Tag: DOJ

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This Week in FCPA

This Week in FCPA-Episode 149 – the White Privilege edition

After a week hiatus, the lads are back. While debating white privilege and the Varsity Blues scandal, they also take a look at some of this week’s top compliance and ethics stories which caught their collective eyes this week.

  1. Guilty pleas begin in the Varsity Blues scandal. Antonio Blumberg report in the Huffington Post. For those who did not plead guilty, additional charges filed. Melissa Korn reports in the Wall Street Journal. Jay interviews Justin Paperny about the Varsity Blues sting, in Corporate Compliance Insights. For one of the best and fullest explanations of the white privilege component, see Caitlan Flanagan’s article in The Atlantic.
  2. Does your company lack integrity? Mike Volkov gives 5 signs which show it does, on Corruption, Crime and Compliance.
  3. Standard Chartered joins the $1 bn fine club. Emily Flitter reportsin the New York Times. Jon Rusch takes a deep dive in Dipping Through Geometries.
  4. What is the intersection of DD and AI? Merritt Smith considers in the FCPA Blog.
  5. OFAC enforcement action demonstrates need for pre-acquisition due diligence? Lawyers from Paul, Weiss in the NYU Compliance and Enforcement Blog.
  6. What is ethical AI? Tom Austin explores on the Analyst Syndicate.
  7. What are the shifting reasons for FCPA enforcement? Kevin Keller on the Global Anti-corruption Blog.
  8. What are the risks to investors in Uber? Shannon Bond reports in the Financial Times. (sub req’d)
  9. This week Tom explores the intersection of Shakespeare and Compliance through the lens of King Lear. Check out the following: Part 1-Innovation;Part 2– Changing Your Focus; Part 3– Engaging Your Audience; Part 4-a Different Interpretation; and Part 5-The Fool.The podcast is available on multiple sites: the FCPA Compliance Report, iTunes, JDSupra, Panoplyand YouTube. The Compliance Podcast Network is now also on Spotify and Corporate Compliance Insights.

Tom Fox is the Compliance Evangelist and can be reached at tfox@tfoxlaw.com. Jay Rosen is Mr. Monitor and can be reached at jrosen@affiliatedmonitors.com.
For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit our sponsor Affiliated Monitors at www.affiliatedmonitors.com.

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Shakespeare on Compliance

Shakespeare on Compliance – A Different Interpretation

I recently saw the performance of King Lear with Glenda Jackson as the mad king. It was a magnificent production and if you have the chance to see, I would certainly urge you to do so. The production had many interesting features and interpretations which seemed to be great entrees into several compliance topics. The play was directed by Sam Gold and it was scored by Phillip Glass but the star power was derived from Jackson as King Lear. It was a fabulous take on the story and one that will resonate directly to our turbulent times. Therefore, inspired by octogenarian Jackson and her performance, I am going to use King Lear as a deep dive into several compliance topics this week. In this episode, I want to discuss how Jackson, starring in the role of King Lear, added a new level of complexity, nuance and interpretation to the entire play.

Jackson is an octogenarian, the oldest person I have ever seen play Lear. Having seen my two parents age, I have some understanding that a person does not gain in stature, power or strength after they cross the 80-birthday mark. In other productions I have seen Lear roar and rail at Cordelia however, Jackson played it understated with nary a raised voice.
Even after the intermission, one of the most powerful scenes is when Lear carries of the lifeless body of Cordelia. Lear is in shock, bereaving and clearly quite mad. Yet to pull this off this scene requires an actress playing Cordelia to be of a size that the actor playing Lear can physically carry. Jackson is far too frail to do so. In this penultimate scene she sat on the stage with Cordelia’s head cradled in her lap, gently stroking her dead daughter’s hair. It was one of the most tender, loving and affectionate presentations I have ever seen in Lear.
The same week as the Mobile TeleSystems PJSC (MTS) Foreign Corrupt Practices Act (FCPA) enforcement action was announced there were two significant speeches by Department of Justice officials. The first was by Deputy Attorney General Rod Rosenstein. The second was by Assistant Attorney General Brian Benczkowski.
I want to focus on how both speeches explain what many found to be the stunning result Cognizant Technology Solutions Corporation (CTSH) received when it obtained a declination for its FCPA violations, both from the strategic and tactical levels.
Taken together, these two speeches made clear the reasons why the DOJ handed a declination to CTSH. The company engaged in the type of conduct, after it discovered its FCPA violation, that the DOJ wanted to reward and encourage going forward. Rosenstein made this crystal clear in his remarks, when he stated, “We aim to incentivize companies to report crimes, disgorge illegal proceeds, take remedial actions, and identify accountable officials so we can prosecute them – and do it all promptly. That will result in less corporate crime in the future.” This is not going soft on corporate crime; this is bringing corporate America into a role in the global fight against bribery and corruption.
Yet the Benczkowski speech had equal import for the compliance professional. The DOJ rewarded CTSH for not only its quick decision to self-disclose and then doing so; they also rewarded the company for having a robust pre-existing compliance program even though C-Suite executives led the bribery effort. This recognition by the DOJ makes even more important the corporate compliance function and a corporate compliance program to protect an organization if nefarious actors arise.

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FCPA Compliance Report

FCPA Compliance Report-Episode 425, the Fresenius FCPA Enforcement Action

In this episode I have back fan fav Mike Volkov. We break down the recently released Fresenius FCPA enforcement action. Some of the highlights from the podcast include:

  • A detailed discuss of the underlying facts.
  • What were the bribery schemes? Some old and some new but every compliance professional should study them.
  • How and why did Fresenius let the conduct go on for so long.
  • How was the company able to garner a NPA?
  • How did the company obtain its 40% discount for its fine and penalties?
  • Why was a monitor required?
  • What are the lessons learned from this enforcement action?

To take a deeper dive into the Fresenius FCPA enforcement action, check out Mike Volkov’s three-part series on his blog site, Corruption, Crime and Compliance. You can also check out my multi-part series on the FCPA Compliance Report.

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Daily Compliance News

Daily Compliance News: April 8, 2019-the changing spots edition

APRIL 8, 2019 BY TOM FOX

 

In today’s edition of Daily Compliance News:

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This Week in FCPA

This Week in FCPA-Episode 148 – the Hope Springs Eternal edition

As Opening Day near and the Astros are predicted to unseat Jay’s Red Sox to win the 2019 World Series, both lads are eternally hopeful for their hometown heroes. While debating this issue, they also take a look at some of this week’s top compliance and ethics stories which caught their collective eyes this week.

  1. Former Hong Kong official sentenced for FCPA violations. Harry Cassin reports in the FCPA Blog. Matthew Goldstein reports on how to reduce your FCPA sentence in the New York Times.
  2. SEC awards two whistleblowers $50MM. Kristin Broughton in the WSJ Risk and Compliance Journal. Matt Kelly takes a deep dive in Radical Compliance. Doug Cornelius gets snarky in Compliance Building. Jonathan Marks weighs in on Board and Fraud.
  3. Jonathan Ruschand William Weaver debate whether corruption can be measured. Both on the FCPA Blog.
  4. Was it fraud or was it incompetency? The HP v. Autonomy civil trial begins in London. The BBC
  5. What is the difference in whistleblowing and extortion? Joe Mont explains in Compliance Week. (sub req’d)
  6. What are your supply chain risks? Russ Berland explores in Part 1 of a two-part blog post series on Corporate Compliance Insights.
  7. Looking at enforcement of financial market crimes in Canada and UK. Anita Anand reports in NYU’s Compliance and Enforcement Blog.
  8. What steps can you take to reduce whistleblower retaliation? Matt Kelly opines in Navex Global’s Ethics and Compliance Matters
  9. OECD slams Canadian government for interfering in SNC-Lavalin corruption investigation. Jonathan Rausch reports in Dipping Through Geometries.
  10. Join Tom and AMI’s Jesse Caplan for a 5-part exploration of emerging issues in healthcare compliance and monitoring. Check out the following: Part 1-Opioid Crisis-Legal issue; Part 2– Opioid Crisis-compliance solution; Part 3– the regulators; Part 4-the monitoring healthcare organizations; and Part 5-proactive monitoring. The podcast is available on multiple sites: the FCPA Compliance Report, iTunes, JDSupra, Panoplyand YouTube. The Compliance Podcast Network is now also on Spotifyand Corporate Compliance Insights.
  11. In Houston on April 11? Join the Greater Houston Business and Ethics Roundtable for a presentation for one year look back on GDPR. Registration and information are here.
  12. Check out the latest edition of Great Women in Compliance where Mary Shirley visits with Marianne Ibrahim.

Tom Fox is the Compliance Evangelist and can be reached at tfox@tfoxlaw.com. Jay Rosen is       Mr. Monitor and can be reached at jrosen@affiliatedmonitors.com.
For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit our sponsor Affiliated Monitors at www.affiliatedmonitors.com.

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FCPA Compliance Report

MTS Foreign Corrupt Practices Act Enforcement Action: Part V – Lessons Learned

We are on Episode V of a five-part exploration of the recent the Department of Justice and Securities Exchange Commission resolution of a Foreign Corrupt Practices Act enforcement action against the Russian telecom company, MTS. In this episode,  I conclude with the lessons learned for the compliance professional. Today we focus on four key lessons: (1) due diligence, (2) business justification, (3) business valuation and (4) the long road of bribery.
The documents which are the subject of this series are:
  1. MTS Deferred Prosecution Agreement (DPA);
  2. MTS Criminal Information (MTS Information);
  3. SEC Cease and Desist Order (Order);
  4. Karimova and Akhmedov Indictment (Indictment);
  5. Kolorit Dizayn Ink LLC Plea Agreement (Plea Agreement); and
  6. Kolorit Dizayn Ink Information (Kolorit Information);
  7. DOJ Press Release and
  8. SEC Press Release.
For additional reading see the blog post, “MTS FCPA Settlement and Karimova Indictment: Part V – Lessons Learned”
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FCPA Compliance Report

MTS Foreign Corrupt Practices Act Enforcement Action: Part IV – the Individual Indictments

We are on Episode IV of a five-part exploration of the recent the Department of Justice and Securities Exchange Commission resolution of a Foreign Corrupt Practices Act enforcement action against the Russian telecom company, Mobile TeleSystems PJSC (MTS). In this episode,  I look at the individual indictments, which charged Gulnara Karimova, daughter of the former President of Uzbekistan, with one count of conspiracy to commit money laundering and Bekhzod Akhmedov, a former MTS executive based in Uzbekistan with FCPA violations of one count of conspiracy to violate the FCPA, two counts of violating the FCPA, and one count of conspiracy to commit money laundering.
The indictment discussed the three companies who paid bribes to Karimova, who then laundered the money on the international stage. They were VimpelCom Ltd. (now VEON Ltd.), Telia Company AB (formerly TeliaSonera AB) (Telia) and MTS. The schemes Karimova used were so similar as to be almost identical. The only thing that changed was the name of the company she was shaking down money from in her march towards receiving over $1 billion in ill-gotten payments.
The documents which are the subject of this series are:
  1. MTS Deferred Prosecution Agreement (DPA);
  2. MTS Criminal Information (MTS Information);
  3. SEC Cease and Desist Order (Order);
  4. Karimova and Akhmedov Indictment (Indictment);
  5. Kolorit Dizayn Ink LLC Plea Agreement (Plea Agreement); and
  6. Kolorit Dizayn Ink Information (Kolorit Information);
  7. DOJ Press Release and
  8. SEC Press Release.
For additional reading see the blog post, “MTS FCPA Settlement and Karimova Indictment: Part IV – the Individual Indictments“
Categories
FCPA Compliance Report

MTS Foreign Corrupt Practices Act Enforcement Action: Part III – Missed Red Flags and Overridden Controls

In a stunning resolution to one of the longest running bribery, corruption and money-laundering sagas on the international stage, the Department of Justice and Securities Exchange Commission both announced settlement of a Foreign Corrupt Practices Act (FCPA) enforcement action against the Russian telecom company, Mobile TeleSystems PJSC (MTS). This podcast continues a five-part series will examine the background facts of the case, provide a detailed review of the bribery schemes involved, the compliance failures of MTS and its actions during the investigation which contributed to the size of the penalty, the individual criminal prosecutions brought by the Department of Justice as a part of this action and the key lessons learned by the compliance practitioner. In this Part 3, I discuss the failures in the MTS compliance regime, the override of internal controls and local business unit management actions which facilitated the bribery schemes.
The schemes involved:
a. Purchase of entities controlled by or through Karimova;
b. Purchase of telecom licenses at inflated prices; and
c. Fraudulent charitable donations.
The documents which are the subject of this series are:
  1. MTS Deferred Prosecution Agreement (DPA);
  2. MTS Criminal Information (MTS Information);
  3. SEC Cease and Desist Order (Order);
  4. Karimova and Akhmedov Indictment (Indictment);
  5. Kolorit Dizayn Ink LLC Plea Agreement (Plea Agreement); and
  6. Kolorit Dizayn Ink Information (Kolorit Information);
  7. DOJ Press Release and
  8. SEC Press Release.
Categories
FCPA Compliance Report

MTS Foreign Corrupt Practices Act Enforcement Action: Part II-the Bribery Schemes

In a stunning resolution to one of the longest running bribery, corruption and money-laundering sagas on the international stage, the Department of Justice and Securities Exchange Commission both announced settlement of a Foreign Corrupt Practices Act (FCPA) enforcement action against the Russian telecom company, Mobile TeleSystems PJSC (MTS). This podcast continues a five-part series will examine the background facts of the case, provide a detailed review of the bribery schemes involved, the compliance failures of MTS and its actions during the investigation which contributed to the size of the penalty, the individual criminal prosecutions brought by the Department of Justice as a part of this action and the key lessons learned by the compliance practitioner. In this Part 2, I consider the bribery schemes used by MTS to pay the bribes and Karimova to receive the bribe payments.
The documents which are the subject of this series are:
  1. MTS Deferred Prosecution Agreement (DPA);
  2. MTS Criminal Information (MTS Information);
  3. SEC Cease and Desist Order (Order);
  4. Karimova and Akhmedov Indictment (Indictment);
  5. Kolorit Dizayn Ink LLC Plea Agreement (Plea Agreement); and
  6. Kolorit Dizayn Ink Information (Kolorit Information);
  7. DOJ Press Release and
  8. SEC Press Release.
For additional reading see the blog post, “MTS FCPA Settlement and Karimova Indictment: Part II – The Bribery Schemes“
Categories
FCPA Compliance Report

MTS Foreign Corrupt Practices Act Enforcement Action: Part I-Introduction


In a stunning resolution to one of the longest running bribery, corruption and money-laundering sagas on the international stage, the Department of Justice and Securities Exchange Commission both announced settlement of a Foreign Corrupt Practices Act (FCPA) enforcement action against the Russian telecom company, Mobile TeleSystems PJSC (MTS). The FCPA enforcement action came in at $850 million which makes it Number 3 in the Top 10 of all-time FCPA settlements. This podcast opens a multi-part series will examine the background facts of the case, provide a detailed review of the bribery schemes involved, the compliance failures of MTS and its actions during the investigation which contributed to the size of the penalty, the individual criminal prosecutions brought by the Department of Justice as a part of this action and the key lessons learned by the compliance practitioner. In this Part 1, I begin with a review of the background facts, the parties and players and the fine and penalty of the MTS Foreign Corrupt Practices Act enforcement action.
The enforcement action was the third involving the same individual from the same country. That individual was Gulnara Karimova, the daughter of the former President of Uzbekistan. If that name sounds familiar to compliance professionals it is because she was also involved in the receipt of bribes paid in two other Top 10 FCPA enforcement actions; VimpelCom (now VEON Ltd.) and Telia Company AB. Contemporaneously with FCPA enforcement action involving MTS, there was a criminal indictment filed against Karimova and Bekhzod Akhmedov, a former MTS executive based in Uzbekistan. Akhmedov was charged with violating the FCPA for paying bribes to or for the benefit of Karimova and Karimova was charged she with laundering the money received as bribes.
The documents which are the subject of this series are:

  1. MTS Deferred Prosecution Agreement (DPA);
  2. MTS Criminal Information (MTS Information);
  3. SEC Cease and Desist Order (Order);
  4. Karimova and Akhmedov Indictment (Indictment);
  5. Kolorit Dizayn Ink LLC Plea Agreement (Plea Agreement); and
  6. Kolorit Dizayn Ink Information (Kolorit Information);
  7. DOJ Press Release and
  8. SEC Press Release.

For additional reading see the blog post, “MTS FCPA Settlement and Karimova Indictment: Part I-Introduction“.