The first half of 2013 has witnessed a modest increase in the Department of Justice and Securities Exchange Commission’s enforcement of the FCPA, when compared to the relatively few enforcement actions brought in 2012. In addition to continued FCPA enforcement against corporations, the second quarter of 2013 displayed the DOJ’s willingness to criminally prosecute individuals. Through the second quarter of 2013, the DOJ brought twelve FCPA enforcement actions and the SEC brought four. At this same point last year, DOJ had brought nine actions and the SEC had brought five. The table below highlights the number of FCPA enforcement actions initiated in recent years:

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Although the total number of FCPA enforcement actions initiated thus far in 2013 is far below the record number of matters brought by DOJ and the SEC in 2010, there have still been several significant matters brought in the year to date, including a $398 million settlement with Total S.A., which ranks as the fourth largest FCPA settlement in history. Below is a summary of the cases that have been filed this year.

2013 Corporate Enforcement Actions: [1]

  • Total S.A. (5/29/13) - SEC charged the France-based oil and gas company for paying bribes to intermediaries of an Iranian government official who then exercised his influence to help the company obtain valuable contracts to develop oil and gas fields. Total agreed to pay $398 million to settle SEC and criminal charges.
  • Ralph Lauren Corporation (4/22/13) - SEC announced a non-prosecution agreement (NPA) with Ralph Lauren Corporation in which the company will disgorge more than $700,000 in illicit profits and interest obtained in connection with bribes paid by a subsidiary to government officials in Argentina from 2005 to 2009.
  • Parker Drilling Company (4/16/13) - SEC charged the worldwide drilling services and project management firm with violating the FCPA by authorizing improper payments to a third-party intermediary in order to entertain Nigerian officials involved in resolving the company's customs disputes. Parker Drilling agreed to pay $4 million to settle the SEC's charges.
  • Koninklijke Philips Electronics (4/5/13) - SEC charged the Netherlands-based health care company with FCPA violations related to improper payments made by employees at its Polish subsidiary to health care officials in Poland. Philips agreed to pay more than $4.5 million to settle the charges.

2013 Criminal Enforcement Actions against individuals: [2]

  • Direct Access Partners, LLC Employees (5/7/2013) - Alberto Clarke Bethancourt and Jose Alejandro Hurtado, two brokers affiliated with the New York brokerage firm Direct Access Partners, LLC, were charged with paying at least $5 million in bribes to an official at a state-owned Venezuelan bank, to win bond trading work. In June, Ernesto Lujan, the former head of the Miami office of Direct Access Partners, was arrested for conspiracy to bribe an officer in connection to Bethancourt and Hurtado.
  • Alstom SA Executives (4/16/2013) – According to a DOJ Press Release, Frederic Pierucci, an Alstom executive and previous Vice President of Global Sales, was charged with “conspiring to violate the FCPA and to launder money, as well as substantive charges of violating the FCPA and money laundering.” Additionally former Alstom executive David Rothschild pled guilty on November 2, 2012 to criminal information charging one count of conspiracy to violate the FCPA. Moreover, in May of 2013, a third executive, William Pomponi, was likewise indicted for conspiracy to violate the FCPA and to launder money.
  • Frederic Cilins (4/15/2013) – DOJ announced the arrest of Frederic Cilins for allegedly obstructing an FCPA-related grand jury investigation into whether an Israeli mining company offered bribes to an official to secure valuable concession rights in the Republic of Guinea. After seeking information from the deceased official’s wife, the DOJ persuaded her to wear a wire to record conversations in Cilins sought to pay the wife to destroy evidence.
  • Biz Jet Executives (4/5/2013) - According to the DOJ indictment, between 2004 and 2010 three executives and one employee – Peter Dubois, Jald Jensen, Bernd Kowalewski, and Neal Uhl – conspired to bribe Latin American government officials to secure contracts from government air fleets in Brazil, Mexico and Panama. BizJet voluntarily disclosed the bribery scheme, earned extraordinary cooperation, and paid a fine of $11.8 million. Based on the company’s cooperation, the four individuals listed above were selected for prosecution.

If the first half of 2013 holds any indication, the second half of 2013 could reveal an increased focus on the criminal prosecution of individuals, as well as the potential for prosecution of executives and individuals whose corporations are already the focus of on-going corporate enforcement actions. We will continue to monitor and report on these developments, as well as provide insights into how DOJ and the SEC credit companies that provide timely disclosure of potential violations.