In the continuing investigation of bribery at an Orange County, California manufacturer of service control valves for the global energy and oil and gas industries, the DOJ announced on April 8, 2009 that it had charged six former executives with FCPA violations. This announcement came months after the DOJ had secured guilty pleas to FCPA conspiracy charges from two other former executives of the company, as was reported in White & Case's March 2009 client advisory. Collectively, this represents the largest number of individuals indicted under the FCPA in one matter, and is further evidence of the DOJ's continued focus on prosecuting individuals for FCPA violations. (Note that the valve company has not been charged despite the indictment of eight of its former executives.)
The latest charges allege that in a four-year period from 2003 to 2007, the six defendants conspired to pay 236 bribes totaling approximately US$4.9 million to foreign officials at state-owned entities in 30 countries including China, Korea, Malaysia and the United Arab Emirates. The DOJ estimates that the company realized more than US$46.5 million in sales as a result of these improper payments.
Along with one count of conspiracy to violate the FCPA—which carries a maximum penalty of five years in prison and a fine of the greater of US$250,000 or twice the value gained or lost—each of the six defendants is charged with one or more counts of violating the FCPA—carrying a maximum penalty per count of five years in prison and a fine of the greater of US$100,000 or twice the value gained or lost. All of the defendants are also charged with conspiracy to violate the Travel Act, for traveling in interstate or foreign commerce for the purpose of bribing officers and employees of foreign and domestic privately owned companies. Additionally, one defendant, the valve company's former director of sales for China and Taiwan and the wife of the former CEO, faces one count of destruction of records in connection with a matter within the jurisdiction of a department or agency of the United States, which could result in 20 years imprisonment and a fine of US$250,000. These additional charges are further examples of the DOJ's willingness to use the full panoply of criminal sanctions in FCPA investigations.