The opportunity to become a Whistleblower, and expose Foreign Corrupt Practices Act fraud, was created under The Dodd-Frank Wall Street Reform and Protection Act. Enforced jointly by the Department of Justice and the Securities and Exchange Commission, the FCPA has been tremendously successful at exposing fraud. Created in 1977, the FCPA helps to expose the bribery of foreign government officials and violations of accounting provisions. The anti-bribery provisions of the FCPA apply to U.S. and foreign issuers, and both public and private companies.
FCPA violations have occurred across every industry imaginable, including entertainment, oil & gas, defense, pharmaceuticals, medical device, telecommunications, engineering, technology, electronics and chemicals. Warning signs of violations of the anti-bribery and accounting provisions of the FCPA often include some combination of the following:
- gifts, entertainment and charitable contributions lacking a clear and legal business purpose;
- high volumes of cash transactions, payments from out of country bank accounts or payments to risky vendors; and
- significant payments to agents and consultants with no prior relationship, oftentimes with vague references such as “government expenses”, “consulting”, “for services rendered”, or other similarly nondescript justifications.
FCPA fraud settlements include:
Daimler AG Pays $185 Million to Resolve FCPA Investigations
Settlement covered hundreds of improper payments worth tens of millions of dollars, in at least 22 countries. Payments were made to foreign officials to obtain vehicle contracts, and occurred over a decade.
- In Russia, Daimler over-invoiced customers, with the excess amounts being passed on to government officials.
- In China, Daimler paid commissions, arranged for travel and provided gifts to government officials for the sale of vehicles to Chinese government customers.
- In Iraq, Daimler violated the oil-for-food program by inflating contract prices by 10%, paying this 10% excess as a commission to the Iraqi government, while characterizing this payments as “after sales service fees”, when in fact it was an outright bribe.
Technip S.A. Paid $338 Million Related to Nigerian FCPA Case
Settled allegations that it participated in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement and construction contracts to build liquefied natural gas facilities.
- To conceal the bribes, Technip entered into consulting and services agreements that lacked any business purpose besides graft and influence peddling. Over the life of the illegal scheme, Technip utilized U.K. and Japanese agents to transfer approximately $182 million in bribes to Nigerian government officials.
- The joint venture building the liquefied natural gas plant consisted of Technip and three other companies: Snamprogetti Netherlands B.V., Kellogg, Brown and Root and JGC Corporation. Collectively, the FCPA civil and criminal fines paid by these 4 companies related to this single project were approximately $1.5 billion.
Johnson & Johnson Paid $70 Million to Settle FCPA Violations in Greece, Iraq, Poland and Russia
Settled allegations that Johnson & Johnson and numerous of its subsidiaries, including DePuy International, violated the Foreign Corrupt Practices Act by paying bribes to foreign officials related to the sale of their medical devices and pharmaceuticals.
- In Greece, Poland and Romania, they paid bribes to publicly-employed doctors, pharmacists and pharmacists to induce them to prescribe Johnson & Johnson pharmaceuticals and utilize its medical devices.
- The bribes were paid through various means, including distributors and third-parties who recorded them as commission payments, travel sponsorships and cash.
- Two other Johnson & Johnson subsidiaries, Cilag AG and Jannsen Pharmaceutica, paid kickbacks to the Iraqi government under the U.N. Oil for Food Program to win contracts for humanitarian supplies.