Despite the Trump Administration, the Foreign Corrupt Practices Act (FCPA) has again demonstrated its reach and staying power. An article in Law360 reported that this month, a federal jury in Miami convicted Carl Alan Zaglin, a Georgia businessman and the former CEO of military clothing supplier Atlanco, on all counts of FCPA and money laundering charges. The case centered on a scheme to bribe Honduran officials in exchange for lucrative contracts with the Honduran National Police, worth over $10 million.
For the compliance professional, the Zaglin case serves as a stark reminder: the risks of bribery and corruption remain high, particularly in international contracting involving law enforcement and defense agencies. But it also provides clear compliance lessons that organizations can implement today. Finally, the lessons from this case would make a great presentation to the Board of Directors.
The Case in Brief
Zaglin, as majority owner and CEO of Atlanco, worked with Tactical Products Group and intermediaries to secure uniform contracts with the Honduran government. Prosecutors demonstrated that beginning in 2015, Atlanco executives entered into sham “brokerage agreements” with a Florida-based intermediary, Aldo Nestor Marchena. Marchena then routed more than $2 million in illicit payments through offshore accounts in Belize and the U.S., as well as direct cash payments, to Honduran officials.
Although Zaglin argued that the contracts were awarded before the payments were made, the jury rejected this defense. The DOJ’s position was clear: the payments were designed to ensure favorable treatment and sustain Atlanco’s business advantage. Acting Assistant Attorney General Matthew R. Galetto underscored the broader message: bribing officials undermines the rule of law and distorts competitive markets.
The outcome? A guilty verdict on conspiracy to violate the FCPA, substantive FCPA violations, and conspiracy to commit money laundering. Zaglin now faces sentencing in December 2025. His co-conspirators, including Marchena and two former Honduran officials, pleaded guilty earlier this year.
Why This Case Matters
On the surface, the Zaglin conviction is yet another entry in the DOJ’s FCPA enforcement docket. Of course, this case was brought under the prior Biden Administration, but the Trump Administration did allow it to move forward. But peel back the layers, and we find enduring themes that every company cannot ignore:
- The role of third-party intermediaries. Once again, the FCPA violation flowed through a so-called “agent” who submitted fake invoices.
- The false comfort of after-the-fact rationalizations. Zaglin’s defense—that contracts were awarded before the payments—shows the lengths to which executives will stretch logic to justify bribes.
- The focus on high-risk sectors. Defense, law enforcement, and government procurement remain top-tier corruption risks.
This case could have been prevented with a stronger compliance program, rigorous third-party due diligence, and an empowered compliance function. Or even perhaps a CEO who was committed to doing business ethically and in compliance with the FCPA
Five Compliance Lessons from the Zaglin Conviction
1. Third Parties Are Still the Achilles’ Heel
The Atlanco scheme revolved around Marchena, the intermediary who served as the conduit for illicit payments. Atlanco executives papered the arrangement with sham brokerage agreements—classic red flags. Fake invoices, offshore transfers, and large unexplained payments are textbook hallmarks of corruption risk.
Lesson for compliance professionals: Never take third-party relationships at face value. Conduct rigorous due diligence, both at onboarding and throughout the relationship. Look for the red flags: lack of a clear value proposition, offshore accounts, and vague consulting services. Ensure your contracts include audit rights, anti-corruption certifications, and termination provisions that are enforceable and legally binding.
2. Timing Does Not Erase Intent
Zaglin’s defense hinged on timing, that contracts were awarded before bribes were paid. However, FCPA enforcement is not solely about timing; it is about corrupt intent. Payments made to reward past contracts or to secure future business still fall squarely within the statute. For compliance professionals, the lesson is clear. You must train executives and sales teams to understand that bribes are not limited to pre-award influence. “Thank-you” payments, facilitation to speed up processes, or post-award cash still qualify as corrupt payments. While domestically, the US Supreme Court allows such gratuities, they remain illegal under the FCPA.
3. Money Laundering Is Often the Companion Charge
Prosecutors alleged that over $2 million in bribes were laundered through accounts in Belize and the United States. The money laundering charge not only increases potential penalties but also expands the jurisdiction and investigative tools available to prosecutors.
For compliance professionals, the lesson is clear. Compliance cannot be siloed. Anti-corruption compliance must integrate with anti-money laundering (AML) monitoring. Cross-functional teams, including compliance, finance, and legal, should collaborate to identify unusual payments, offshore transfers, or the use of cash. A payment flagged by AML teams may also be a corruption risk.
4. High-Risk Industries Demand Higher Controls
This case involved contracts with a foreign national police force. Defense, security, and law enforcement procurement are notoriously high-risk sectors, given their reliance on government contracts, large transaction values, and political sensitivities. For compliance professionals, the lesson is clear. Never forget that sector risk matters. Indeed, it was one of the risks identified in the FCPA Resource Guide, 1st edition, and brought forward into the 2nd edition. A compliance program in high-risk industries must include enhanced controls—more detailed due diligence, additional documentation, and heightened oversight. One-size-fits-all compliance will not work. The higher the risk, the higher the controls must be.
5. DOJ Will Pursue Trials, Not Just Settlements
It is worth noting that Zaglin was the only defendant to go to trial; his co-conspirators pled guilty. The DOJ secured convictions on every count. The case sends a clear message: the government will not shy away from trials, even in complex international bribery cases. For compliance professionals, the lesson is clear. Even under this Administration, the enforcement risk is real. Companies cannot gamble on the odds of non-detection. The reputational damage, financial costs, and operational disruption of an FCPA trial can devastate a business.
Final Thoughts
The conviction of Carl Alan Zaglin underscores the DOJ’s continuing focus on international corruption. For compliance professionals, it serves as yet another reminder that the fundamentals — third-party management, AML integration, sector-specific risk controls, and empowered compliance — remain non-negotiable. They are essential.
As Acting Assistant Attorney General Galetto put it: bribery undermines the rule of law and distorts markets. Compliance professionals must be the guardians against that distortion. By learning from cases like this, organizations can not only avoid costly enforcement actions but also compete on a level playing field where integrity, not bribery, wins the contract.
