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Juiced Up Enforcement

For those who missed the FCPA enforcement news during the recent hyper-active stretch, here's what happened:

July 28 -- Label-maker Avery Dennison Corporation resolved civil and administrative charges brought by the Securities and Exchange Commission. The SEC filed settled enforcement actions in the United States District Court for the Central District of California charging Avery with violating the FCPA's books and records and internal controls provisions. In the administrative action, the SEC ordered Avery to disgorge $273,213 and $45,257 in prejudgment interest. In the federal civil action, Avery agreed to a final judgment requiring it to pay a civil penalty of $200,000.

July 30 -- Oil and gas driller Helmerich & Payne Inc. was hit with a $1 million criminal penalty by the Justice Department to settle Foreign Corrupt Practices Act violations related to improper payments to government officials in Argentina and Venezuela. The SEC ordered it to disgorge $320,604 plus prejudgment interest of $55,077.22.

July 31 -- The Justice Department announced that valve-maker Control Components Inc. (CCI) of Rancho Santa Margarita, California pleaded guilty to violating the anti-bribery provisions of the Foreign Corrupt Practices Act (15 U.S.C. §78dd-2) and the Travel Act (18 U.S. C. §1952). CCI admitted bribing foreign officials in a decade-long scheme to secure contracts in about 36 countries. CCI's plea agreement requires it to pay a criminal fine of $18.2 million, implement an anti-bribery compliance program, retain a compliance monitor for three years, serve a three-year term of organizational probation, and cooperate with the DOJ's ongoing investigation.

July 31 -- The SEC filed a settled enforcement against Nature's Sunshine Products Inc. (NSP), its Chief Executive Officer Douglas Faggioli. 54, and its former Chief Financial Officer Craig D. Huff, 53. According to the SEC, the charges relate to cash payments made in 2000 and 2001 by the Brazilian subsidiary of NSP, a manufacturer of nutritional and personal care products, to import unregistered products into Brazil and the subsequent falsification of its books and records to conceal the payments.

July 31 -- The Justice Department said a Canadian citizen has been indicted for his alleged role in an eight-year conspiracy to defraud the United Nations Oil for Food Program (OFFP) and to bribe Iraqi government officials in connection with the sale of a chemical additive used in refining leaded fuel. Ousama Naaman, 60, of Abu Dhabi, United Arab Emirates, was indicted on Aug. 7, 2008, in U.S. District Court for the District of Columbia. The indictment charges Naaman with one count of conspiracy to commit wire fraud and to violate the Foreign Corrupt Practices Act and two counts of violating the FCPA.

August 4 -- The year's third Foreign Corrupt Practices Act trial started when the husband-and-wife movie producers arrested in 2007 faced a federal jury in Los Angeles. Prosecutors allege that Gerald and Patricia Green paid more than $1.8 million in bribes to a former governor of the Tourism Authority of Thailand in return for $14 million in contracts to stage the Bangkok Film Festival. In July, Frederic Bourke was convicted of conspiracy to violate the FCPA. And . . .

August 5 -- William Jefferson, the former nine-term congressman from Louisiana, was found guilty of 11 of 16 corruption charges by a federal jury, including conspiracy to violate the Foreign Corrupt Practices Act. He was acquitted of a substantive charge of violating the FCPA. He was also found guilty of soliciting and taking bribes, depriving citizens of honest services, money laundering and racketeering, and conspiracy to solicit bribes.

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There's always more to learn. Concerning state-law violations underlying Travel Act charges, a reader has pointed out that the CCI indictments weren't the first. He or she cited U.S. v. David H. Mead and Frerik Pluimers, (Cr. 98-240-01) D.N.J., Trenton Div. 1998, where defendant Mead was convicted following a jury trial of conspiracy to violate the FCPA and the Travel Act (incorporating New Jersey's commercial bribery statute) and two counts each of substantive violations of the FCPA and the Travel Act. The reader said there have been other similar cases. For us (and others we've heard from), it's been a prosecutorial tactic hidden in plain sight. Our eyes are now open. And we say again: Compliance programs shouldn't overlook the dangers of bribes to private parties overseas.

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We remember laying on our back as a kid, on clear nights in New Hampshire, watching the annual Perseid meteor shower. This week we were city-bound and missed the show. Maybe next year.

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We're outta here for a three-day weekend. Thanks to everyone who helped make this another great week. See you Monday.
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Full post as published by The FCPA Blog on August 12, 2009 (boomark / email).