA-RELATED ENFORCEMENT STATISTICS
The below table and graph detail the number of FCPA enforcement actions initiated by DOJ and the SEC, the statute’s dual enforcers, in each of the past 10 years.
Of course, as regular readers of these pages know, and as mentioned above, a substantial proportion of U.S. anti-corruption enforcement actions are predicated on “FCPA-related” charges arising from the same corruption investigations by the same prosecutors but not charged under the FCPA itself. Examples of “FCPA-related” charges include wire and mail fraud, securities fraud, tax offenses, and most significantly money laundering. Although this is predominantly a criminal phenomenon, 2024 saw two rare “FCPA-related” charges filed by the SEC in the Adani case discussed below. The below table and graph illustrate the past 10 years of FCPA plus FCPA-related enforcement activity.
KEY 2024 FCPA-RELATED ENFORCEMENT DEVELOPMENTS
As our longtime readers know, we endeavor in these pages not only to describe the year’s individual FCPA and related enforcement actions, but also to discern patterns, themes, and trends in this enforcement activity. With respect to 2024, we have identified seven developments of note:
- DOJ reaches subsidiary-only resolutions with parent compliance guarantees;
- DOJ further defines the poles in Corporate Enforcement Policy credit;
- DOJ FCPA “declinations with disgorgement” continue as a trickle;
- Rounding out the SEC FCPA enforcement docket;
- Individual FCPA enforcement actions come in bunches;
- Not quite “FCPA-related,” but still worthy of mention; and
- DOJ’s FCPA Unit runs the table, going four-for-four at trial.
1. DOJ Reaches Subsidiary-Only Resolutions with Parent Compliance Guarantees
FCPA practitioners well understand that a key term in any criminal resolution negotiation is the defendant corporate entity or entities. Although there are many variations, one common approach that developed over the years was for the subsidiary(ies) most involved in the conduct to plead guilty, and for the parent company to enter into a deferred or non-prosecution agreement, at least where there was some alleged involvement by the parent. This approach allowed DOJ to secure the most serious form of resolution as to the most culpable corporate entity, while allowing the company (as a whole) to avoid the potentially dire collateral impacts that can accompany a guilty plea at the parent level.
Historically, DOJ has frequently insisted in FCPA cases upon at least some form of criminal resolution with the parent entity, even where the misconduct was principally concentrated in subsidiary businesses. There are certainly exceptions to this rule, notably including a three-subsidiary combination resolution Gibson Dunn negotiated to spare parent company Hewlett-Packard Company from criminal enforcement as described in our 2014 Mid-Year FCPA Update. But the exception crept ever closer to the rule in 2024, as fully one-third of FCPA corporate criminal prosecutions did not involve a parent-level defendant. Still, as described below, the parent companies were required to sign on to the subsidiary resolutions to guarantee the compliance and reporting obligations that typically accompany FCPA resolutions would be applied across the corporate enterprise and not only the subsidiary.
McKinsey and Company Africa (Pty) Ltd.
The most recent example of this phenomenon is DOJ’s resolution with the South African subsidiary of the multinational business consultant McKinsey & Company. On December 5, 2024, DOJ announced a deferred prosecution agreement with McKinsey and Company Africa arising from allegations that, between 2012 and 2016, the entity conspired to violate the FCPA’s anti-bribery provisions by agreeing to make corrupt payments to officials of two state-owned companies in South Africa. The South African McKinsey entity allegedly partnered with local South African consulting firms qualified under the Broad-based Black Economic Empowerment Act while knowing that those firms would use a portion of their fees to pay the purported bribes in exchange for confidential information about competitors and for steering contracts toward sole source awards to McKinsey rather than competitive tenders. In a related matter announced the same day, DOJ unsealed a December 2022 plea agreement with Vikas Sagar, the McKinsey partner allegedly at the center of the corruption scheme, pursuant to which Sagar agreed to plead guilty to one count of conspiracy to violate the FCPA’s anti-bribery provisions.
To resolve the corporate matter, the McKinsey South Africa entity entered into a three-year deferred prosecution agreement and agreed to pay a criminal fine of approximately $123 million, which reflects a 35% discount applied from the fifth percentile of the U.S. Sentencing Guidelines range for the company’s cooperation and remediation. Although it is now DOJ policy to impose forfeiture in addition to a criminal fine in non-issuer cases such as this, as discussed in our 2023 Year-End FCPA Update, DOJ did not do so here as McKinsey had already disgorged all revenues from the affected contracts to South African authorities. DOJ also agreed to credit up to half of the criminal fine against penalties McKinsey paid to South African authorities in a forthcoming resolution, providing the penalty is paid within 12 months. Finally, although not a party to the criminal case, parent McKinsey & Company co-signed the subsidiary resolution, agreeing to fulfill the cooperation, compliance program enhancement, self-reporting, and other compliance-related obligations across the whole of McKinsey’s global operations for the three-year term of the subsidiary’s deferred prosecution agreement. McKinsey’s FCPA resolution was followed less than 10 days later with a separate, larger criminal resolution arising from McKinsey’s consulting work in the opioids industry, announced on December 13, 2024.
Telefónica Venezolana C.A.
Working backward through the year, the second example of a subsidiary-only criminal resolution in 2024 was announced on November 8, when Telefónica Venezolana, the Venezuelan subsidiary of the Spain-based international telecommunications company Telefónica S.A., entered into a deferred prosecution agreement with DOJ to resolve allegations of bribery associated with a 2014 currency auction. According to DOJ, Telefónica Venezolana used a consultant to receive preferential access to the auction to exchange U.S. dollars for Venezuelan bolivars, knowing that the consultant would bribe Venezuelan government officials controlling access to the currency exchange. Telefónica Venezolana allegedly concealed its payments to the consultant by purchasing equipment at inflated prices from suppliers that entered into the consulting agreements on Telefónica’s behalf.
To resolve the matter, Telefónica Venezolana agreed to enter into a three-year deferred prosecution agreement alleging a conspiracy to violate the FCPA’s anti-bribery provisions and to pay a criminal fine of $85.26 million. Although not named as a defendant, parent Telefónica S.A. agreed to extend the subsidiary’s cooperation and compliance enhancement obligations for the three-year term to the full Telefónica enterprise. Notably, although parent Telefónica S.A. is a U.S. ADR issuer whose Brazilian subsidiary (also an ADR issuer) entered into a separate SEC FCPA resolution in 2019 as described in our 2019 Year-End FCPA Update, there was no parallel SEC resolution associated with the 2024 Venezuelan matter. Although it is not unusual for a listed company to resolve civil FCPA charges with the SEC and not criminal FCPA charges with DOJ, given the lower burden of proof and broader accounting theories available to the SEC, we are not familiar with any example of an issuer or its affiliate resolving with DOJ and not the SEC in an FCPA matter. It is presently unclear if Telefónica S.A. will enter into an SEC resolution associated with the Venezuela matter.
Raytheon Company
The third and final example of a subsidiary-only criminal FCPA resolution from 2024 was that with global defense contractor Raytheon. On October 16, 2024, DOJ and SEC announced parallel resolutions relating to allegations that, between 2012 and 2016, Raytheon authorized nearly $2 million in corrupt payments to a high-level official of the Qatari Air Force to secure air defense contracts through an alleged “sham subcontractor,” and failed to disclose these subcontractor payments as required by the Arms Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR). The SEC additionally alleged that over a longer period Raytheon paid more than $30 million to a Qatari-based agent, who was a relative of the Qatari Emir, under circumstances that presented elevated corruption risk.
To resolve the criminal FCPA, AECA, and ITAR allegations, Raytheon entered into a three-year deferred prosecution agreement and agreed to pay a $230.4 million criminal fine plus approximately $36.7 million in forfeiture, though up to $7.4 million of the forfeiture amount was credited against the SEC resolution. In the SEC matter, parent company RTX Corporation consented to a cease-and-desist proceeding alleging FCPA anti-bribery, books-and-records, and internal controls violations, and agreed to pay $49.1 million in disgorgement and prejudgment interest plus a civil penalty of $75 million, though $22.5 million of that penalty is offset against the criminal fine. And in a separate but coordinated matter, Raytheon resolved allegations of major fraud against the United States in a second deferred prosecution agreement and civil False Claims Act settlement alleging that the company provided inaccurate pricing data to the U.S. Department of Defense associated with foreign defense contracts. In total, and coupled with an earlier consent decree reached with the State Department, Raytheon and RTX agreed to pay nearly $1 billion to resolve the FCPA and non-FCPA charges, and also agreed to retain a compliance monitor jointly focused on anti-corruption and government contracts pricing compliance. But in contrast to the SEC resolution, parent RTX is not a defendant in either of the criminal resolutions and agreed only to adhere to the compliance- and disclosure-related obligations of its subsidiary Raytheon.
2. DOJ Further Defines the Poles in Corporate Enforcement Policy Credit
2024 marks the second year of FCPA resolutions since the January 2023 release of the DOJ Criminal Division’s updated Corporate Enforcement and Voluntary Self-Disclosure Policy (Corporate Enforcement Policy), first covered in our 2022 Year-End FCPA Update and further tracked in our 2023 Year-End FCPA Update. Under the current Corporate Enforcement Policy, DOJ may grant up to a 50% discount from the criminal fine for cooperation and remediation in a case that was not self-disclosed by the defendant company, and up to a 75% discount if the matter does qualify as a voluntary disclosure but nonetheless warrants criminal prosecution as opposed to a “declination with disgorgement.” These discount percentages are up from 25% and 50%, respectively, available under prior DOJ guidance. Further, the January 2023 Corporate Enforcement Policy provides enhanced guidance as to whether the cooperation and remediation discount is applied from the bottom of the U.S. Sentencing Guidelines range as was typical pre-Corporate Enforcement Policy, or a higher point-of-departure if the corporate defendant has a relevant history of “prior misconduct.”
In announcing the Corporate Enforcement Policy, DOJ made clear that the maximum-available discount is not the default, and that companies will start from zero and have to build the case for a discount based on their cooperation and remediation. The first two years of application have borne this out, as the “perfect score” of 50% / 75% remains elusive and the range of discounts in FCPA matters have varied from as low as 10% to as high as 45%. Moreover, the “other half” of the equation—whether the discount is taken from the bottom of the Guidelines range or from a higher point of departure—has varied significantly as well, with five companies receiving a discount from the bottom of the range and six companies receiving the discount from a higher point, ranging from the 5th to the 30th percentile.
Focusing on 2024, there were eight corporate criminal resolutions, outside of the “declination with disgorgement” with Boston Consulting Group described below. As shown in the below chart, the Corporate Enforcement Policy “discounts” ranged from 10% to 45% and the point of departure ranged from the bottom of the Guidelines range to the 30th percentile. The average “effective Corporate Enforcement Policy discount,” adjusting for both the discount percentage and point of departure, was 19%, resulting in an average effective savings of $23,262,861.
A table summarizing the Corporate Enforcement Policy discount details across the eight non-declination DOJ corporate FCPA resolutions of 2024 is below, followed by an analysis of four resolutions that illustrate the poles of cooperation and remediation credit offered by DOJ: AAR Corp. (45%) and SAP SE (40%) at the high-end, and Trafigura (10%) and BIT Mining (10%) at the low-end. We also analyze a fifth resolution that illustrates the impact of the point of departure, as Gunvor’s 25% cooperation and remediation discount was effectively reduced to 2.5% by virtue of the discount being taken from the 30th percentile of the Guidelines range.
Company |
Date |
Resolution Type |
Criminal Fine |
Discount % |
Guidelines Point of Departure |
Effective CEP Discount |
SAP SE |
01/10/24 |
DPA |
$118,800,000 |
40% |
10th percentile |
34% |
Gunvor S.A. |
03/01/24 |
Guilty Plea |
$374,560,071 |
25% |
30th percentile |
2.5% |
Trafigura Beheer B.V. |
03/29/24 |
Guilty Plea |
$80,488,040 |
10% |
5th percentile |
5.5% |
Raytheon Co. |
10/16/24 |
DPA |
$230,400,000 |
20% |
20th percentile |
4% |
Telefónica Venezolana C.A. |
11/08/24 |
DPA |
$85,260,000 |
20% |
5th percentile |
16% |
BIT Mining Ltd.* |
11/18/24 |
DPA |
$54,000,000 |
10% |
Bottom |
10% |
McKinsey & Co. Africa (Pty) Ltd |
12/05/24 |
DPA |
$122,850,000 |
35% |
5th percentile |
32% |
AAR CORP. |
12/19/24 |
NPA |
$26,393,029 |
45% |
Bottom |
45% |
* BIT Mining’s criminal fine was reduced to $10 million based on a demonstrated inability to pay the fine amount.
AAR CORP.
The highest cooperation and remediation discount of 2024, tied for the highest in the two-year history of the current Corporate Enforcement Policy, goes to Illinois-based aviation services company AAR. On December 19, 2024, DOJ and the SEC announced joint FCPA enforcement actions alleging that, between 2015 and 2020, AAR made nearly $8 million in payments to agents while knowing that a portion of those fees would be provided to government officials in Nepal and South Africa to obtain confidential bidding information, preferential payment terms, and otherwise to influence the contract award processes for state-owned airlines in each country.
To resolve the SEC charges, AAR consented to a cease-and-desist order finding that the company violated the FCPA’s anti-bribery, books-and-records, and internal controls provisions and agreed to pay $29.2 million in disgorgement plus prejudgment interest. No penalty was imposed due to the criminal resolution. To resolve DOJ’s allegations, AAR entered a non-prosecution agreement with an 18-month term and agreed to pay a $26.4 million criminal fine plus forfeiture, although the forfeiture amount was offset by the SEC’s disgorgement order. The criminal fine reflected a 45% Corporate Enforcement Policy discount taken from the bottom of the applicable Guidelines range, based on AAR’s cooperation, remediation, lack of criminal history, and, most notably as discussed below, the company’s self-reporting of the conduct in question.
AAR reported the alleged conduct in question to DOJ and the SEC promptly after becoming aware of press reports of a local corruption investigation concerning the Nepalese conduct and before being contacted by either agency. Still, DOJ did not credit the self-report as a “voluntary disclosure” for Corporate Enforcement Policy purposes because of the press reports and because, unbeknownst to AAR, “an independent source” already had reported the Nepalese conduct to the government. Thus, the report did not occur “prior to an imminent threat of disclosure or government investigation” as required by the Corporate Enforcement Policy and Section 8C2.5(g)(1) of the Sentencing Guidelines. Still, DOJ stated that it “gave significant weight” to the self-reporting in its determination of the form of resolution (i.e., non-prosecution agreement), cooperation and remediation credit awarded (i.e., 45%), and term of post-resolution reporting (i.e., 18 months). Notably, the only other 45% Corporate Enforcement Policy discount awarded by DOJ in an FCPA case to date likewise involves an “imperfect voluntary disclosure,” as covered in our discussion of the Albemarle case in our 2023 Year-End FCPA Update.
Separate from the company, two individuals were prosecuted in 2024 for their alleged involvement in the AAR corruption scheme. Related to Nepal, Deepak Sharma, a former executive of a U.S.-based AAR subsidiary, pleaded guilty on August 1, 2024 to a one-count information charging conspiracy to violate the FCPA’s anti-bribery provisions and also settled related SEC charges on December 19, 2024. Sharma agreed to disgorge nearly $131,000 in compensation allegedly tied to the corrupt conduct, plus nearly $54,000 in prejudgment interest thereon, in connection with the SEC resolution and sentencing in the criminal case has yet to be scheduled. Separately, a third-party agent of AAR’s allegedly involved in the South African corruption, Julian Aires, pleaded guilty to a one-count information charging conspiracy to violate the FCPA’s anti-bribery provisions on July 15, 2024, and like Sharma there is currently no sentencing date set.
SAP SE
The other high-flier in 2024 FCPA Corporate Enforcement Policy discounts was German software company and U.S. ADS issuer SAP, which on January 10, 2024 reached joint FCPA resolutions with DOJ and the SEC arising from an alleged bribery scheme covering multiple countries. According to the criminal charging documents, between 2013 and 2018, SAP made payments to agents in South Africa and Indonesia while knowing that portions of those payments would be passed on to officials associated with multiple different governmental bodies in each country, as well as knowingly falsified certain records relating to additional third-party payments in South Africa with no identified business purpose. The SEC charging document additionally alleges public corruption in Ghana, Kenya, Malawi, and Tanzania, as well as an improper gift provided to a government official in Azerbaijan in 2022.
To resolve the criminal matter, SAP entered into a deferred prosecution agreement alleging conspiracy to violate both the FCPA’s anti-bribery and books-and-records provisions and agreed to pay a $118.8 million criminal fine, though $55.1 million of the fine was offset by payments made in connection with coordinated anti-corruption resolution with South African authorities as discussed below. The criminal fine reflects (i) a 40% discount applied from (ii) the 10th percentile of the applicable Guidelines fine range to reflect SAP’s cooperation and remediation, as well as its prior criminal and regulatory history. Regarding the first point, DOJ praised SAP for its prompt and thorough cooperation, as well as remediation that included withholding compensation from certain potentially culpable employees and managers, which additionally netted SAP a $109,000 fine reduction pursuant to DOJ’s Compensation Incentives and Clawbacks Pilot Program. Regarding the second point, DOJ contended the enhanced Guidelines departure point was warranted based on SAP’s prior FCPA resolution with the SEC in 2016 covered in our 2016 Mid-Year FCPA Update, as well as an export controls-related non-prosecution agreement with DOJ’s National Security Division in 2021. To resolve the SEC matter, SAP consented to the entry of a cease-and-desist order alleging violations of the FCPA’s anti-bribery, books-and-records, and internal controls provisions and agreed to pay approximately $98.5 million in disgorgement plus prejudgment interest, with an offset of about $59.5 million against the civil resolution with South African authorities.
Trafigura Beheer B.V.
At the low-end of the Corporate Enforcement Policy discount scale, DOJ announced an FCPA resolution with Swiss commodities trader Trafigura on March 28, 2024. According to DOJ, between 2003 and 2014, Trafigura participated in a conspiracy to make nearly $20 million in corrupt payments to officials of Petróleo Brasileiro S.A. – Petrobras (Petrobras) to obtain contracts and improper business advantages from the Brazilian state-owned oil company. This resolution represents yet another in a long string of FCPA prosecutions arising from the long-running “Operation Car Wash” (Lava Jato) investigation in Brazil, which we have been following in these updates for years. Specific to Trafigura, we covered a guilty plea to money laundering conspiracy charges by former Petrobras oil trader Rodrigo Berkowitz, a recipient of the alleged bribes, in our 2020 Year-End FCPA Update.
To resolve the instant corporate criminal matter, Trafigura pleaded guilty to one count of conspiracy to violate the FCPA’s anti-bribery provisions and agreed to pay a total of approximately $127 million, consisting of an $80.5 million criminal fine and $46.5 million in forfeiture. The company will receive an offsetting credit for up to one-third of the criminal fine, or about $26.8 million, for amounts paid to Brazilian authorities to resolve allegations related to the same conduct. The criminal fine reflects a 10% discount from the 5th percentile of the Guidelines range, for an effective discount of 5.5%. The slightly enhanced point of departure was based on a 2006 guilty plea to false statements in connection with the importation of oil to the United States and a 2010 conviction in the Netherlands relating to export and environmental law violations in Côte d’Ivoire. The relatively low 10% cooperation credit appears to be based on DOJ’s assertions that early in the investigation Trafigura “failed to preserve and produce certain documents and evidence in a timely manner,” and then later “was slow to exercise disciplinary and remedial measures” and took positions in resolution negotiations that “caused significant delays and required [DOJ] to expend substantial efforts and resources to develop additional admissible evidence.” Notably, Trafigura changed counsel during resolution negotiations.
Trafigura also was convicted of charges arising from a separate alleged corruption scheme in Angola following a criminal trial in Switzerland as described in our international section below.
BIT Mining Ltd.
The other low-end, 10% cooperation and remediation score awarded in 2024 comes from a joint DOJ / SEC FCPA resolution with Chinese cryptocurrency mining firm BIT Mining, announced on November 18. According to the charging documents, during a prior incarnation when it was known as 500.com and focused on the gaming industry, the company made between $2 and $2.5 million in corrupt payments to Japanese parliamentary members in an ultimately-unsuccessful effort to open an integrated resort with gambling and other entertainment options in Japan. Separately, on the same day DOJ unsealed an indictment charging the company’s former CEO, Zhengming Pan, with FCPA bribery and books-and-records violations associated with the conduct.
To resolve the corporate criminal charges, BIT Mining entered into a three-year deferred prosecution agreement with DOJ and agreed to pay a $10 million criminal fine, which was substantially reduced from the Guidelines-calculated fine of $54 million based on the company’s demonstrated inability to pay. Although less relevant given the inability-to-pay reduction, the $54 million calculation included only a 10% cooperation and remediation discount, with DOJ stating that although BIT Mining engaged in some cooperation and remediation, it was “reactive and limited in degree and impact.” To resolve the SEC’s parallel investigation, the company consented to the issuance of a cease-and-desist order alleging violations of the FCPA’s anti-bribery, books-and-records, and internal controls provisions and assessing a $4 million civil penalty. DOJ agreed to credit the SEC civil penalty against the $10 million criminal fine, such that BIT Mining will only pay $10 million in total.
For his part, Pan has not appeared before the Court to answer the indictment and may be in China.
Gunvor S.A.
The largest FCPA resolution of 2024 was announced by DOJ on March 1, 2024, with Swiss commodities trader Gunvor. According to DOJ, between 2012 and 2020, Gunvor representatives authorized nearly $100 million in corrupt payments through third-party agents for the benefit of high-ranking officials of Ecuadorian state-owned oil company Petroecuador in exchange for lucrative sole-source oil contracts. The corporate resolution followed guilty pleas to FCPA and FCPA-related charges entered by former Petroecuador official Nilsen Arias Sandoval, former Gunvor consultants Antonio Pere Ycaza and Enrique Pere Ycaza, and former Gunvor employee Raymond Kohut, as discussed in our 2021 and 2022 Year-End FCPA Updates.
To resolve the corporate matter, Gunvor agreed to plead guilty to one count of conspiracy to violate the FCPA’s anti-bribery provisions and to pay a criminal fine of more than $374.5 million plus forfeiture of more than $287.1 million. The $661 million resolution amount is not entirely for DOJ, however, as up to one quarter of the criminal fine (about $93.6 million) may be credited against related anti-corruption resolutions with each of Swiss and Ecuadorian authorities, for a total offset of up to $187.3 million, provided these payments are made within a year of the DOJ resolution. The criminal fine reflects a 25% discount for cooperation and remediation, but that discount was applied from the 30th percentile of the Guidelines range based on Gunvor’s “history of misconduct,” thus reducing the “effective discount” to 2.5%. Gunvor’s “prior misconduct” included an international corruption-related resolution with Swiss authorities concerning a scheme to bribe officials in the Republic of Congo and Cote d’Ivoire (discussed in our 2019 Year-End FCPA Update). This is illustrative of a developing trend where corporations’ prior non-U.S. legal resolutions are negatively impacting DOJ’s Sentencing Guidelines calculations. Gunvor’s is the highest Guidelines point-of-departure imposed in an FCPA matter since publication of the updated Corporate Enforcement Policy in January 2023, although not nearly as high as the 75th percentile applied against ABB in its third FCPA resolution discussed in our 2022 Year-End FCPA Update.
3. DOJ FCPA “Declinations with Disgorgement” Continue as a Trickle
In April 2016, DOJ rolled out an “FCPA Pilot Program” (the FCPA-specific predecessor to the current, Criminal Division-wide Corporate Enforcement Program) that provided significantly greater transparency regarding the Division’s expectations for voluntary self-disclosures, cooperation, and remediation in FCPA investigations to receive mitigation credit. Under these programs, a company that timely and voluntarily self-discloses FCPA-related misconduct before DOJ becomes aware of it, fully cooperates in the ensuing investigation, and appropriately remediates the misconduct may be eligible for a declination of criminal prosecution. However, a condition of such a “declination” is that the company disgorge illicit profits from the misconduct and admit to a public recitation of facts, leading us to coin the term “declination with disgorgement” to distinguish these from “true declinations” where the company persuades DOJ to take no enforcement action.
DOJ came out of the gate strong with five “declinations with disgorgement” in the first year of the then-FCPA Pilot Program, as discussed in our 2016 Year-End FCPA Update. But over the years, this favorable prosecutorial resolution tool has been deployed rather infrequently, which is all the more notable considering that DOJ has rejected several candidates that did voluntarily self-disclose FCPA-related conduct because the company reportedly (i) did not specify the conduct in sufficient detail during the initial disclosure call (ABB, discussed in our 2022 Year-End FCPA Update), (ii) delayed the self-report such that it was no longer “prompt” (Albemarle, discussed in our 2023 Year-End FCPA Update), or (iii) disclosed the conduct only after DOJ was already aware of it through other means (AAR, discussed above). In the first nine years of these DOJ disclosure programs, there have been only 19 “declinations with disgorgement” issued in FCPA matters as set forth in the below bar chart, as well as two in the past two years by the Fraud Section on charges unrelated to the FCPA.
The only FCPA-related “declination with disgorgement” of 2024 was reached with global consulting firm Boston Consulting Group, Inc. on August 27, 2024. According to the letter agreement, between 2011 and 2017, BCG paid approximately $4.3 million in commissions to a consultant to help the firm obtain contracts with two agencies of the Angolan government, allegedly while knowing that portions of those commissions would be used to improperly influence officials of these government agencies. BCG was required to disgorge $14.4 million in profits from the relevant contracts, but due to its prompt voluntary disclosure, cooperation in the ensuing investigation, and effective remediation (including clawing back equity and withholding bonuses and other compensation from culpable partners), the company was not criminally prosecuted.
4. Rounding Out the SEC FCPA Enforcement Docket
We always caution against overreliance on one-year statistical snapshots, as the ebbs and flows of FCPA enforcement are better measured across an arc of years rather than any arbitrarily defined 365-day period. Nonetheless, it is notable that when the SEC released its Enforcement Results for FY 2024, they showed the lowest number of FCPA enforcement matters in recent history: two. Those figures reflect the SEC’s fiscal year (October 1, 2023 to September 30, 2024), and thus differ from our calendar-year reporting, and already the SEC has brought three times as many actions (six) in the first quarter of their FY 2025 (still calendar year 2024 for us). Nonetheless, the pace of SEC FCPA enforcement is something to monitor, especially as the Agency resets its enforcement priorities with the new Administration.
In addition to the eight FCPA and FCPA-related enforcement actions brought by the SEC in conjunction with DOJ as reported elsewhere in this update, the SEC brought two SEC-only FCPA enforcement actions in 2024: Deere & Company and Moog Inc.
Deere & Company
On September 10, 2024, the SEC announced a settled FCPA enforcement action with Illinois-based agricultural equipment manufacturer Deere & Company, which may be more familiar to our readership by its trade name “John Deere.” According to the SEC, between 2017 and 2020, representatives of Deere’s then-newly acquired Thai subsidiary authorized corrupt payments to government officials in the Royal Thai Air Force and various agencies within the Ministry of Transport to secure government contracts. The SEC further alleged improper payments to representatives of a private customer in Thailand, charged as part of the FCPA enforcement action based on their purportedly inaccurate recording in Deere’s books and records. And in addition to corrupt payments, the SEC included allegations of inappropriately extravagant international trips disguised as “factory visits,” long a favorite theory of the SEC’s in FCPA enforcement actions.
Without admitting or denying the SEC’s allegations of books-and-records and internal controls violations, Deere consented to issuance of a cease-and-desist order and agreed to pay a $4.5 million civil penalty, plus approximately $5.4 million in disgorgement and prejudgment interest. The SEC noted the company’s significant cooperation and remediation efforts in response to the investigation. The SEC did cite Deere’s alleged failure to timely integrate the Thai subsidiary into the company’s then-existing compliance and controls environment after acquiring the subsidiary in 2017 as a major factor that allowed the scheme to go unchecked for several years, thus highlighting the compliance risks associated with integrating foreign companies into a U.S. issuer’s compliance program post-acquisition.
Moog Inc.
On October 11, 2024, the SEC announced a settled FCPA enforcement action with New York-based motion control systems manufacturer Moog. The SEC alleged that, between 2020 and 2022, representatives of one of the company’s Indian subsidiaries made payments to employees of government entities to influence them to exclude competitors from or otherwise skew competitive tenders in Moog’s favor.
Without admitting or denying the SEC’s allegations of books-and-records and internal controls violations, Moog consented to the issuance of a cease-and-desist order and agreed to pay disgorgement and prejudgment interest totaling nearly $600,000, plus a civil penalty of $1.1 million. The SEC’s order noted the company’s cooperation and remediation efforts in response to the investigation, which included voluntarily disclosing the misconduct. Gibson Dunn was co-counsel representing Moog in this matter.
5. Individual FCPA Enforcement Actions Come in Bunches
Individual accountability has long been a focus of senior leadership at both DOJ and the SEC, with respect to the FCPA and enforcement more broadly. DOJ has for years made good on this refrain, bringing far more FCPA and FCPA-related prosecutions against individuals than corporations in recent years. This trend was no different in 2024, with 70% (21 of 30) of FCPA or related enforcement actions brought by DOJ filed against individuals. By contrast, entering 2024 the SEC had not brought a single FCPA or related enforcement action against an individual in more than three years. But this year the SEC stepped up individual enforcement and brought four such actions. Across both agencies, another takeaway from 2024 FCPA enforcement is that the individual prosecutions tended to come in groups.
Adani Group Eight
The most prominent and prolific example of DOJ and SEC individual FCPA enforcement from 2024 came on November 20, 2024, when the dual enforcers announced parallel charges arising from an alleged $250 million bribery scheme involving one of the world’s largest solar energy projects and one of the world’s richest men. The defendants include Indian billionaire Gautam Adani, his nephew Sagar Adani, and Vneet Jaain, all executives at Indian renewable energy company Adani Green Energy, as well as Ranjit Gupta and Rupesh Agarwal, former executives of U.S. issuer Azure Power, and Cyril Cabanes, Saurabh Agarwal, and Deepak Malhotra, former employees of Canadian pension fund CDPQ (as well as in Cabanes’s case, a former board member of Azure Power). According to the charging documents, the defendants initiated a scheme in 2021 to allegedly pay $265 million in bribes to officials of the Solar Energy Corporation of India to cause local Indian municipalities to purchase power from a multi-billion dollar, 12 GW solar energy project operated by the defendants’ companies. DOJ and the SEC further allege that certain of the defendants obstructed justice by lying to investigators and destroying documents, as well as made false statements to U.S. investors in connection with capital raising efforts occurring after news of the investigation became public.
Gautam Adani, Sagar Adani, and Jaain are charged criminally with securities fraud and obstruction of justice, and the two Adanis are also charged by the SEC with civil securities fraud. Gupta and Rupesh Agarwal, Saurabh Agarwal, Cabanes, and Malhotra are all charged with conspiracy to violate the FCPA’s anti-bribery provisions, and all but Gupta are charged with obstruction of justice. Finally, the SEC charged Cabanes with FCPA bribery, in the first SEC FCPA enforcement action against an individual since 2020. None of the defendants are yet before the Eastern District of New York, where the criminal and civil charges have been filed, though the case has created a political storm as to whether India will agree to extradite these prominent businessmen. Given that the post-election indictment has now been followed by a change in DOJ administrations, it is possible that there will be political considerations on the U.S. side as well.
Smartmatic Four
On August 8, 2024, a grand jury in the Southern District of Florida returned an indictment charging three executives of election voting machine company Smartmatic—Roger Alejandro Pinate Martinez, Jorge Miguel Vasquez, and Elie Moreno—and former Chairman of the Commission on Elections of the Republic of the Philippines (COMELEC), Juan Andres Donato Bautista, for their role in an alleged corruption scheme involving the sale of voting machines used in the 2016 Philippine elections. According to the indictment, between 2015 and 2018, Pinate and Vasquez (with the assistance of Moreno) allegedly paid approximately $1 million in bribes to Donato from 2015 to 2018, who caused COMELEC to purchase voting machines from Smartmatic at inflated prices.
Pinate and Vasquez are each charged with FCPA bribery, and all four defendants are charged with money laundering. Pinate and Donato are before the court and presently facing an October 2025 trial date. Vasquez and Moreno have yet to enter an appearance, and DOJ is reportedly seeking their extradition.
Stericycle Two
In our 2022 Mid-Year FCPA Update, we covered a joint DOJ / SEC FCPA resolution with Illinois waste management company Stericycle, Inc. In 2024, two former Stericycle employees were charged arising out of the same alleged scheme to pay more than $10 million in bribes to government officials in Argentina, Brazil, and Mexico between 2011 and 2016. On February 9, 2024, Stericycle’s former Latin American Division Senior Vice President Mauricio Gomez Baez agreed to plead guilty to one count of conspiracy to violate the FCPA’s anti-bribery provisions. Six weeks later, on March 19, a grand jury sitting in the Southern District of Florida returned an indictment charging former Latin American Division Finance Director Abraham Cigarroa Cervantes with one count of conspiracy to violate the FCPA’s anti-bribery provisions and one count of conspiracy to violate the FCPA’s internal controls and books-and-records provisions.
Gomez was promptly sentenced to seven months in prison, at a June 21, 2024 sentencing hearing. Cigarroa has yet to appear before the court.
Single-Defendant Additions to Prior-Year Groupings
We frequently make the point that the full scope of FCPA enforcement is difficult to decipher, given that charges often remain under seal for years as defendants continue to cooperate or DOJ awaits their transit into the United States or an extradition-friendly nation. The former appears to have been the case when, on December 30, 2024, the U.S. District Court for the Southern District of Florida unsealed a criminal proceeding initiated by DOJ in October 2023 against Juan Ramon Molina Rodriguez, the former Titular Director of a Honduran governmental entity known as “TASA” that procured goods for, among other Honduran government entities, the National Police. On July 10, 2024, Molina pleaded guilty to a single-count criminal information charging him with conspiracy to commit money laundering, which alleges that, between 2015 and 2019, he and fellow TASA official Francisco Roberto Cosenza Centeno were corruptly influenced in the award of more than $10 million in TASA contracts by payments received from Carl A. Zaglin, Bryan Berkman, and Luis Berkman, executives of a Georgia-based manufacturer of law enforcement uniforms and equipment, made through companies owned by Florida resident Aldo N. Marchena. As reported in our 2021 and 2023 FCPA Year-End Updates, Zaglin, the Berkmans, Cosenza, and Marchena, as well as others involved in the alleged Honduran corruption scheme, have previously been charged with FCPA and FCPA-related money laundering offenses.
Molina’s sentencing is currently set for February 2025. Of the remaining defendants listed above, Bryan and Luis Berkman have each pleaded guilty and been sentenced, initially to 28 months and 38 months, respectively, although both had their sentences reduced to 14 and 29 months, respectively, based on substantial assistance in the ongoing DOJ investigations. Zaglin, Cosenza, and Marchena all are currently set for trial in the Southern District of Florida in April 2025.
On November 12, 2024, Miami-based investment advisor John Christopher Polit pleaded guilty to a one-count information charging him with conspiracy to commit money laundering. If that name sounds familiar, it is because he is the son of former Ecuadorian Comptroller General Carlos Ramon Polit Faggioni, whose indictment arising out of the Odebrecht bribery scandal was covered in our 2022 Mid-Year FCPA Update, and whose 2024 trial conviction is discussed in the following section. Polit the son admitted that, between 2010 and 2018, he laundered more than $16.5 million of his father’s bribery proceeds, causing them to “disappear” (though apparently unsuccessfully) through layered transactions beginning in Panama and continuing through Florida.
The younger Polit is currently scheduled to be sentenced before the Southern District of Florida in April 2025. Notably, he was convicted of related charges in Ecuador in 2018, but that conviction was subsequently reversed in 2021.
Finally, in another blast from the FCPA past, on October 23, 2024, a federal grand jury in the Southern District of Florida indicted Venezuelan television news network owner Raul Gorrin Belisario on money laundering charges—again. Our readers may recall that Gorrin was indicted in November 2018, along with numerous other defendants, on FCPA and money laundering associated with an alleged scheme to bribe two successive National Treasurers of Venezuela to obtain currency exchanges at favorable rates, as discussed in our 2018 Year-End FCPA Update and with the latest coverage in our 2022 Year-End FCPA Update. The 2024 indictment alleges a separate money laundering conspiracy associated with Venezuela’s state-owned energy company, Petróleos de Venezuela S.A. (PDVSA), but still involving currency exchange transactions and also involving numerous other defendants discussed in our FCPA updates dating back to 2018.
Even after the second indictment, Gorrin remains a fugitive, reportedly living in Venezuela.
As these individual enforcement actions reflect, Central and Latin America remain fertile grounds for international anti-corruption prosecutions. Of the 21 individual FCPA and FCPA-related prosecutions in 2024, 9 of the individual defendants were from or have ties to this region.
6. Not Quite “FCPA-Related,” But Still Worthy of Mention
Periodically, we break down the fourth wall and let our readers into the debates amongst our editorial team as to what qualifies as an FCPA / FCPA-related enforcement action. Given the breadth of the FCPA’s accounting provisions, which can and often do reach non-corruption-related conduct (particularly in SEC enforcement), as well as the panoply of non-FCPA, ancillary statutes that may be used to charge international corruption (particularly in DOJ enforcement), we wrestle each year with “shades of gray.”
One recurring source of controversy concerns international corruption prosecutions initiated without the clear involvement of DOJ’s FCPA Unit. Section 9-47.110 of DOJ’s Justice Manual provides that all FCPA (now including FEPA too) prosecutions require coordination with the Fraud Section of the Criminal Division, which houses DOJ’s FCPA Unit. Even investigations that could lead to FCPA charges are supposed to be coordinated with the FCPA Unit, though with 94 U.S. Attorneys’ Offices and numerous other components of Main Justice whose authority includes, for example, international money laundering and wire fraud charges, this requirement can be difficult to police. We are also familiar with examples of prosecutions coordinated with DOJ’s FCPA Unit in the background that, for a variety of reasons, never see an FCPA Unit attorney enter an appearance on the public docket.
Balancing all of these considerations, our statistical methodology is only to count non-FCPA charges related to international corruption as “FCPA-related” if there is public involvement by the FCPA Unit. Two international corruption cases from 2024 that we do not count in our statistics, but note to illustrate the point, follow.
On January 11, 2024, a grand jury sitting in the Central District of California returned an indictment charging Paulinus Iheanacho Okoronkwo, a Los Angeles-based attorney and dual U.S.-Nigerian citizen, with money laundering, tax evasion, and obstruction of justice. The underlying conduct alleged centers on a $2.1 million bribe Okoronkwo purportedly received while serving as an officer of Nigeria’s state-owned oil company, the Nigerian National Petroleum Corporation, to secure favorable drilling rights for Addax Petroleum, a Swiss-based subsidiary of China’s state-owned oil company Sinopec. Although this may walk, talk, and quack like an FCPA-related case, it is being prosecuted by the L.A. U.S. Attorney’s Office. Okoronkwo’s trial is currently scheduled to begin in April 2025.
On March 4, 2024, the U.S. Attorney’s Office for the Southern District of Florida announced a guilty plea by another former foreign official, this time former Venezuela National Guard Major Nepmar Jesus Escalona Enriquez. Escalona pleaded guilty to one count of money laundering conspiracy arising from allegations that, between 2010 and 2017, he falsified customs documents to deceive the Central Bank of Venezuela into releasing $1.7 million to the co-conspirators rather than going to finance food imports, and also paid bribes to other Venezuelan government officials to prevent detection of the scheme. Again, this is typically fodder for FCPA prosecutors, but in this instance was handled by the Miami U.S. Attorney’s Office and the Criminal Division’s Money Laundering and Asset Recovery Section. On May 23, 2024, Escalona was sentenced to one year and one day in prison as well as forfeiture of more than $840,000.
7. DOJ’s FCPA Unit Runs the Table, Going Four-for-Four at Trial
There was a time not so long ago when FCPA-related trials were a rarity. But as we have noted before, within roughly the last decade DOJ has enhanced its focus on individual prosecutions in international corruption. Individuals as a group are far more likely than corporations to take criminal charges to a jury of 12, thus leading over time to more FCPA-related trials in criminal matters. (The SEC still has yet to try an FCPA case in the more than 40 years the statute has been on the books, though Gibson Dunn client James J. Ruehlen and co-defendant Mark A. Jackson came within a week of trial before receiving no-admit, no-deny, injunction-only resolutions, as covered in our 2014 Mid-Year FCPA Update.)
2024 saw four FCPA-related trials, equaling the record set five years ago as we covered in our 2019 Year-End FCPA Update. DOJ FCPA Unit prosecutors, teaming up with colleagues from several U.S. Attorneys’ Offices, ran the table and obtained convictions in all four.
Oil Trader Javier Alejandro Aguilar Morales Convicted of Petroecuador and PEMEX-Related Corruption
We have been covering the criminal case against former Vitol Group oil trader Javier Alejandro Aguilar Morales since our 2020 Year-End FCPA Update. Aguilar was charged with FCPA bribery and money laundering-related offenses arising out of the payment of more than $1 million in alleged corrupt payments to officials of the state-owned oil companies of Ecuador and Mexico, Petroecuador and PEMEX.
On February 23, 2024, after an eight-week trial in the Eastern District of New York, the jury returned a unanimous verdict of guilty on all three counts. Aguilar subsequently moved for a judgment of acquittal and a new trial, but the Honorable Eric N. Vitaliano rejected that bid in a 32-page ruling issued on July 26, 2024. In addition to turning away various evidentiary arguments, including that the evidence of Aguilar’s knowledge of the corruption was more than sufficient to support a guilty verdict even though no one testified to using the word “bribe” with him, the Court addressed several issues of FCPA interest. First, although Judge Vitaliano found in a mid-trial ruling that two of the alleged “foreign official” bribe recipients—who worked for a U.S. procurement subsidiary of PEMEX—would not qualify as “public servants” under Mexican law, he nonetheless found that the jury could find as a mixed matter of law and fact that they were officials of an “instrumentality” of a foreign government for purpose of the FCPA. Second, and relatedly, Judge Vitaliano affirmed his prior ruling that Aguilar did not create a “lawful under foreign law” affirmative defense worthy of submission to the jury based on the argument that the PEMEX-affiliated officials were not “public servants” covered by Mexico’s anti-corruption law, because arguing that one specific Mexican law was not violated is not sufficient to establish that the payments were lawful in Mexico.
On August 21, 2024, Aguilar pleaded guilty to related, parallel FCPA charges arising from the PEMEX scheme that, as discussed in our 2023 Year-End FCPA Update, were severed and moved to the Southern District of Texas after Aguilar raised venue objections. After the trial conviction, Aguilar consented to have the case transferred back to Brooklyn and consolidated for sentencing before Judge Vitaliano. In announcing the Aguilar trial verdict, DOJ trumpeted the success of its wide-ranging investigation of corruption in the Latin American oil trading industry, which just pulling on this strand resulted in a deferred prosecution agreement with Vitol, plus the guilty pleas of seven individual co-conspirators in addition to Aguilar.
Former Ecuadorian Comptroller Carlos Ramon Polit Faggioni Convicted of Receiving Odebrecht-Related Bribes
We have been covering an ongoing stream of FCPA-related prosecutions arising from the blockbuster resolution with Brazilian construction conglomerate Odebrecht S.A. since our 2016 Year-End FCPA Update. This includes the 2022 indictment of former Ecuadorian Comptroller General Carlos Ramon Polit Faggioni on allegations that he received more than $10 million in bribes from Odebrecht and then laundered them through the U.S. financial system with the assistance of his son, John Christopher Polit, whose 2024 guilty plea is discussed above.
On April 23, 2024, following a two-week trial in the U.S. District Court for the Southern District of Florida, a jury found the senior Polit guilty of all six counts of money laundering. On October 1, 2024, he was sentenced to 10 years in prison and ordered to forfeit $16.5 million in proceeds. Polit has noted an appeal to the Eleventh Circuit Court of Appeals.
Former Mozambican Finance Minister Manuel Chang Convicted in “Tuna Bonds” Scandal
On August 8, 2024, after a four-week trial, a federal jury in the Eastern District of New York found Mozambique’s former Minister of Finance, Manuel Chang, guilty of FCPA-related wire fraud and money-laundering conspiracy charges. As we covered in prior updates, most recently in our 2023 Year-End FCPA Update, Chang was indicted in 2018 for allegedly receiving $7 million in bribes in exchange for guaranteeing on behalf of the Mozambican government that it was financially solvent, which induced banks to issue loans to state-owned companies for maritime projects that ultimately failed and resulted in significant losses. Chang was promptly arrested in South Africa, but underwent years of extradition litigation before he was finally extradited to the United States in July 2023.
The Honorable Nicholas G. Garaufis denied Chang’s post-trial motions for judgment of acquittal and new trial in a 45-page memorandum opinion issued on November 13, 2024. With respect to wire fraud, the Court found that DOJ proved a viable scheme to deprive the investors of money siphoned off from the loan proceeds through undisclosed kickbacks and false representations, including that there was no corruption involved in the deal, and that it was not just a scheme to deprive victims of “valuable economic information” such that it would be susceptible to challenge under the Supreme Court’s decision in Ciminelli v. United States, 598 U.S. 306 (2023). With respect to money laundering, Judge Garaufis found that the evidence presented to the jury concerning the circuitous payment flow through accounts not in Chang’s name was sufficient to support concealment, and the specified unlawful activities of wire fraud and bribery under Mozambican law. On January 17, 2025, the Court sentenced Chang to 102 months in prison and ordered Chang to forfeit $7 million.
Oil Trader Glenn Oztemel Convicted of Petrobras-Related Corruption
We reported in our 2023 Year-End FCPA Update on criminal charges against Freepoint Commodities trader Glenn Oztemel, his brother and fellow oil trader Gary Oztemel, and third-party agent Eduardo Innecco, all associated with an alleged corruption scheme relating to Brazilian state-owned oil company Petrobras. Glenn Oztemel proceeded promptly to trial and, on September 26, 2024, a federal jury in the District of Connecticut found him guilty on all seven counts of FCPA bribery and money laundering.
In June 2024, Gary Oztemel pleaded guilty to one count of money laundering arising from the alleged scheme and was sentenced to two years of probation (due, in part, to medical considerations), 100 hours of community service, and $310,000 in fines and forfeiture. Innecco has reportedly been arrested in France but is fighting extradition and is not yet before the Court.
2024 FCPA-RELATED ENFORCEMENT LITIGATION
As our readership knows, following the filing of FCPA or FCPA-related charges, criminal and civil enforcement proceedings can take years to wind their way through the courts. The substantial number of enforcement cases from prior years has led to an active year in enforcement litigation beyond the cases initiated in 2024 and trials covered above. We discuss below a selection of prior-year matters, beyond the four trials, that saw material enforcement litigation developments.
DOJ Voluntarily Dismisses FCPA-Related Prosecution of Maryland Attorney Jeremy Schulman
On August 30, 2024, the U.S. District Court for the District of Maryland granted DOJ’s request to dismiss with prejudice an 11-count indictment against Maryland attorney Jeremy Schulman. As we first reported in our 2020 Year-End FCPA Update, Schulman was charged with wire fraud, mail fraud, and money laundering offenses associated with his efforts to gain access to over $12.5 million in assets belonging to the Central Bank of Somalia that had been frozen in U.S. banks following the turmoil arising from the country’s civil war in 1991. DOJ alleged that Schulman, working with former Somali Central Bank Governor Ali Abdi Amalow, presented fraudulent banking documents to financial institutions that showed Schulman had the authority to recover the frozen assets on behalf of the Somali government, whereas Schulman maintained that he was acting with actual authorization from the Somali government.
Years of protracted and contentious litigation followed, with Schulman diligently pursuing access to exculpatory evidence. This tenacity paid off, when the Honorable Paula Xinis imposed evidentiary sanctions for DOJ’s handling of its main witness. This then set the stage for DOJ’s motion to dismiss the case, citing its “assessment of pre-trial evidentiary rulings.” The Schulman case clearly reflects dogged determination and superb advocacy on the part of defense counsel.
Cognizant Defendants’ Trial Continued for Foreign Witness Issues (Again)
We have long been reporting on the 2019 FCPA charges against former Cognizant Technology Solutions President Gordon Coburn and Chief Legal Officer Steven Schwartz, including most recently in our 2023 Year-End FCPA Update. The trial date has shifted numerous times due to evidentiary disputes, reassignment of the case following the retirement of the presiding judge, and foreign witness availability issues. It was scheduled to go to trial in the District of New Jersey in September 2024, but was delayed again based on the pace of the Indian government’s response to a Mutual Legal Assistance Treaty request for witness testimony sought by the defense. The current, and ninth, trial date is scheduled for March 3, 2025. This case has long been a treasure trove of pretrial motions practice, and we expect that the trial will similarly showcase many legal arguments pertinent to FCPA and white-collar practice generally.
Former Banker Asante Kwaku Berko Extradited to Stand Trial on 2020 Indictment
As we last covered in our 2022 Year-End FCPA Update, dual U.S. and Ghanian citizen and banker Asante Kwaku Berko was arrested in November 2022 at the request of U.S. authorities as he landed at Heathrow Airport and DOJ unsealed a six-count indictment from 2020 charging Berko with FCPA, money laundering, and failure to report a foreign bank account. The substantive allegations are that, between December 2014 and March 2017, Berko paid more than $700,000 to Ghanaian government officials to assist a Turkish energy company client of Berko’s secure approvals to build an electric power plant in Ghana. Years of extradition litigation ensued.
On June 7, 2024, the Hight Court of England and Wales agreed with Berko that there was no “duality” (i.e., analogous UK crime) for the bank account reporting offense, but allowed the extradition to go forward as to the FCPA and money laundering charges. The UK court rejected Berko’s argument that the United States lacked jurisdiction over the international corruption scheme.
Shortly thereafter, in July 2024, Berko was extradited to the Eastern District of New York and pleaded not guilty to the FCPA and money laundering offenses. No trial date has yet been set.
Select Post-Indictment Guilty Pleas
It is a fact of the U.S. litigation process that the vast majority of criminal cases resolve prior to trial, even as to those who push their case to indictment in the first instance. But even within this paradigm, the case of former Maxwell Technologies General Manager Alain Riedo stands out.
More than a decade ago, and as we discussed in our 2013 Year-End FCPA Update, Riedo was indicted on nine counts of violating the FCPA associated with his alleged participation in a scheme to make corrupt payments to employees of state-owned companies in China. But as a Swiss citizen residing in Switzerland, Riedo was never extradited to face the charges. For years the case was dormant, until March 7, 2024 when Riedo appeared in the U.S. District Court for the Southern District of California to plead guilty to a superseding information charging one count of violating the FCPA’s books-and-records provision. The court sentenced Riedo to two years of probation, with 300 hours of community service to be served in Switzerland, and imposed a $55,000 fine.
Although Riedo’s reasoning for answering the FCPA charges 11 years later is not stated on the record, it is generally true that outstanding arrest warrants and the accompanying Interpol “Red Notices” can be extremely limiting as to a defendant’s ability to travel internationally. Some defendants have been known to resolve outstanding criminal cases simply to be able to visit family members in the United States or other countries with extradition treaties.
Another 2024 post-indictment guilty plea worthy of mention is that of Paulo Jorge Da Costa Casqueiro Murta. As we last checked in our 2023 Year-End FCPA Update, this PDVSA corruption-related case has bounced back and forth between Judge Hoyt’s chambers in Houston and the Fifth Circuit several times since Casqueiro Murta was extradited in 2021, with the latest development heading into 2024 being a remand to the district court for an evidentiary hearing on a Speedy Trial Act violation before a different trial court judge.
But that evidentiary hearing never occurred, as the parties informed the Court that they had reached a resolution and, on May 21, 2024, Casqueiro Murta pleaded guilty to a superseding information charging one count of FCPA conspiracy. He was sentenced by the Honorable Gray Miller to time served—amounting to nine months in custody and four months in home confinement—an additional one year of supervised release, and a $105,000 fine.
2024 KLEPTOCRACY FORFEITURE ACTIONS
As we periodically report in these updates, the Money Laundering and Asset Recovery Section (MLARS) of DOJ’s Criminal Division has a Kleptocracy Asset Recovery Initiative that uses civil forfeiture actions to freeze, recover, and in some cases repatriate the proceeds of foreign corruption. 2024 was an active year for MLARS kleptocracy actions, including the following:
- Over the course of 2024, DOJ continued to file additional civil forfeiture actions seeking the seizure of proceeds from the 1Malaysia Development Berhad (1MDB) corruption scandal we have been covering for years. These latest actions, which resolved claims against the assets of fugitive Low Taek Jho (Jho Low) and 1MDB’s former general counsel, “Jasmine” Loo Ai Swan, totaled a collective value of more than $200 million. To date, the U.S. government has reportedly seized and repatriated to Malaysia over $1.4 billion in assets associated with the scheme. As impressive as that figure is, the total alleged losses associated with the scheme exceed $4.5 billion.
- On January 9, 2024, DOJ reached a civil forfeiture agreement with Olympia De Castro, ex-wife of Gustavo Adolfo Hernandez Frieri, who pleaded guilty in 2019 to participating in the PDVSA-related “Operation Money Flight” currency conversion exchange scheme, described in our 2018 Year-End FCPA Update. Hernandez was ordered to forfeit $12.3 million as part of his plea agreement, which DOJ sought through his properties. De Castro filed ownership claims over certain properties, leading to years of negotiations with DOJ that were finally resolved with a $2.95 million settlement allowing De Castro to keep one of the properties and consenting for forfeiture of the remaining properties.
- On March 29, 2024, DOJ filed a civil complaint in the U.S. District Court for the Southern District of New York seeking to seize a $7.1 million condominium in Manhattan’s Trump International Hotel and Tower, alleging that the apartment was purchased with funds embezzled by sitting Republic of the Congo President Denis Sassou Nguesso. On May 14, Ecree LLC, a company managed by António José de Silva Veiga (reportedly a “fixer” for President Nguesso), filed a claim of interest to the apartment, and he subsequently moved to dismiss the complaint on grounds that DOJ failed to trace the apartment’s purchase to Nguesso or any illegal scheme. As of this writing, the motion to dismiss has been fully briefed, and a decision remains pending.
- On July 8, 2024, DOJ announced a settled civil forfeiture action involving a Los Angeles mansion allegedly purchased using the proceeds of a corruption scheme involving former Armenian Finance Minister Gagik Khachatryan. According to a 2022 complaint filed in the U.S. District Court for the Central District of California, the home was purchased in 2011 by a trust benefiting Khachatryan’s sons using the funds of Sedrak Arustamyan, a prominent Armenian businessman who allegedly paid Khachatryan more than $20 million in bribes in exchange for favorable tax treatment for Arustamyan’s company. Pursuant to the settlement agreement, the mansion will be forfeited to the United States, which will then sell the property and retain 85% of the net proceeds, delivering the remainder to Khachatryan’s sons. In addition to the U.S. forfeiture action, the alleged bribe payments are the subject of a pending criminal action in Armenia, as we discuss below.
- In our 2021 Year-End FCPA Update, we covered the indictment of Nouracham Bechir Niam and three other defendants, including Niam’s husband former Chadian Ambassador to the United States and Canada Mahamoud Adam Bechir, on FCPA and related charges stemming from an alleged bribery scheme related to the award of oil rights in the Republic of Chad. Separate from the criminal case, in 2015 DOJ moved to seize £22 million (~ $34.6 million) in funds allegedly linked to the scheme, and Niam filed a claim of interest. The forfeiture case was stayed in 2016, pending the criminal investigation leading to the indictment. But in October 2023, the Honorable Richard J. Leon of the U.S. District Court for the District of Columbia lifted the stay, and DOJ moved to dismiss Niam’s claim, alleging that as a continuing fugitive who has failed to appear to answer the criminal charges she should be barred from participating in the civil forfeiture case. On September 27, 2024, Judge Leon granted DOJ’s motion to dismiss, finding that Niam met the definition of “fugitive” under 18 U.S.C. § 2466 (a “fugitive disentitlement” statute specific to forfeiture actions) because she was “deliberately avoid[ing] prosecution in the United States while using United States courts to retrieve the proceeds of her crime.”
- On November 12, 2024, DOJ filed a civil forfeiture complaint in the U.S. District Court for the Southern District of New York to recover millions of dollars in crypto assets linked to the FCPA charges against FTX and Alameda Research founder and CEO Samuel Bankman-Fried, who was convicted on non-FCPA charges in late 2023. As described in our 2023 Year-End FCPA Update, Bankman-Fried was indicted on FCPA charges associated with bribes allegedly paid to Chinese officials to unfreeze certain crypto assets, but the charges were severed and not part of the late 2023 trial because the initial extradition request did not include them. On March 29, 2024, following sentencing on the non-FCPA counts, DOJ moved to dismiss the FCPA count. This forfeiture action is against a crypto account, worth $18.5 million at the time of the complaint, allegedly used to launder $40 million in bribes paid to the Chinese government officials. According to a stipulation filed with and then entered by the Court on November 14, 2024, DOJ and other interest holders in the account reached an agreement to split the proceeds of the account 50/50.
2024 FCPA-RELATED POLICY DEVELOPMENTS
In addition to the many enforcement developments covered above, 2024 saw several important developments in FCPA-related policy areas. Examples discussed below include the creation of DOJ’s-own corporate whistleblower rewards pilot program, a separate pilot program holding out the prospect of non-prosecution for individuals who self-disclose their own criminal conduct, and new updates to DOJ’s Evaluation of Corporate Compliance Programs guidance.
DOJ’s Corporate Whistleblower Rewards Program
On August 1, 2024, DOJ launched a Corporate Whistleblower Awards Pilot Program, which allows so-called whistleblowers to submit information about certain corporate crimes to DOJ’s Criminal Division, and if that information leads to a forfeiture action, the reporter may be entitled to a cut of the proceeds. Our readers will immediately recognize this framework from well-established whistleblower bounty programs managed by the SEC, the Commodity Futures Trading Commission, and other civil enforcement agencies, but DOJ’s program is designed to fill in “important gaps in [these] existing federal whistleblower programs.” Specifically, this program targets information relating to crimes involving: (1) financial institutions; (2) international corruption involving non-issuers; (3) domestic corruption; and (4) health care fraud involving private insurers. The second category is of greatest interest to FCPA practitioners, as it supplements the SEC’s Dodd-Frank Whistleblower Program described in our 2010 Year-End FCPA Update, which applies only to “issuers,” and expands the universe of potential whistleblowers to those with information of corruption involving non-publicly traded domestic companies and foreign companies where there is a U.S. nexus.
The DOJ pilot program applies to forfeiture actions where the collection is greater than $1 million. A reporter with “original information” may receive up to 30% of the “net proceeds” (minus costs and victim distributions) up to the first $100 million collected, and 5% between $100 and $500 million. “Original information” must be “derived from the individual’s independent knowledge or analysis,” “non-public and previously not known to the Department,” provided “voluntarily” (e.g., not in response to governmental inquiry), and a “material” addition to the information DOJ already possesses. Certain information can never be “original,” including information obtained by virtue of an individual’s status as a corporate officer or director at a company, and confidential communications subject to the attorney-client privilege. Finally, individuals “who meaningfully participated in the criminal activity they report” are excluded from awards, as are those eligible under other award programs, DOJ employees and family members, and government officials.
The DOJ pilot program asserts that it encourages internal reporting by allowing a reporter to retain their eligibility if they report the information first internally through a company’s internal systems, provided they subsequently report to DOJ within 120 days of the first internal report. In a corresponding amendment to the Corporate Enforcement Policy, DOJ now will credit a company’s voluntary disclosure to DOJ even if DOJ was already aware of the matter through a jointly-reporting whistleblower, provided the company discloses the matter to DOJ within 120 days of receiving the whistleblower report through its internal system.
According to DOJ officials, the pilot program is off to a fast start. At the annual ACI Conference on the FCPA, DOJ MLARS Chief Molly Moeser (MLARS manages the DOJ whistleblower program) stated that DOJ received close to 300 tips in the first four months of the pilot program. The pilot program is effective for three years, unless extended. For more information on the Corporate Whistleblower Awards Pilot Program, please see our separate client alert, “Mind the Gap – The New DOJ Whistleblower Program.”
DOJ Pilot Programs on Individual Self-Disclosures
In a complementary development, on April 15, 2024, DOJ’s Criminal Division established a new Pilot Program on Voluntary Self-Disclosures for Individuals. Whereas the whistleblower rewards program described above holds out the carrot of monetary awards for (generally) non-culpable individuals, the individual self-disclosure pilot program holds out the carrot of non-prosecution for individuals who do bear greater individual culpability. As with the whistleblower rewards program, individuals are only eligible if they voluntarily provide original, non-public information not previously known to DOJ. Although this program is specific to the Criminal Division, numerous U.S. Attorney’s Offices have published their own programs as discussed below.
The focus of the individual self-disclosure pilot program is on criminal violations involving:
(1) financial institutions; (2) foreign corruption; (3) domestic corruption; (4) health care fraud; and (5) fraud against the United States. Individuals must submit a request for coverage to a specific DOJ email address before there is a request for information or governmental investigation. The program is not available for persons serving in roles equivalent to a CEO or CFO, government officials, those with prior disqualifying convictions, and generally anyone who organized or led the scheme in question. Further, an individual must agree to cooperate in the investigation and forfeit any illicit proceeds from the scheme.
As noted above, a number of U.S. Attorney’s Offices around the country with significant white collar criminal enforcement units have issued their own versions of individual self-disclosure pilot programs. These include the Eastern and Southern Districts of New York, the Central and Northern Districts of California, the District of Columbia, the District of New Jersey, the Northern District of Illinois, the Southern District of Texas, and the Southern District of Florida, among others. Although generally consistent, there is variation across these policies, and counsel is well advised to analyze the policies of the various offices with potential jurisdiction over a matter before selecting the office(s) to which to make any report.
DOJ Updates its Evaluation of Corporate Compliance Programs Guidance
As we first discussed in our 2017 Mid-Year FCPA Update, and then again most recently in our 2023 Year-End FCPA Update, from time to time DOJ’s Criminal Division updates its Evaluation of Corporate Compliance Programs (ECCP) guidance to provide transparency around how DOJ evaluates corporate compliance programs. The most recent revisions were posted on September 23, 2024, with three main changes: (1) evaluation and management of risks related to emerging technologies, such as artificial intelligence; (2) further emphasis on the role of data analytics; and (3) whistleblower protection and anti-retaliation. We summarize these updates below, but refer readers to our separate client alert, “DOJ Updates Its Evaluation of Corporate Compliance Programs Guidance Focused on AI and Emerging Technologies,” for additional analysis.
With respect to emerging technologies such as artificial intelligence, DOJ’s focus remains on the misuse of these technologies in criminal conduct, given their ability to “supercharge” corporate crime. The revised ECCP details DOJ’s expectations that companies tailor their compliance programs both to identify and manage the risks posed by artificial intelligence through, for example, protocols that document their use and assess the risk level posed by using this technology.
As it relates to data analytics, the ECCP revisions signal the continued importance of companies ensuring that compliance personnel have access to data sufficient to assess the effectiveness of their compliance program. Prosecutors are to assess whether a company is “appropriately leveraging data analytics tools” at its disposal, focusing on whether compliance personnel have the same access to emerging technologies as do business teams in the same company.
Finally, the ECCP counsels prosecutors to consider whether the company has an anti-retaliation policy, whether and how an entity “incentivize[s] reporting,” how employees who report misconduct are disciplined in comparison to others involved in the misconduct, and whether the company informs its employees of applicable whistleblower and anti-retaliation protections. The last aspect is by far the most controversial, as DOJ seems to suggest in the ECCP that companies should affirmatively train their employees on the availability of external whistleblower reward programs, which as a practical matter may have the effect of frustrating internal reporting.
In total, the ECCP addresses more than 300 compliance considerations, echoing almost as SEC regulations. But it has been DOJ championing and leading the way in this detailed anti-corruption compliance guidance.
2024 FCPA-RELATED LEGISLATIVE DEVELOPMENTS
As covered in our 2023 Year-End FCPA Update, in December 2023 Congress passed FEPA, which for the first time directly criminalizes the demand side of bribery by prohibiting the receipt of corrupt payments by foreign officials (although, as noted above, this has long been accomplished through ancillary statutes). On July 20, 2024, “technical” amendments to FEPA went into effect to, as Congressman Darrell Issa (R-CA) stated, remove “inconsistencies between the language of the FCPA and the FEPA.”
The first notable change is that the amendment moves FEPA from an oddly-placed subsection of the domestic bribery statute, 18 U.S.C. § 201, to its own standalone provision of Title 18, 18 U.S.C. § 1352. The amendments also serve to harmonize prior inconsistencies between FEPA and the FCPA as to extraterritorial application, the definition of “foreign officials,” and what type of conduct must be influenced to qualify as an “official act.”
There still has yet to be a (public) enforcement action under FEPA, but given the statute’s newness, that criminal statutes apply only prospectively to conduct occurring after their implementation, and that international corruption investigations generally take years to develop, the lack of early enforcement is not surprising. It will take years to assess the impact (or lack of impact) of FEPA.
2024 FCPA-RELATED PRIVATE CIVIL LITIGATION
As we report in each of these client updates, although the FCPA does not provide for a private right of action, civil litigants nonetheless frequently employ various causes of action arising out of FCPA-related conduct. As illustrated below, these civil lawsuits can stretch on for years after a company resolves enforcement liability. A selection of such matters with material developments in 2024 follows.
Select Civil Fraud/RICO Actions
- Keppel Offshore & Marine – For years, we have been reporting on an assortment of civil lawsuits initiated by EIG Global Energy Partners against Keppel Offshore & Marine arising out of the latter’s involvement in the “Operation Car Wash” scandal in Brazil, resulting in a 2017 deferred prosecution agreement with DOJ as reported in our 2017 Year-End FCPA Update. EIG alleges that it lost its $220 million investment in a Petrobras-related offshore drilling venture after news of the corruption investigation broke. One fraud-related lawsuit filed against Keppel and Petrobras in the U.S. District Court for the District of Columbia was dismissed for lack of personal jurisdiction, which ruling was upheld by the D.C. Circuit, as last reported in our 2018 Mid-Year FCPA Update. In a separate fraud action against Keppel filed in the U.S. District Court for the Southern District of New York, on March 20, 2024, the Honorable Paul G. Gardephe granted Keppel’s motion for summary judgment, finding that Keppel had no actual knowledge of fraudulent representations Petrobras made to EIG and that Keppel did not otherwise aid or abet this fraud. EIG has noted an appeal to the Second Circuit.
Select Shareholder Lawsuits
- Tenaris S.A. – As we initially reported in our 2020 Year-End FCPA Update, shareholders brought a securities class action against Luxembourg-based steel pipe producer Tenaris that alleged that the company’s public filings and employee codes of conduct were materially misleading in light of bribery allegations in connection with what became known as Argentina’s “Notebooks” scandal. The lawsuit followed charges against Tenaris’s CEO in Argentina for alleged bribes to Argentinian officials in return for their lobbying the Venezuelan government to prevent the nationalization of an asset of Tenaris’s Venezuelan subsidiary. The civil shareholder action survived the all-important motion to dismiss, at least in part, and on April 22, 2024, the Honorable Kiyo Matsumoto of the U.S. District Court for the Eastern District of New York approved a settlement pursuant to which Tenaris will pay $9.5 million, with 24,344 claimants eligible to receive what will amount to an average of $242 in compensation after attorneys’ fees.
- Cognizant Technology Solutions Corp. – On May 3, 2024, the U.S. Court of Appeals for the Third Circuit, sitting en banc, upheld the 2022 dismissal of a shareholder derivative action brought against Cognizant and its board of directors predicated on alleged control lapses and corporate misstatements associated with the company’s resolution of an FCPA matter with DOJ and the SEC reported in our 2019 Year-End FCPA Update. The Third Circuit initiated en banc review sua sponte to consider the standard for reviewing dismissals of shareholder derivative actions for failure to establish demand futility in light of a growing trend in the federal circuit courts of appeal to review such dismissals de novo, as opposed to the abuse of discretion standard that had been the law of the Third Circuit. The en banc court decided to join the other circuits in applying de novo review to shareholder derivative actions dismissed for failure to establish demand futility, but even under this more exacting standard found that the Honorable Kevin McNulty of the District of New Jersey correctly dismissed the action.
- Telefonaktiebolaget LM Ericsson – On September 3, 2024, the U.S. Court of Appeals for the Second Circuit affirmed the dismissal of a securities class action brought against Swedish telecommunications company Ericsson for alleged false statements concerning the strength of its anti-corruption compliance program and its compliance with a 2019 deferred prosecution agreement, which DOJ determined had been breached, leading to a guilty plea to FCPA charges in 2023 as reported in our 2023 Year-End FCPA Update. The U.S. District Court for the Eastern District of New York granted Ericsson’s motion to dismiss, reasoning that Ericsson’s generalized statements about its ethics and compliance program were legal puffery and did not contain sufficient specificity to be actionable. As to Ericsson’s statements about compliance with the deferred prosecution agreement, the court found that the statements were limited in scope to the FCPA investigations by the government, conveyed nothing about any internal investigations by the company, and in several instances were inactionable puffery warning investors about the possibility of future investigations and compliance failures. The Second Circuit agreed with these findings and affirmed the dismissal.
Other Civil Claims
- Associated Energy Group LLC – An unusual variant in FCPA-adjacent litigation developed in July 2024, when defense contractor Associated Energy Group initiated bid protest litigation in the U.S. Court of Federal Claims seeking to block the Defense Logistics Agency’s award of a $500 million fuel supply contract for two U.S. military bases in Djibouti. The protestor’s theory is that the bid’s technical requirement that bidders hold a Petroleum Activities License issued by Djibouti’s Ministry of Energy effectively requires bribery and unfairly disadvantages those constrained by U.S. law because this license cannot be obtained without bribery, as the protestor allegedly found through its prior efforts to execute on this project. The United States moved to dismiss the bid protest, arguing that the lack of a license rendered Associated Energy Group ineligible to fulfill the contract under Djibouti law. On September 10, 2024, the Honorable Armando O. Bonilla denied the motion to dismiss, allowing the bid protest to proceed. Associated Energy Group filed an amended complaint in November, which remains under seal.
2024 YEAR-END INTERNATIONAL ANTI-CORRUPTION DEVELOPMENTS
World Bank
Multilateral development banks (MDBs), and in particular the World Bank, continued to engage in significant enforcement activity in 2024. As we have noted in past updates, while the sanctionable practices addressed by these debarments reflect the Bank’s emphasis on preserving the integrity of the contracting process for Bank-funded projects, the ramifications of Bank-led investigations and sanctions go far beyond those projects, including cross-debarments with other MDBs and, in some cases, referrals to state law enforcement authorities.
Continuing a trend we observed last year, the World Bank’s 2024 sanctionable practices enforcement emphasized corporate compliance enhancements as a condition of release from debarment. In three corruption-related corporate debarments, the Bank required that the companies develop an integrity compliance program consistent with Bank guidelines, though in other debarments the Bank imposed more discrete requirements, for example developing certain policies and instituting ethics training.
- Bribery, Corruption, and Obstructive Practices. The May 14, 2024 debarment of Marseille for Engineering & Trading S.A.L. Offshore, a Jordanian company that provides engineering and consulting services, resulted in a 30-month debarment for alleged bribes offered to influence the bid evaluation process for an Iraqi reconstruction project. The debarment requires the company to develop an integrity compliance program consistent with Bank guidelines. The Bank also imposed such an obligation in the July 10, 2024 65-month debarment of Indonesian consulting firm LPPSLH Konsultan—for allegedly overbilling an Indonesian early childhood development project, improperly hiring a project official’s family member, and withholding documents material to the Bank’s investigation. Finally, demonstrating individual accountability in World Bank enforcement, on March 12, 2024 the Bank announced the two-year debarment of consultant Victor Uneojo Akuboh for his alleged participation in improper payments to Nigerian officials to influence their actions in connection with a Bank-funded social safety net project.
- Undisclosed Agents. On June 26, 2024, the World Bank announced a 30-month debarment of the Kenyan member firm of a global Big Four accounting network for allegedly failing to disclose a conflict of interest relating to the involvement of an agent during the selection and implementation of four contracts in Somalia, as well as for allegedly paying an allowance to project officials. Similar to other debarments, the Bank imposed an obligation to develop an integrity compliance program consistent with Bank guidelines.
United Kingdom
Anti-corruption enforcement and policy developments out of the UK continued apace in 2024.
Petrofac Executives Charged with UAE Corruption
On February 15, 2024, the SFO charged Marwan Chedid and George Salibi, two former senior executives of UK-based energy services conglomerate Petrofac, with allegedly offering and paying over $30 million in bribes to agents in the United Arab Emirates between 2012 and 2018, to influence the awarding of oil facility contracts worth approximately $3.3 billion. The men have denied all charges and are scheduled to stand trial in October 2026.
Trial Acquittals in Airbus Bribery Scheme
On March 6, 2024, the SFO’s oldest active case was closed with a dull thud. Following a 12-year investigation, a London jury acquitted Jeffrey Cook and John Mason, respectively a former managing director and accountant of Airbus-owned defense company GPT Special Project Management, of charges that they passed almost £10 million in bribes to military officials in Saudi Arabia in connection with contracts to build a telecommunications network for the Saudi National Guard. GPT itself was fined £30 million after pleading guilty to one count of corruption in the matter, as reported in our 2021 Year-End FCPA Update. As for Cook and Mason, they defended themselves to the jury by arguing that the bribery scheme was known to the UK government and authorized by the Ministry of Defence. Cook was convicted, however, of a separate charge of receiving bribes during his time as a UK Ministry of Defence official prior to his work for GPT.
Conviction of Madagascar’s Former Presidential Chief of Staff
On May 10, 2024, following a two-week trial, a London court sentenced former top aide to Madagascar’s President Romy Andrianarisoa to three-and-a-half years in prison. Andrianarisoa was convicted of corruptly seeking £250,000 in bribes and an ownership stake in a local venture with Gemfields, a UK gemstones company. French businessman Philippe Tabuteau was also sentenced to two years and three months arising from the scheme after pleading guilty in September 2023. The pair allegedly requested the bribes in exchange for lucrative contracts that would allow Gemfields to operate in Madagascar, but rather than pay, Gemfields proactively notified the UK National Crime Agency (NCA), which placed an undercover agent posing as a consultant to negotiate with Andrianarisoa and Tabuteau on Gemfields’s behalf. The NCA commended Gemfields for swiftly bringing the matter to the NCA’s attention.
PV Energy Charges
On May 23, 2024, UK renewable energy company PV Energy Ltd and its director Peter Virdee were charged with UK Bribery Act violations associated with alleged bribes to a Member of Parliament in Antigua and Barbuda, to obtain a commercial benefit for PV Energy between January 2015 and June 2017. Virdee is charged with making the bribes and PV Energy with failure to prevent them. Reports are that Virdee has pleaded not guilty, and no plea was entered for PV Energy. The trial for both PV Energy and Virdee has been set for January 2027.
Glencore Individual Corruption Charges
On August 1, 2024, the former head of Glencore’s oil division, Alex Beard, was charged with two conspiracies to make corrupt payments to officials of government agencies and state-owned oil companies in Nigeria and Cameroon. The same day, former traders Paul Hopkirk and Ramon Labiaga were charged with conspiring to bribe public officials in Nigeria, and former trader Martin Wakefield and former operations manager Andrew Gibson with conspiring to bribe officials in Cameroon, Côte d’Ivoire, and Nigeria. Eight days later, on August 9, former executive David Perez was charged with conspiring to bribe officials in Cameroon and Côte d’Ivoire. One further defendant, who has not been named and remains outside the UK, was charged simultaneously with Perez. All those who have entered pleas have pleaded not guilty, and the estimated four-to-six-month trial is scheduled for 2027.
SFO Agrees to Civil Settlement to Resolve ENRC Claims
On October 8, 2024, the long running saga between Kazakh mining company Eurasian Natural Resources Corporation (ENRC) and the UK Serious Fraud Office (SFO) over the alleged leaking of information about a bribery investigation finally concluded when the parties reached a last-minute, pre-trial settlement. The SFO opened its investigation into ENRC in 2013 over suspected bribery and corruption, but closed the matter in 2023 after concluding that there was “insufficient admissible evidence to prosecute.” In a stunning move, ENRC sued the SFO and two individuals for allegedly leaking details about the investigation to various journalists between 2016 and 2020. The details of the settlement are largely confidential, but in related proceedings the SFO set aside £231 million, more than twice the agency’s annual budget, to cover potential damages.
London Court Awards Mozambique $2 billion Related to “Tuna Bonds” Deal
On July 29, 2024, the UK High Court ruled in favor of the Republic of Mozambique in its civil claim against shipbuilding company Privinvest and its chairman, Iskander Safa, for allegedly bribing former Mozambican Finance Minister Manuel Chang, whose U.S. trial conviction we discuss above, to secure government-guaranteed loans to build marine infrastructure. The default on the “Tuna Bonds” loans in 2016 led the International Monetary Fund to cut funding to Mozambique, an action that helped push the country into economic crisis. Privinvest was ordered to pay more than $2 billion to Mozambique, plus £20 million in litigation costs accumulated over the five-year dispute. On December 10, 2024, the High Court refused permission to appeal and Privinvest’s lawyers announced their intent to appeal directly to the Court of Appeal.
SFO Announces New Five-Year Strategy
On April 18, 2024, SFO Director Nick Ephgrave announced a five-year strategy in which he outlined his aspirations for the SFO “to be the pre-eminent specialist, innovative and collaborative agency which leads the fight against serious and complex fraud, bribery and corruption.” His vision includes leveraging new powers granted the SFO, including the new failure to prevent fraud offense as well as Criminal Overseas Production Orders. Director Ephgrave’s strategy also aligns with comments made by Director Ephgrave in his inaugural speech as Director of the SFO on February 13, in which he expressed a desire to reduce the time between investigation and prosecution, to avoid “decade-long investigations,” and plans to conduct dawn raids more frequently to “provide momentum” to investigations.
UK Home Office Issues ECCTA Guidance
On November 6, 2024, the UK Home Office issued guidance on the Economic Crime and Corporate Transparency Act 2023 (ECCTA), which will come into force on September 1, 2025. As reported in our 2023 Year-End FCPA Update, the ECCTA creates a new offense for “failure to prevent fraud” that imposes criminal liability on large organizations if a member of staff commits fraud intended to benefit the organization. The Home Office guidance clarifies certain aspects of the offense, provides examples of hypothetical scenarios in which the offense applies, and makes recommendations as to how companies should prepare for the new offense coming into force, including: (1) demonstrating top-level commitment to fraud prevention from senior management; (2) conducting regular risk assessments; (3) implementing proportionate, risk-based prevention procedures; (4) carrying out due diligence on associated persons and in relation to mergers or acquisitions; (5) ensuring adequate communication and training at all levels of the organization; and (6) conducting regular compliance reviews and monitoring. For more comprehensive analysis of this guidance, we refer readers to our separate client alert, “Publication of UK Government Guidance on Failure to Prevent Fraud Offence.”
Europe
European Union
On April 25, 2024, in response to the so-called “Qatargate” scandal we have discussed in recent updates, the European Parliament approved the creation of a new EU body for ethical standards to develop, update, and interpret common minimum standards for ethical conduct for all EU institutions. The “Qatargate” scandal concerned allegations of Qatar and Morocco corruptly seeking to influence votes and other official proceedings. The new body will also have the power to examine individual cases and issue recommendations.
On June 14, 2024, the Council of the European Union also agreed on a revised version of a proposal for a new directive targeted at addressing corruption at the EU level. As reported in our 2023 Year-End FCPA Update, the intent of the directive is to harmonize corruption offenses, sanctions, prevention, and enforcement across EU member states. Key changes to the proposed directive in 2024 include adjustments to the definitions of corruption offenses, such as narrowing the “abuse of functions” offense to apply only to the public sector, and clarifying the concept of “enrichment from corruption offenses.” The Council also emphasized the importance of respecting member states’ institutional autonomy and national constitutions, particularly in relation to privileges and immunities. These revisions are now set to be discussed in negotiations with the European Parliament to align on a definitive version of the directive. If adopted, member states will need to transpose the directive into national law, aligning their legal frameworks with EU standards on corruption prevention, enforcement, and whistleblower protection.
France
On December 9, 2024, a French court approved a judicial public interest agreement (CJIP) between the Parquet National Financier (PNF) and French nuclear power companies and former affiliates Areva SA and Orano Mining SAS to resolve allegations of bribery of public officials in Mongolia. Areva will pay approximately €4.8 million (~ $5.1 million) and the Orano Group will cooperate with audits by the Agence Française Anticorruption (AFA), paying for the cost up to a maximum of €1.5 million (~ $1.6 million).
Germany
In March 2024, ABB AG reached a settlement with Germany’s Mannheim Regional Court to resolve allegations that it paid bribes to win contracts in South Africa. This appears to be the final step to resolve investigations into ABB’s conduct in South Africa, which as we reported in our 2022 Year-End Update resulted in coordinated resolutions with DOJ and the SEC in the United States and criminal authorities in South Africa and Switzerland arising from bribes to a high-ranking official of a state-owned energy company in South Africa. In this latest resolution, ABB AG reportedly agreed to the confiscation of profits from the alleged bribes in the amount of €9.4 million (~ $10.2 million), however no separate fine was imposed on the company. ABB’s deferred prosecution agreement with DOJ credited the amount of an anticipated German resolution up to $11 million if agreed within one year, but in December 2023 DOJ reportedly agreed to extend that one-year limit such that ABB likely received credit for the German resolution payment.
Italy
On October 8, 2024, Italian prosecutors Fabio De Pasquale and Sergio Spadaro were each sentenced to eight months in prison for failing to disclose exculpatory evidence in a high-profile corruption trial involving Shell and Eni that centered on the $1.3 billion acquisition of a Nigerian oil field. The prosecutors alleged that much of the money was used to bribe Nigerian politicians and officials, but all defendants were acquitted by an Italian court, as covered in our 2021 Year-End FCPA Update. The defendants were convicted of withholding evidence that could have undermined the credibility of a cooperating defendant, but their sentences have been suspended pending appeal in what has become a very controversial case.
Poland
In January 2024, Poland’s Anti-Corruption Agency reported that nine people, including a former Deputy Minister, had been indicted in the Cash-for-Visa scandal, which we initially discussed in our 2023 Year-End FCPA Update. In a parallel ongoing parliamentary committee investigation, former prime minister Mateusz Morawiecki denied any wrongdoing. On June 5, 2024, legislators asked a court to force the former CEO of oil refiner Orlen, Daniel Obajtek, to testify after he failed to appear before a parliamentary committee. On November 26, 2024, the parliamentary committee announced that it will send evidence of alleged breaches of law by the former prime minister and other senior members of his government to prosecutors.
Spain
On May 23, 2024, the Spanish Tax Administration Agency announced charges against eight unnamed individual defendants in connection with an alleged scheme to launder over €10 million
(~ $1 million) in proceeds of corruption from Equatorial Guinea. Some reports have connected the conduct to Gabriel Mbaga Obiang Lima, who was the Minister of Mines at the time of the alleged conduct and is also a son of Equatorial Guinea’s President Teodoro Nguema Obiang Mangue. President Obiang was previously convicted of corruption in France in 2017, as reported in our 2017 Year-End FCPA Update, and reached an agreement with MLARS in 2014 to forfeit $30 million in assets purchased with the alleged proceeds of corruption as reported in our 2014 Year-End FCPA Update.
Switzerland
On April 4, 2024, the Swiss Office of the Attorney General (OAG) issued a summary penalty order against PKB Privatbank for allegedly failing to prevent the laundering of funds stemming from corruption at Brazilian state-owned oil company Petrobras. The bank initially came under scrutiny as a result of the Operation Car Wash scandal and is the third lender convicted of violating the Swiss criminal code’s requirement for businesses to take all reasonable organizational measures to prevent certain offenses including money laundering and bribery. The order requires the bank to pay a penalty of $830,000, which is in addition to a prior Swiss Financial Market Supervisory Authority (FINMA) order to disgorge $1.4 million in profits associated with funds linked to Operation Car Wash.
On August 28, 2024, PetroSaudi executives Tarek Obaid and Patrick Mahony were convicted in the Federal Criminal Court in Bellinzona of fraud, criminal mismanagement, and money laundering. As reported in our 2023 Year-End FCPA Update, the two men were charged with embezzling $1.8 billion from the Malaysian state fund 1MDB. Obaid received a seven-year sentence, and Mahony received a six-year sentence, and the former executives were further ordered to pay $2 billion plus interest to 1MDB. Both individuals have declared they will appeal.
On November 29, 2024, the OAG announced the indictment of Swiss bank Lombard Odier, as well as an unnamed former employee, on charges that it failed to prevent a criminal organization allegedly run by Gulnara Karimova from laundering illicit proceeds between 2008 and 2012. The OAG previously indicted Karimova, daughter of Uzbekistan’s former president, in September 2023, as reported in our 2023 Year-End FCPA Update. The indictment accused her of participating in a criminal organization known as “The Office,” from which she allegedly engaged in money laundering, acceptance of bribes as foreign public official, and forgery of documents between 2001 and 2013. Lombard Odier has denied the allegations in the indictment, and stated that the bank has cooperated with the OAG’s investigation, which was opened following a disclosure from the bank.
Finally, in December 2024 Trafigura AG, its former Chief Operating Officer Mike Wainwright, former Angolan official Paulo Gouveia Junior, and an unnamed intermediary went on trial before the Federal Criminal Court in Bellinzona associated with allegations that, between 2009 and 2011, Trafigura caused the payment of $5 million in bribes to Angolan officials in exchange for ship chartering and oil bunkering contracts. We reported on the original charges in our 2023 Year-End FCPA Update. The three-week trial concluded in December and, on January 31, 2025, the Court convicted all four defendants: Trafigura of not having the required internal controls (between 2009 and 2011) to prevent the alleged bribery, and Wainright, Gouveia, and the intermediary of collectively facilitating and receiving the alleged bribes. Trafigura was sentenced to forfeit $145 million in profits and pay a $3.29 million fine; Wainright was sentenced to 22 months in prison (10 suspended), pending appeal; Gouveia was sentenced to pay a $1.2 million penalty and $5.2 million in confiscation; and the unnamed intermediary was sentenced to 24 months in prison (12 suspended), pending appeal.
Eastern Europe and Central Asia
Armenia
As noted in our Kleptocracy Initiative discussion above, in 2024 DOJ announced a settled civil forfeiture action involving a Los Angeles mansion belonging to the family of Gagik Khachatryan, the former Finance Minister of Armenia. But criminal charges against Khachatryan and Armenian businessman Sedrak Arustamyan have been proceeding in Armenia since 2019, when both were charged with money laundering, and Khachatryan also charged with abuse of office and embezzlement, with a total alleged damage to the state of $41 million. These proceedings stalled in 2024, however, as Khachatryan has asked for permission to travel abroad for medical treatment, and the European Court of Human Rights has directed the Armenian government to explain why they would not allow him to travel for medical care.
Georgia
Georgia had been focused on improving its anti-corruption enforcement regime as part of its EU accession process, but it is not clear whether these efforts will continue after the Georgian government announced in November that it was suspending the accession process. The European Commission Staff’s Georgia 2024 Report, released before Georgia announced suspension of the accession process, suggested that Georgia had regressed in meeting membership requirements, including as it relates to combatting corruption. That said, in May 2024, the Georgian parliament adopted amendments to the Law on the Fight Against Corruption that aimed to strengthen Georgia’s Anti-Corruption Bureau and the protection of whistleblowers.
Kazakhstan
In 2024, the Anti-Corruption Service of Kazakhstan recovered approximately 195 billion tenge
(~ $405.8 million) from defendants in completed criminal cases. A significant portion of this amount, $98.5 million, was recovered from Kairat Satybaldyuly, a Kazakh businessman and relative of former President Nazarbayev, in what is viewed as the biggest anti-corruption case since the resignation of former President Nazarbayev. The Anti-Corruption Service stated that the funds were returned as part of the criminal case against Satybaldyuly, who was convicted for abuse of power and embezzlement in September 2022. Satybaldyuly’s ex-wife, Gulmira Satybaldyuly, faces extortion and other charges related to the same investigation.
Moldova
Like Georgia above, Moldova’s EU accession negotiations have also involved a significant anti-corruption component. But unlike Georgia, the European Commission Staff’s 2024 Report for Moldova praises the country’s recent progress, including steps to strengthen the independence of, and clarify the division of responsibilities between, its principal anti-corruption enforcement agencies. Moldova also created panels of specialized judges focusing on corruption cases in the Chisinau Court while working to implement a specialized anti-corruption court. Moldova also adopted several measures to enhance the system of mandatory declaration of assets, including a new methodology for verifying assets and personal interests, and to strengthen the role and functionality of Moldova’s National Integrity Authority, the agency responsible for monitoring wealth and conflict of interest compliance of public officials.
Russia
The main anti-corruption news to come out of Russia this year was the untimely death of anti-corruption activist and outspoken Kremlin critic Aleksei Navalny in February 2024. Navalny died while serving a nine-year sentence in Russian prison on contempt and embezzlement charges that were widely believed to have been politically motivated.
Meanwhile, the Russian government continues to assert that it is robustly combatting corruption. In December 2024, Russia’s top prosecutor Igor Krasnov reported that corruption in Russia is getting worse, with an estimated 30% more bribes paid in 2024 than in 2023 and more than 30,000 officials disciplined for bribery. To facilitate enforcement, two months earlier, the Constitutional Court of Russia removed statute of limitations restrictions for corruption-related asset seizures.
Finally, in what has become known as the “Defense Ministry Purge,” numerous military officials have been arrested on bribery charges since April 2024. These include Russia’s Deputy Defense Minister Timur Ivanov, former Defense Minister Sergei Shoigu, Chief of the Defense Ministry’s Main Personnel Directorate Lieutenant General Yury Kuznetsov, former Deputy Defense Minister Dmitry Bulgakov, Deputy Chief of the Russian Military General Staff Lieutenant General Vadim Shamarin, and former Deputy Defense Minister Pavel Popov.
Ukraine
Ukraine has continued to focus its wartime anti-corruption activities on weeding out corrupt government officials and implementing reforms to meet the requirements for accession to international organizations. Despite these efforts, corruption was mentioned as a reason for NATO’s rejection of Ukraine’s request to begin the accession process in the summer of 2024. According to the European Commission Staff’s Ukraine 2024 Report, although Ukraine’s key anti-corruption institutions have strengthened their expertise in tackling complex crime schemes and systemic corruption, case prioritization and confiscation of assets are areas for improvement. The report also highlighted several legislative actions and key milestones, including the Law on Lobbying creating a comprehensive framework for regulating lobbying with penalties and oversight administered by the National Agency on Corruption Prevention, and the first two anti-corruption whistleblower awards in October 2024.
Headlining Ukraine’s latest anti-corruption enforcement efforts is the dismissal of Deputy Energy Minister Oleksandr Kheylo. Kheylo is accused of demanding a $500,000 bribe in exchange for allowing several state-owned mining companies to evacuate equipment from the war zone coal mines in the Donetsk region. Additionally, on November 14, 2024, Ukraine’s High Anti-Corruption Court sentenced a member of the Ukrainian parliament in absentia for attempting to bribe the Head of the State Agency for Reconstruction and Development of Infrastructure with bitcoin in exchange for allocating reconstruction funds to a university headed by the defendant.
The Americas
Brazil
On February 26, 2024, Singaporean oil and gas rig builder Seatrium announced that it reached a provisional agreement with three Brazilian enforcement agencies to settle allegations of corrupt payments made by its predecessor company, Sembcorp Marine, arising from the long-running “Operation Car Wash” scandal. The company has agreed to pay BRL 670.7 million (~ $134.2 million) and abide by compliance obligations to resolve the claims of Petrobras-related corruption. Two employees have been criminally charged in Singapore as discussed below.
On March 11, 2024, Canadian chemicals producer Chemtrade announced that its Brazilian subsidiary has agreed to pay BRL 2 million (~ $400,000) to settle allegations that it breached Brazil’s anti-corruption law. The settlement stems from an investigation by Brazil’s Ministry of Development, Industry and Foreign Trade into Chemtrade Brasil’s purchase of 16 monthly import reports between 2015 and 2017, which contained information allegedly obtained through improper payments to government officials. Now more than 10 companies have been penalized in connection with “Operation Spy,” an investigation by Brazil’s Federal Police, tax agency, and Federal Prosecutor’s office into purchases of confidential trade information through bribes to Brazil’s Federal Revenue Service.
Ecuador
As noted above, in March 2024 Gunvor reached an FCPA resolution with DOJ arising from alleged bribes to officials of Ecuadorian state-owned oil company Petroecuador, with the prospect of a credit to the criminal fine for up to $93.6 million paid to Ecuadorian authorities associated with the same conduct, provided the penalty was paid within 12 months. Sure enough, three months later, on June 11, 2024, Ecuador’s State Attorney General’s Office announced that Gunvor had paid $93.6 million to resolve its claims associated with the bribery allegations.
Peru
On October 21, 2024, former Peruvian President Alejandro Toledo Manrique was sentenced to 20-and-one-half years in prison in connection with bribes received from Brazilian construction company Odebrecht S.A. The conviction is part of a string of cases stemming from Odebrecht’s extensive corruption scheme, covered since our 2016 Year-End FCPA Update. Former president Toledo’s sentence concludes a long-running legal battle that led to his extradition from the United States on April 19, 2023. A Peruvian court convicted Toledo on collusion and money laundering charges in connection with accepting $35 million in bribes from Odebrecht in exchange for a contract to build a major highway in the South American nation.
Middle East & Africa
South Africa
On January 11, 2024, South Africa’s National Prosecuting Authority announced that it had resolved bribery allegations with SAP for ZAR 2.2 billion (~ $118 million) in disgorgement and “punitive reparation payments,” which, after crediting part of the payments to U.S. authorities as discussed above, resulted in a total payment of approximately $114 million.
On April 3, 2024, South Africa passed the Judicial Matters Amendment Act, which among other things amended the Prevention and Combatting of Corrupt Activities Act of 2004 to create a new failure to prevent corruption offense. Similar to the UK’s failure to prevent corruption law, there is an affirmative defense if the company had “adequate procedures” to prevent corruption.
On April 19, 2024, the National Prosecuting Authority published guidance on a new corporate alternative dispute resolution mechanism that will be available to companies charged with corruption and corruption-related offenses. This non-trial resolution mechanism is similar to non-prosecution agreements utilized in the United States and certain other jurisdictions, and will not require court approval. According to the guidance, the National Prosecuting Authority will consider a number of criteria when determining whether matter is appropriate for pre-trial resolution, such as timely and voluntary disclosure of the alleged unlawful activity, cooperation in the ensuing investigation, willingness to pay restitution, the nature of the unlawful activities, the company’s prior history of any misconduct, the effectiveness of the company’s compliance program, the likelihood of significant negative collateral effect from conviction on the company, and the interests of any victims.
Saudi Arabia
On July 23, 2024, Saudi Arabia’s Council of Ministers approved the Saudi Oversight and Anti-Corruption Authority (Nazaha) Law, which requires immediate dismissal of any government employee convicted of corruption. The law establishes a rebuttable presumption that a government employee is guilty of corruption if the employee amasses wealth disproportionate to his or her income and that increase is linked to corruption. In those circumstances, the employee bears the burden of proving the legitimacy of the acquired assets. This burden shifting dynamic is also applied to close family members of the employee.
Asia and Australia
China
China’s financial sector continued to face an extensive anti-corruption purge in 2024, with numerous high-profile arrests and indictments. In January 2024, former chairman of China Everbright Group Shuangning Tang was arrested for alleged embezzlement and receiving bribes. In April 2024, the former chairman of a major financial institution, Liange Liu, pleaded guilty to soliciting and accepting improper payments totaling RMB 121 million (~ $16 million). In May 2024, two former senior executives of a different significant financial institution, Liyan An and Hongli Zhang, were expelled from the Communist Party over influence-peddling allegations. In the cryptocurrency space, Qian Yao, the People’s Bank of China’s inaugural Director of Digital Currency Research and Director of the Technology Supervision Department of the China Securities Regulatory Commission, has been accused of taking large bribe payments from technology companies seeking his support.
China’s energy sector also found itself in the spotlight amid high-profile corruption scandals. In April 2024, former Deputy General Manager of China National Petroleum Corporation Wenrong Xu was charged with accepting bribes. In May 2024, the Central Commission for Discipline Inspection announced that it has begun an investigation into Meisheng Qi, former chairman of the China National Offshore Oil Company for suspected “serious disciplinary violations,” a phrase commonly used to refer to bribery allegations.
On the legislative front, on March 1, 2024 the Chinese government introduced anti-corruption-related amendments to its Criminal Law. The revisions increase penalties for bribe-giving, bringing them in line with those for bribe-taking, and impose liability on private-sector employees for corruption-related offenses that were previously only applicable to employees of state-owned enterprises. The revised legislation also introduces seven corruption-related “aggravating factors” that the judiciary must consider at sentencing, including whether there were multiple bribe payments, whether the bribes were paid within certain industries (for example, the healthcare sector), and whether the bribes were made from the proceeds of other crimes.
In May 2024, the Chinese government introduced amendments to the State Secrets Law and published the implementing regulations of the International Criminal Judicial Assistance Law, both of which will impact companies’ efforts to manage internal investigations, cross-border data transfers, and responses to enforcement agencies. In particular, the implementation regulations of the International Criminal Judicial Assistance Law provide clarity on the government approval process Chinese parties must follow if they wish to cooperate with a foreign government in connection with a criminal proceeding.
India
A landmark ruling in 2024 by the Supreme Court of India invalidated a controversial political funding scheme operated by the government-run State Bank of India. Under the scheme, companies and individuals could purchase bonds and redeem them anonymously in an account held by a designated political party, a practice that was widely viewed as posing elevated risks of corruption. As part of the Supreme Court’s ruling, information regarding the buyers and sellers of these bonds was released, resulting in investigations of dozens of companies associated with a total of INR 24.71 billion (~ $292 million) in donations to political parties.
The now-former Chief Minister of the State of Delhi (and prominent anti-corruption crusader) Arvind Kejriwal was arrested by the Enforcement Directorate in March on corruption and money laundering charges relating to a policy introduced by the Delhi Government to end the existing state liquor monopoly and allow private-sector vendors. Federal enforcement authorities allege that Kejriwal’s political party accepted bribes of INR 1 billion (~ $12 million) in return for granting liquor licenses to private vendors following passage of the law in 2021.
Singapore
On March 28, 2024, Singaporean authorities announced charges against Wong Weng Sun and Lee Fook Kang, two former executives of Sembcorp Marine (now known as Seatrium), for allegedly making $44 million in improper payments to further the company’s business interests with Petrobras in Brazil. As noted above, the company reached a provisional agreement with Brazilian authorities in February 2024.
In October 2024, courts in Singapore sentenced former cabinet minister Subramaniam Iswaran to 12 months’ imprisonment after he was found guilty of corruption and obstruction of justice. The court found that Iswaran received improper gifts worth SGD 403,300 (~ $313,200) from two businessmen (Kok Seng Lum and Beng Seng Ong) over a seven-year period. Subramanian, who oversaw Singapore’s tourism industry until his resignation following the charges, received gifts from Ong, a Malaysian property developer who owned the rights to the Formula One race that Iswaran brought to Singapore. On October 4, 2024, the Singapore Attorney-General declined to file charges against Lum.
South Korea
Korea’s Anti-Corruption and Civil Rights Commission announced amendments to the Whistleblower Protection Act that took effect on August 7, 2024. The amendments require organizations to provide guidance to potential whistleblowers, abolish limits on monetary rewards provided to “internal whistleblowers” (defined as any employee or contracting party of a public institution, corporation, entity, or organization), and mandate discipline of anyone who breaches whistleblower confidentiality or otherwise takes retaliatory action against a whistleblower.
Thailand
In May 2024, Thailand’s National Anti-Corruption Commission recommended charges against four former executives of Thai state-owned oil and gas company PTT Exploration and Production Public Co. Ltd. for their alleged involvement in receiving bribes from Rolls-Royce Motor Cars Ltd. Thai authorities initiated their investigation following Rolls-Royce’s January 2017 FCPA resolution with DOJ, as we reported in our 2017 Mid-Year FCPA Update.
Vietnam
In April 2024, a court in Vietnam sentenced My Lan Truong, the chairwoman of real estate developer Van Thinh Phat Holdings Group, to death after finding her guilty of embezzling 304 trillion dong (~ $12.4 billion) from Saigon Commercial Bank over a period of 11 years. The court accused Lan of utilizing shell companies and individual proxies to exert effective control over the bank and approve hundreds of loans for herself, as well as paying bribes to ensure her loans were not scrutinized. Lan was separately convicted in October 2024 on financial fraud charges including obtaining property by fraud, money laundering, and illegal cross-border money transfers. In December 2024, a court ruled that Lan may be spared the death penalty and instead receive a life prison sentence if she repays three-fourths of the embezzled funds.
Australia
In March 2024, the Australian parliament passed the Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023, criminalizing the corporate failure to prevent bribery of foreign officials. The new law came into effect in September 2024 and imposes criminal liability on Australian companies where an “associate” of the company bribes a foreign official to obtain profit or gain in favor of the company. The term “associate” is broadly defined to include an employee, contractor, agent, subsidiary or other controlled entity, or a person who otherwise performs services on behalf of the company. Under the law, companies can be held strictly liable for the conduct of their associates; for example, the prosecution need not prove that the associate acted within their scope of their authority or that the company authorized or intended a bribe payment to be made. Similar to the UK “failure to prevent bribery” offense on which this law is modeled, however, the Australian law also introduces an affirmative “adequate procedures” defense.
Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these issues. We have more than 110 attorneys with FCPA experience, including a number of former federal prosecutors and SEC officials, spread throughout the firm’s domestic and international offices. Please contact the Gibson Dunn attorney with whom you work, or any of the following leaders and members of the firm’s Anti-Corruption & FCPA practice group:
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F. Joseph Warin (+1 202.887.3609, [email protected])
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New York
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Los Angeles
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San Francisco
Winston Y. Chan (+1 415.393.8362, [email protected])
Thad A. Davis (+1 415.393.8251, [email protected])
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Palo Alto
Benjamin Wagner (+1 650.849.5395, [email protected])
London
Patrick Doris (+44 20 7071 4276, [email protected])
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Paris
Benoît Fleury (+33 1 56 43 13 00, [email protected])
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Munich
Katharina Humphrey (+49 89 189 33 155, [email protected])
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Hong Kong
Oliver D. Welch (+852 2214 3716, [email protected])
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Singapore
Oliver D. Welch (+852 2214 3716, [email protected])
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