Corporate Enforcement Since 2006

Yesterday we posted our 2011 FCPA enforcement index. Today we look at corporate enforcement for the years from 2006.

Here goes:

In 2011, 15 companies paid $508.6 million in criminal and civil penalties, and in disgorgement and interest.

In 2010, 23 companies paid $1.8 billion.

In 2009, 11 companies paid $644 million.

In 2008, 11 companies paid $890.

In 2007, 15 companies paid $128 million.

And in 2006, 4 companies paid $86.25 million.

Here's a breakdown (our first) for 2007 and 2006.

For 2007:

Aibel -- $4.2 million

Baker Hughes -- $44 million

Bristow Group -- nil

Chevron -- $28 million

Delta Pine -- $300,000

Dow Chemical -- $325,000

El Paso Corporation -- $2.25 million

Immucor -- nil

Ingersoll-Rand -- $4.2 million

Lucent -- $1.5 million

Omega Advisers -- $500,000

Paradigm -- $1 million

Textron -- $3.5 million

Vetco Gray -- $26 million

York -- $12 million

And for 2006:

Oil States -- nil

Schnitzer Steel -- $15.25 million

Statoil -- $21 million

Tyco -- $50 million (plus $1 disgorgement)*

*Most of the charges against Tyco were for securities law violations other than FCPA offenses. The final judgment didn't allocate the penalties.

2011 Enforcement Index

Fifteen companies settled FCPA enforcement actions in 2011 by paying a total of $508.6 million.

(In 2010, 23 companies paid $1.8 billion. In 2009, 11 companies paid $644 million. In 2008, 11 companies paid $890.)

Three cases this year made it into the top ten -- JGC, Magyar Telekom, and Johnson & Johnson. J&J also left the list before the year ended.

While 2011 was slower on the corporate side, it was busy for individuals in all categories -- indictments, trials, sentences, dismissals, mistrials, and appeals.

The 2011 FCPA enforcement index looks like this:

Organizations (countries involved) U.S. enforcement agencies / financial penalties including fines, disgorgement, and interest:

Aon Corporation (Costa Rica, Egypt, Vietnam, Indonesia, the United Arab Emirates, Myanmar, and Bangladesh) DOJ, SEC / $16.2 million

Armor Holdings Inc. (United Nations contracts) DOJ, SEC / $16 million

Ball Corporation (Argentina) SEC / $300,000

Bridgestone Corporation (Mexico) DOJ / $28 million for antitrust and FCPA violations; FCPA component was $22 million

Comverse Technology Inc. (Greece) DOJ, SEC / $2.8 million

Diageo plc (India, Thailand, South Korea) SEC / $16.4 million

IBM (South Korea and China) SEC / $10 million

JGC Corporation (Nigeria) DOJ / $218.8 million

Johnson & Johnson (Greece, Poland, Romania, United Nations Oil for Food Program) DOJ, SEC / $70 million

Lindsey Manufacturing (Mexico) DOJ, indictment dismissed by judge after jury trial and conviction, because of prosecutorial misconduct

Magyar Telecom and majority owner Deutsche Telekom (Macedonia, Montenegro) DOJ, SEC / $95 million

Maxwell Technologies Inc. (China) DOJ, SEC / $14.3 million

Rockwell Automation Inc. (China) SEC / $2.8 million

Tenaris (Uzbekistan) SEC / $9 million

Tyson Foods Inc. (Mexico) DOJ, SEC / $5.2 million

Watts Water Technologies, Inc. (China) SEC / $3.7 million

Individuals indicted, tried, or sentenced (includes cases of money-laundering only in FCPA-related actions):

Angela Aguilar (Lindsey Manufacturing) DOJ, money-laundering conviction vacated after dismissal of indictments against Lindsey and Lee defendants.

Daniel Alvirez (Africa sting) DOJ, pleaded guilty to two counts of conspiracy to violate the FCPA, sentencing pending

Andras Balogh (Magyar Telekom) SEC, charged in civil complaint

Andrew Bigelow (Africa sting) DOJ, criminal trial ended in mistrial

Ulrich Bock (Siemens) DOJ, SEC, criminal and civil charges including conspiracy and substantive FCPA offenses, money-laundering, and wire fraud

Frederic Bourke (Azerbaijan privatization) DOJ, lost appeal and motion for new trial, will now serve year-and-a-day prison sentence and pay $1 million criminal fine

Manuel Caceres (Latin Node Inc.) pleaded guilty to conspiracy to violate the FCPA, sentencing pending

Leesen Chang (Watts Water Technologies, Inc.) SEC, administrative order, $25,000 penalty

Washington Vasconez Cruz (Cinergy Telecommunications Inc.) DOJ, charged with one count of conspiracy to violate the FCPA and to commit wire fraud, six counts of FCPA violations, one count of conspiracy to commit money laundering, and 19 counts of money laundering

Miguel Czysch (Siemens) DOJ, SEC, criminal and civil charges including conspiracy and substantive FCPA offenses, money-laundering, and wire fraud

Joel Esquenazi (Terra Telecommunications Corp.) DOJ, convicted in criminal trial, sentenced to 15 years in prison

Haim Geri (Africa sting) DOJ, pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act, sentencing pending

Stephen G. Giordanella (Africa sting) DOJ, acquitted after judge dismissed conspiracy count, the only charge the defendant faced

Jorge Granados (Latin Node Inc.) DOJ, sentenced to 46 months in prison

Paul W. Jennings (Innospec Inc.) SEC, $300,000

Steve K. Lee (Lindsey Manufacturing) DOJ, indictment dismissed by judge after jury trial AND conviction, because of prosecutorial misconduct

Keith Lindsey (Lindsey Manufacturing) DOJ, indictment dismissed by judge after jury trial AND conviction, because of prosecutorial misconduct

Tamas Morvai (Magyar Telekom) SEC, charged in civil complaint

Ousama Naaman (Innospec) DOJ / SEC sentenced to thirty months in federal prison and fined $250,000 after guilty plea

Pankesh Patel (Africa sting) DOJ, criminal trial ended in mistrial

Antonio Perez (Terra Telecommunications Corp.) DOJ, sentenced to two years in prison and ordered to forfeit $36,375

Bernd Regendantz (Siemens) SEC, settled civil charges by paying a civil penalty of $40,000

Eberhard Reichert (Siemens) DOJ, criminal and civil charges including conspiracy and substantive FCPA offenses, money-laundering, and wire fraud

Flavio Ricotti (Control Components Inc.) pleaded guilty to a single count of conspiracy to violate the Foreign Corrupt Practices Act and the Travel Act, sentencing pending

Amadeus Richers (Cinergy Telecommunications Inc.) DOJ, charged with one count of conspiracy to violate the FCPA and to commit wire fraud, six counts of FCPA violations, one count of conspiracy to commit money laundering, and 19 counts of money laundering

Carlos Rodriguez (Terra Telecommunications Corp.) DOJ, convicted in criminal trial, sentenced to 7 years in prison

Manuel Salvoch ( Latin Node Inc.) DOJ, pleaded guilty  to one count of conspiracy to violate the FCPA, sentencing pending

Carlos Sergi (Siemens) DOJ, SEC, criminal and civil charges including conspiracy and substantive FCPA offenses, money-laundering, and wire fraud

Uriel Sharef (Siemens) DOJ, SEC, criminal and civil charges including conspiracy and substantive FCPA offenses, money-laundering, and wire fraud

Stephan Signer (Siemens) DOJ, SEC, criminal and civil charges including conspiracy and substantive FCPA offenses, money-laundering, and wire fraud

Leo Winston Smith (Pacific Consolidated Industries) DOJ, sentenced in December 2010, sentence disclosed January 2011, six months in prison followed by six months of home confinement

Jonathan Spiller (Africa sting) DOJ, pleaded guilty to one count of conspiracy to violate the FCPA, sentencing pending

Herbert Steffen (Siemens) DOJ, SEC, criminal and civil charges including conspiracy and substantive FCPA offenses, money-laundering, and wire fraud

Elek Straub (Magyar Telekom) SEC, charged in civil complaint

Jeffrey Tesler (KBR and TSKJ consortium agent) DOJ, pleaded guilty to one count of conspiracy and one count of violating the FCPA, Tesler agreed to forfeit $149 million, final sentencing pending

Lee Allen Tolleson (Africa sting) DOJ, criminal trial ended in mistrial

Andres Truppel (Siemens) DOJ, SEC, criminal and civil charges including conspiracy and substantive FCPA offenses, money-laundering, and wire fraud

Juan Pablo Vasquez (Latin Node Inc.) DOJ, pleaded guilty to conspiracy to the violate the FCPA

John Benson Weir (Africa sting) DOJ, criminal trial ended in mistrial

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Prior indexes are here:

2010 FCPA Enforcement Index

2009 FCPA Enforcement Index

2008 FCPA Enforcement Index

Our top stories of 2011 are here.

Sixty-Four Million Reasons To Comply

Since the start of 2008, 58 companies (by our count) have settled FCPA-related enforcement actions with the DOJ or SEC or both. Together they paid $3.74 billion in penalties, disgorgement, and interest -- an average of $64.5 million per enforcement action.

The yearly numbers break down this way:

In 2011 year-to-date, 13 companies have paid $405.6 million, for an average settlement of $31.2 million (including $28 million paid in an FCPA settlement that also included a price-fixing count).

In 2010, 23 companies paid $1.8 billion for an average settlement of $78 million.

In 2009, 11 companies paid $644 million, averaging $58.5 million per corporate FCPA enforcement action.

In 2008, 11 companies paid $890 million for an average of $80 million. Excluding Siemens' $800 million resolution, 10 companies paid $90 million for an average of $9 million (Siemens is included in the $64.5 million overall average for the period in question).

*     *     *

Managing compliance risks. More than 100 companies -- many of them global leaders -- took part in the Anti-Corruption Compliance Program Benchmarking Survey. The findings (available here) should help those seeking to assess or improve their compliance programs.

Enforcement Report For Q-3 '11

During the calendar quarter just ended, there were three corporate enforcement actions and two individual convictions. A defendant received one of the FCPA's longest jail sentences, the DOJ released three new FCPA-related indictments, and prosecutors dropped the appeal of a short FCPA prison term.

But the biggest news was the mistrial in the first Africa sting case. It's not an outright win for the defendants -- the government said it will retry them. Meanwhile, the trial of the second group of sting defendants started during the quarter.

Here's a complete rundown for Q-3:

DOJ / SEC Enforcement Resolutions

Armor Holdings Inc. (July 13) a military and law enforcement equipment company formerly listed on the NYSE and now owned by BAE Systems agreed to pay $16 million to resolve FCPA violations arising from bribes to secure U.N. contracts and covering up the payments. Armor will pay the DOJ a criminal penalty of $10.3 million and will disgorge $5.7 million to the SEC. Former Armor executive Jonathan Spiller was indicted with the 22 Africa sting defendants. He pleaded guilty earlier this year to conspiracy to violate the FCPA. He hasn't been sentenced.

Diageo plc (July 27) agreed to pay the SEC $16.4 million to resolve FCPA offenses that stretched over six years and involved bribes to foreign officials in India, Thailand, and South Korea. The London-based maker of many top liquor brands -- including Johnnie Walker and Windsor Scotch whiskeys -- paid $2.7 million in bribes through subsidiaries for sales and tax benefits.

Bridgestone Corporation (September 15) agreed to plead guilty and pay a $28 million criminal fine for its role in conspiracies to rig bids and make corrupt payments to foreign government officials in Latin America. The Tokyo-based maker of marine hose and other industrial products was charged with conspiring to violate the Sherman Act and the Foreign Corrupt Practices Act. 

Convicted

Joel Esquenazi (August 4), 52, of Miami, Florida was convicted in the Haiti Telco case of one count of conspiracy to violate the FCPA and commit wire fraud, seven substantive FCPA counts, one count of money laundering conspiracy, and twelve counts of money laundering. Esquenazi was the president of Miami-based Terra Telecommunications Corp. Sentencing is pending.

Carlos Rodriguez (August 4), 55, of Davie, Florida, was tried and convicted on the same counts with Joel Esquenazi in the Haiti Telco case (see above). Rodriguez was the executive vice president of Terra Telecommunications Corp. Sentencing is pending.

Mistrial Declared

Pankesh Patel, Andrew Bigelow, John Benson Weir, and Lee Allen Tolleson (July 7) The judge in the first Africa sting trial declared a mistrial after the jury deliberated five days without reaching a verdict. The defendants were charged with conspiracy to violate the FCPA, violating the FCPA, conspiracy to commit money laundering, and aiding and abetting. They also faced a forfeiture count. The government said it will retry them.

Indicted

Cinergy Telecommunications Inc. (July 13), a privately-held telecommunications company incorporated in Florida, was charged with one count of conspiracy to violate the FCPA and to commit wire fraud, six counts of FCPA violations, one count of conspiracy to commit money laundering, and 19 counts of money laundering, in connection with alleged bribes to Haitian government officials.

Washington Vasconez Cruz (July 13), 63, of Miami, the president of Cinergy, was charged with one count of conspiracy to violate the FCPA and to commit wire fraud, six counts of FCPA violations, one count of conspiracy to commit money laundering, and 19 counts of money laundering.

Amadeus Richers (July 13), 60, of Pembroke Pines, Florida and Brazil, a former director of Cinergy, was charged with one count of conspiracy to violate the FCPA and to commit wire fraud, six counts of FCPA violations, one count of conspiracy to commit money laundering, and 19 counts of money laundering.

Sentenced

Jorge Granados (September 7), 55, former CEO of Florida-based telecommunications company Latin Node Inc., was sentenced in federal court in Miami to 46 months in prison for bribing government officials in Honduras. He pleaded guilty in May to conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act by paying more than $500,000 in bribes.

Appeal Dropped

Gerald and Patricia Green (August 24) The government dropped its appeal of the six-month prison sentences already served by the Hollywood producer and his wife. Gerald Green, 79, and his wife Patricia, 56, were released from federal custody in May. An LA jury convicted them in 2009 of FCPA and money laundering. The Greens paid $1.8 million in bribes to Juthamas Siriwan, then-governor of the Tourism Authority of Thailand, in exchange for $13.5 million in contracts to produce the Bangkok film festival.

Trial Commenced

Patrick Caldwell, John Mushriqui, Jeana Mushriqui, Stephen Giordanella, John Godsey, and Marc Morales (September 28), the second batch of Africa sting defendants to go on trial face one count of conspiracy to violate the FCPA. Except for Giordanella, they also face multiple substantive FCPA counts. The government has included a forfeiture count against all of them.

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Our Enforcement Report for Q-1 '11 is here and for Q-2 '11 is here.

Our 2010 FCPA Enforcement Index is here, the 2009 Index can be found here, and our 2008 Index here.

Our Reference Section (September 2011)

We're always glad when people stop by to do some research.

Here are some of the most popular reports, indexes, and lists.

The Category B lists are updated from time to time. That's why we've put the date in the title. You'll be able to find the most current versions by searching the Archive on the top menu bar for 'our reference section,' 'top ten,' or 'top ten disgorgements.'

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Category A

Enforcement Report for Q-2 '11

Enforcement Report for Q-1 '11

2010 FCPA Enforcement Index

2009 FCPA Enforcement Index

2008 FCPA Enforcement Index

Category B

Top Ten FCPA Enforcement Actions

Top Ten FCPA Disgorgements

Counsel To The Top Ten

2011 Watch List

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