FCPA enforcement report for Q2 2016
Friday, July 1, 2016 at 9:18AM
Richard L. Cassin in Akamai, Analogic, Declinations, Direct Access Partners, Key Energy Services Inc., Las Vegas Sands, Nortek, enforcement report

During the second calendar quarter, there were four corporate FCPA enforcement actions and eight individual resolutions (seven related to Direct Access Partners). There were also three guilty pleas by individuals.

Akamai Technologies and Nortek Inc. received SEC non-prosecution agreements. They also received DOJ declinations under the new FCPA Pilot Program.

Key Energy received the other declination during the quarter.

 The DOJ said in court filings that Biomet breached a 2012 deferred prosecution agreement.

Here's the full report for the second quarter of 2016:

DOJ / SEC Enforcement Resolutions

Las Vegas Sands Corp. (April 7) paid the SEC a $9 million penalty to settle charges that it violated the Foreign Corrupt Practices Act by failing to properly authorize or document millions of dollars in payments to a consultant hired to help it do business in China and Macau.

Iuri Rodolfo Bethancourt (April 8) of Direct Access Partners settled SEC charges related to bribes paid to a former official of a Venezuelan state-owned bank. A court judgment permanently enjoined Bethancourt from violating securities laws.

Benito Chinea (April 8) of Direct Access Partners settled SEC charges related to bribes paid to a former official of a Venezuelan state-owned bank. A court judgment permanently enjoined Chinea from violating securities laws. He was ordered to pay $42.5 million in disgorgement and prejudgment interest. The disgorgement and prejudgment interest were deemed satisfied by forfeiture orders entered in parallel criminal cases.

Tomas Alberto Clarke Bethancourt (April 8) of Direct Access Partners settled SEC charges related to bribes paid to a former official of a Venezuelan state-owned bank. A court judgment permanently enjoined Clarke from violating securities laws. He was ordered to pay $42.5 million in disgorgement and prejudgment interest. The disgorgement and prejudgment interest were deemed satisfied by forfeiture orders entered in parallel criminal cases.

Joseph DeMeneses (April 8) of Direct Access Partners settled SEC charges related to bribes paid to a former official of a Venezuelan state-owned bank. A court judgment permanently enjoined DeMeneses from violating securities laws. He was ordered to pay $42.5 million in disgorgement and prejudgment interest. The disgorgement and prejudgment interest were deemed satisfied by forfeiture orders entered in parallel criminal cases.

Jose Alejandro Hurtado (April 8) of Direct Access Partners settled SEC charges related to bribes paid to a former official of a Venezuelan state-owned bank. A court judgment permanently enjoined Hurtado from violating securities laws. He was ordered to pay $42.5 million in disgorgement and prejudgment interest. The disgorgement and prejudgment interest were deemed satisfied by forfeiture orders entered in parallel criminal cases.

Ernesto Lujan (April 8) of Direct Access Partners settled SEC charges related to bribes paid to a former official of a Venezuelan state-owned bank. A court judgment permanently enjoined Lujan from violating securities laws. He was ordered to pay $42.5 million in disgorgement and prejudgment interest. The disgorgement and prejudgment interest were deemed satisfied by forfeiture orders entered in parallel criminal cases.

Haydee Leticia Pabon (April 8) of Direct Access Partners settled SEC charges related to bribes paid to a former official of a Venezuelan state-owned bank. A court judgment permanently enjoined Pabon from violating securities laws.

Akamai Technologies (June 7) agreed pursuant to an SEC non-prosecution agreement to pay about $652,000 in disgorgement and about $19,400 in interest to resolve FCPA offenses for bribes foreign subsidiaries paid to Chinese officials.

Nortek Inc. (June 7) agreed pursuant to an SEC non-prosecution agreement to pay about $291,000 in disgorgement and about $30,000 in interest to resolve FCPA offenses for bribes foreign subsidiaries paid to Chinese officials.

Analogic Corporation (June 21) and a foreign subsidiary paid $14.8 million to resolve FCPA offenses related to $20 million in improper payments in Russia and other countries. In a settlement with the SEC, Analogic paid $7.7 million in disgorgement and $3.8 million in prejudgment interest. Analogic’s Danish subsidiary, BK Medical ApS, entered into a non-prosecution agreement with the DOJ and agreed to pay a $3.4 million criminal penalty.

Lars Frost (June 21), BK Medical’s CFO from 2008 to 2011, paid the SEC a civil penalty of $20,000 to settle FCPA offenses.

Guilty Pleas

Dmitrij Harder (April 20), a Russian national living in Huntingdon Valley, Pennsylvania, pleaded guilty to two counts of violating the FCPA by bribing an official at the European Bank for Reconstruction and Development. Harder owned Chestnut Consulting Group Inc. Sentencing is set for July 21. He faces up to ten years in prison.

Roberto Enrique Rincon Fernandez (June 16) of The Woodlands, Texas, pleaded guilty in federal court in Houston to bribing officials at Venezuela’s state-owned energy company PDVSA to win work and speed up contract payments. He pleaded guilty to one count of conspiracy to violate the FCPA, one count of violating the FCPA, and one count of making false statements on his 2010 federal income tax return. Sentencing is set for September 30.

Moises Abraham Millan Escobar (June 16), of Katy, Texas, had his guilty plea unsealed. He entered the plea in January. He pleaded guilty to one count of conspiracy to violate the FCPA by bribing PDVSA officials.

Declinations

Key Energy Services Inc. (April 28) said the Justice Department informed the company that it has closed its FCPA investigation and won't bring an enforcement action. Houston-based Key Energy said in 2014 it was investigating allegations of possible bribery involving its Mexico operations.The company also said on April 28 this year it is negotiating with the SEC enforcement division to settle the agency's investigation.

Akamai Technologies (June 7) released a letter from the DOJ saying it wouldn't bring an enforcement action against the company. The declination was one of the first two the DOJ issued under its FCPA Pilot Program. Akamai also agreed pursuant to an SEC non-prosecution agreement to pay about $652,000 in disgorgement and about $19,400 in interest to resolve FCPA offenses for bribes foreign subsidiaries paid to Chinese officials.

Nortek Inc. (June 7) released a letter from the DOJ saying it wouldn't bring an enforcement action against the company. The declination was one of the first two the DOJ issued under its FCPA Pilot Program. Nortek also agreed pursuant to an SEC non-prosecution agreement to pay about $291,000 in disgorgement and about $30,000 in interest to resolve FCPA offenses for bribes foreign subsidiaries paid to Chinese officials.

DPA Breached

Biomet (June 6) breached a 2012 deferred prosecution agreement "based on conduct in Brazil and Mexico," according to a status report the DOJ filed in federal court on June 6. The filing also cited Biomet’s failure to maintain an effective FCPA compliance program. Biomet -- now Zimmer Biomet Holdings Inc. -- said earlier this year the three-year deferred prosecution agreement had been extended twice.

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Our FCPA enforcement report for Q1 2016 is here.

Our prior full-year enforcement reports are here:

2015 FCPA Enforcement Index

2014 FCPA Enforcement Index

2013 FCPA Enforcement Index 

2012 FCPA Enforcement Index

2011 FCPA Enforcement Index 

2010 FCPA Enforcement Index

2009 FCPA Enforcement Index 

2008 FCPA Enforcement Index

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He'll be the keynote speaker at the FCPA Blog NYC Conference 2016

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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