The first undercover Foreign Corrupt Practices Act (FCPA)
investigation in Department of Justice history culminated this week
with the indictments of nearly two dozen corporate executives and
employees and is a clear sign of the priority the federal
government has placed on enforcing the FCPA. The FCPA prohibits
U.S. companies from bribing foreign officials to obtain
business.
Announced by the U.S. Department of Justice, the indictments were
obtained after an investigation led by the Federal Bureau of
Investigation (FBI) that included an undercover sting operation. It
was the first time the federal government conducted a large
operation by using undercover law enforcement agents. The arrests,
according to DOJ's press release, represent "the largest
single investigation and prosecution against individuals in the
history of DOJ's FCPA enforcement."
Barnes & Thornburg LLP partner, Patrick M. Brady, who
represents clients with FCPA issues and has conducted numerous FCPA
investigations on behalf of U.S. companies, said that the latest
news should be a wakeup call to multinational companies.
"With this Indictment, the Justice Department has sent a
strong signal that individuals, not just corporations, are now
targets and the government will use any and all means available to
prosecute FCPA cases. In addition, the era of FCPA matters being
solely those of self-disclosure is over. Clients must now face the
reality of proactive investigations FCPA investigations in the U.S.
while also considering enforcement actions under local corruption
laws. Now more than ever, it is critical that global companies,
both publicly and privately held, consider protecting themselves
individually and their organizations from this type of
exposure."
This week's indictments involved the arrests of 22 people from
companies in the military and law enforcement products industry.
The undercover scheme involved the defendants agreeing to pay a
percentage of sales, or a "commission," to a minister of
defense for a country in Africa in exchange for a $15 million deal
to provide products to the country's presidential guard.
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