Tag: FCPA

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THE BERKO TRIAL – PART 1: The Digital Trail: How Prosecutors Built the Berko Bribery Case

A bribery case does not always arrive with a signed receipt. In the trial of former Goldman Sachs banker Asante Berko, prosecutors presented something different: a mosaic of evidence. They placed before the jury a high-value public project, politically connected intermediaries, payments tied to transaction milestones, personal email accounts, disputed consulting invoices, cash withdrawals, a recorded lunch conversation, and an individual who allegedly stood to receive millions.

Over the next five days, I will be taking a deep dive into this trial to see how the prosecution was able to convince a jury of the defendant’s guilt so quickly. The verdict was rendered in just over 3 hours, which tells you the jury did not doubt as to the defendant’s guilt. This blog post series is based upon the excellent reporting of Law360 reporter Stewart Bishop and additional source documents and resources from the Department of Justice (DOJ) and Securities and Exchange Commission (SEC).

The government’s burden was to prove the charged crimes beyond a reasonable doubt. Its strategy was to show that the evidence did not consist of isolated red flags. Each category corroborated the others. Taken together, prosecutors argued, the pattern demonstrated opportunity, corrupt intent, concealment, and personal gain.

A National Crisis and a High-Stakes Deal

The story began with a legitimate and urgent business need. Ghana had suffered widespread power shortages, and its government was seeking projects capable of adding generation quickly. Aksa Enerji Uretim A.S., a Turkish energy company and Goldman client, pursued an agreement to build and operate a power plant. The commercial stakes were substantial. Goldman contemplated arranging approximately $190 million in financing for Aksa and a $75 million letter of credit for Ghana. Goldman also held an approximately 16 percent interest in Aksa. The indictment alleged projected fees of approximately $10.3 million for the loan and more than $1 million for the letter of credit.

Berko was central to the business effort. A dual citizen of the United States and Ghana, he worked in the structured-finance group of Goldman’s United Kingdom subsidiary and had relationships with senior Ghanaian officials. Prosecutors argued that he connected three critical groups: the commercial client seeking the project, the local intermediaries who claimed access, and the public officials whose approvals were required. That role gave the government its organizing theory. Berko was not presented as a participant at the edge of the transaction. He was presented as the linchpin.

The Email Trail

The most important prosecution evidence was documentary. More than 300 emails were admitted during the nine-day trial. Prosecutors used their language, timing, recipients, and communication channels to construct a chronology of the alleged scheme. One September 2015 email shown to the jury stated that Parliament had been paid by Berko and discussed approximately $46,000 that he allegedly paid. Other messages addressed payments associated with the Ministry of Power, regulators, power-team personnel, travel, and parliamentary approval. In a July 2015 exchange over the size and timing of payments, Berko wrote that he was managing a relationship expected to pay everyone millions.

The government argued that these exchanges became more incriminating when compared with Berko’s ordinary deal communications. Routine transaction work went through Goldman’s systems. Sensitive payment discussions appeared in personal accounts. In February 2016, prosecutors showed the jury two emails sent 14 minutes apart. One used Berko’s Goldman account for ordinary deal business. The other used Gmail and instructed recipients to communicate there because his Goldman account was monitored. Personal email alone does not prove bribery. The government’s point was more precise. When an employee knows that the official system is monitored, moves sensitive discussions to a private channel, and then uses that channel for payment conversations linked to public approvals, the channel choice may support an inference of concealment.

Money That Followed Milestones

The prosecution next aligned communications with transaction events and financial flows. The indictment alleged that intermediaries used false consulting invoices to obtain reimbursement for bribes and routed funds from Turkey to Ghana through correspondent accounts in New York.

The chronology was central to the prosecution’s case. In April 2015, as the parties pushed toward execution of the emergency power agreement, an intermediary issued a $500,000 invoice. Emails allegedly discussed using part of that money to pay a Ghanaian official, and a $500,000 wire followed. Later that month, five Ghanaian officials traveled to Turkey to inspect equipment. The indictment alleged that their expenses were covered and each received $5,000.

When a senior Ghanaian official signed the agreement in May 2015, another invoice for $1.5 million was issued the same day. A $1.5 million transfer followed later that month. After Parliament ratified the agreement in July, emails discussed a $250,000 reimbursement request that included payments connected to Parliament, the Ministry of Power, regulators, engineers, travel, and Berko personally.

At trial, a government summary witness walked jurors through charts tracing funds from Aksa accounts in Turkey to accounts associated with intermediaries, Berko, and others. The records did not show the final transfer to every alleged official. Prosecutors answered that gap by pointing to evidence that cash was used to complete and conceal the payments. The amounts require discipline. The indictment alleged more than $700,000 in bribes. DOJ stated after the verdict that the government proved more than $1 million in bribes at trial.[1][5] Those figures come from different stages of the case and should remain separately attributed.

The Recorded Lunch

The recording supplied another form of corroboration. In November 2016, an FBI-assisted source met Berko at a London restaurant. The conversation moved among English, Twi, and Ghanaian Pidgin English, and the jury received a translated transcript. In one exchange, the source asked about a former energy minister. Berko replied that “KD got one million.” In another discussion, framed around a hypothetical investment, Berko initially said it was not good to pay the individuals under discussion. When asked for the best way to pay them, however, he answered, “Cash,” and said he could obtain $1 million from a bank.

The prosecution used these statements to reinforce its reading of the emails and money flows. The recording did not stand alone. It supplied the government’s alleged final piece of context: the same person who used private email for sensitive payments and appeared throughout the deal chronology also discussed a million-dollar payment to an energy minister and the practical use of cash. The source’s incentives, the FBI’s preparation of the conversation, translation issues, and the hypothetical framing were substantial defense subjects. They will be examined in Part 2. For the government’s case, the point was corroboration.

When Compliance Became Evidence

Goldman’s compliance response became part of the prosecution’s proof and, in my mind, one of the key components of the government’s overall presentation to the jury, as it was essentially evidence from an outside party to the transaction. Amandine Martin, who worked with Berko on the transaction, testified that Goldman spent months seeking explanations for payments to the Ghanaian intermediary. According to her testimony, the answers did not match information previously provided, and Aksa’s chief executive eventually responded that the company did not have time for the questions. Goldman withdrew from the transaction and did not provide the planned financing. Goldman was not charged in the criminal case. Prosecutors nevertheless used the compliance record to argue that Berko understood the risks and the institution’s rules, knew that his communications were monitored, and failed to correct allegedly false or incomplete explanations about the intermediary.

This is the first compliance lesson of the series: a control is also a record. Questions, responses, escalation, monitoring, and the decision to exit can later become evidence of what an employee knew, what the company challenged, and how the organization responded.

The Government’s Mosaic Holds

After approximately three hours of deliberation, the jury convicted Berko on all three counts: conspiracy to violate the FCPA, a substantive FCPA violation, and money laundering conspiracy. He was remanded pending sentencing. The general verdict does not tell us which email, payment path, witness, or recorded statement the jury found most persuasive. It also does not convert every factual assertion in the government’s narrative into a special finding. It does establish that the jury found the charged elements proven beyond a reasonable doubt.

That is the power of a circumstantial case. The government did not ask the jury to rely on one dramatic piece of evidence. It asked jurors to see a single pattern across communications, payments, timing, conduct, compliance warnings, and alleged concealment. The jury accepted that case.

Join us tomorrow in Part 2 where we will examine the defense’s answer: if the government said bribes went “up and down the chain,” where was the last mile showing money reaching a public official?

Resources:

United States v. Berko, No. 1:20-cr-00328-DG, Indictment, ECF No. 3 (E.D.N.Y. filed Aug. 26, 2020)

Stewart Bishop, “Goldman Jury Sees Cash Talk in Energy Deal Email Deluge,” Law360, Aug. 1, 2026; Stewart Bishop, “Goldman Exec Was Linchpin to Ghana Bribery Ploy, Jury Told,” Law360, Aug. 5, 2026.

Stewart Bishop, “Ex-Goldman Exec Convicted of Ghana Bribery Plot,” Law360, Aug. 6, 2026. Supplied trial reporting.

U.S. Attorney’s Office for the Eastern District of New York, “Former Goldman Sachs Investment Banker Convicted of Foreign Bribery and Money Laundering,” Aug. 6, 2026, DOJ Press Release.

Stewart Bishop, “Goldman Jury Sees Undercover Video as Bribe Trial Nears End,” Law360, Aug. 4, 2026—supplied trial reporting.

Stewart Bishop, “Shady Power Deal Used in Goldman Compliance Prep, Jury Told,” Law360, July 29, 2026

SEC Final Judgment against Asante Berko

SEC Complaint against Asante Berko

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The Scoular DPA Part 3: The Data Was Talking – Data Analytics and the Scoular Bribery Scheme

The Scoular Company bribery scheme was hidden, but it was not invisible. For six years, customs brokers paid Mexican officials approximately $2,000 per train so Scoular Company shipments could cross the border despite adverse inspections. The brokers invoiced the payments back to Scoular as “reinspection fees.” In total, Scoular Company admitted that it authorized $414,351 in bribes and avoided approximately $6.5 million in fees and costs. Those facts describe an FCPA violation. They also describe a data pattern.

I had the opportunity to visit with Vince Walden, CEO of KonaAI, about the Scoular Company FCPA enforcement action from a data analytics perspective. He identified the feature that should command every CCO’s attention: people concealing misconduct often record it consistently. They may avoid the word “bribe,” but they still need a repeatable description that allows the payment to be processed, reconciled, and found again. At Scoular Company, that description was “reinspection fee.”

Walden’s observation goes to the heart of modern compliance. Illegal conduct may be concealed from the compliance department while remaining visible in accounts payable, journal entries, invoices, purchase orders, shipment records, and communications. The control failure occurs when those systems hold the evidence, but the company never asks the data the right questions.

Consistency Can Become the Fraudster’s Fingerprint

Walden observed that accountants value consistency because consistent classifications support accurate reporting. Fraudsters and their enablers can exploit the same discipline. A bookkeeper cannot label a payment “bribe expense.” The payment still needs a code, description, vendor, amount, approver, account, and business purpose. If the scheme continues, the participants need a method they can repeat. That repetition creates a fingerprint.

Suspicious terms in payment descriptions and journal entries are among the most useful anti-corruption monitoring tests. His examples included phrases such as “friend fee,” “government payment,” and “miscellaneous.” The precise word will vary by company and geography. The analytical principle does not.

The company should identify unusual language, then connect it to the transaction behind it. Even if the language is not unusual, its repeated use might form a pattern worth exploring. A word cloud may provide a useful visual starting point. Keyword searches, natural-language processing, and risk dictionaries can scale the review across thousands of invoices and expense reports. Yet the purpose is not to find one forbidden word. It is to identify language that is unusual for the business, unusually frequent for one vendor, or correlated with a high-risk outcome. “Reinspection fee” was facially plausible. Repetition changed its meaning.

The First Test Was Hiding in Plain Sight

An elementary analytic (As in Elementary, my dear Watson) would have grouped customs-related payments by invoice description, vendor, amount, port, and frequency. That test could have asked:

  • How often does “reinspection fee” appear?
  • Which brokers submit the charge?
  • Is the amount repeatedly near $2,000?
  • Which employees approve it?
  • Does it appear only on trains with an inspection problem?
  • What happens to the shipment immediately after payment?

No single answer proves bribery. Together, the answers can create a compelling reason to investigate. The recurring round-dollar amount matters. Legitimate inspection costs often vary with the service, product, weight, time, port, or government fee schedule. A repeated $2,000 charge across multiple transactions may indicate a fixed unofficial tariff rather than the cost of a legitimate service.

The description also matters. If “reinspection fee” was not found in an approved government schedule, lacked official documentation, or appeared only in broker invoices rather than government receipts, the control should have required escalation before payment. Finally, the outcome matters most. If trains that failed inspection were consistently released after the fee, the company had more than an accounting anomaly. It had a payment linked to a favorable exercise of government discretion.

Connect the Payment to the Business Outcome

Traditional controls often examine whether an invoice matches a purchase order and whether an authorized employee approved it. A bribery scheme can satisfy both tests when employees are participating in the misconduct.

Data analytics must therefore test commercial substance, not merely procedural completion.

For Scoular Company, the decisive data model would connect five sources:

  • Inspection data: date, result, impurity identified, inspector, agency, and reinspection history.
  • Shipment data: train identifier, product, port, broker, delay, release time, and disposition.
  • Payment data: invoice description, amount, general-ledger account, supporting documents, approver, and payment date.
  • Third-party data: broker risk rating, contract terms, bank account, audit rights, ownership, and compensation history.
  • Communications data: relevant emails, WhatsApp records lawfully available to the company, and other business messages.

With those sources joined, compliance could test whether a $2,000 broker charge followed an adverse inspection and then by rapid release of the train. It could compare release rates for shipments with and without the payment. It could identify which brokers, ports, and employees produced unusually favorable clearance outcomes. That sequence is the analytic signature of the scheme: failed inspection, unusual payment, successful release.

Build a Layered Anti-Bribery Analytics Program

A mature program should not depend on one keyword or one dashboard. It should use several complementary tests.

Text analytics. Search invoice narratives, journal entries, purchase orders, and expense descriptions for high-risk terms, euphemisms, spelling variants, and unusual phrases. The risk dictionary should reflect the company’s markets and evolve with investigations.

Transaction analytics. Flag recurring round-dollar payments, duplicate or near-duplicate invoices, payments just below approval thresholds, split payments, weekend postings, manual journal entries, and charges lacking official receipts.

Vendor analytics. Compare customs brokers by fee frequency, payment descriptions, clearance rate, failed-inspection rate, use of subcontractors, changes in bank accounts, and concentration under particular employees or business units.

Outcome analytics. Test whether payments are statistically associated with permits, inspections, releases, tax outcomes, contract awards, or other favorable government actions. This moves the review from what the invoice says to what the payment accomplished.

Sequence analytics. Measure the time between an adverse event, a payment request, approval, payment, and favorable resolution. Short, repeated intervals can reveal a designed process.

Communications analytics. Where lawful and consistent with company policy, match high-risk transactions to messages about urgency, guarantees, officials, inspections, exceptions, or payments. A suspicious invoice can corroborate a message, and a message can explain the invoice.

Network analytics. Map relationships among employees, brokers, bank accounts, ports, approvers, and government touchpoints. Shared bank accounts, common addresses, unusual subcontractors, or recurring approval chains can expose concealed connections.

These tests should create ranked alerts, not automated accusations. Analytics identifies anomalies. Trained reviewers determine whether the transaction has a legitimate explanation, requires more evidence, or warrants an investigation.

Continuous Monitoring Is a Governance Choice

Walden’s closing advice was simple: keep innovating and keep running the analytics. The word “running” matters. As in continuously. A one-time review performed after a subpoena is forensic reconstruction. A risk-based test operating monthly, weekly, or at the point of payment is a compliance control.

Continuous monitoring does not mean surveillance of every employee or review of every transaction. It means that known high-risk processes receive repeatable testing at a frequency aligned with the risk. Customs payments, government-facing third parties, failed inspections, and manual financial entries deserve more attention than ordinary low-risk purchases.

The program also needs governance. Compliance and internal audit should agree on data ownership, alert thresholds, reviewer responsibilities, escalation standards, documentation, privacy requirements, and feedback loops. Finance must help validate legitimate payment patterns. The business must explain operational outcomes. Technology must maintain data quality and access. Legal must ensure that communications monitoring is lawful.

Most importantly, the board should ask whether compliance has direct access to the data. A dashboard built from incomplete information can create false assurance. If broker invoices sit in one system, inspection results in another, shipment releases in a third, and WhatsApp messages outside company retention, the organization sees fragments while the scheme operates across the seams.

Internal Controls Must Learn From Every Alert

Data analytics is not a substitute for internal controls. They supplement each other, as data analytics is a way to test whether those controls work and where they fail. An alert concerning a reinspection fee should trigger questions about official documentation, approved fee schedules, broker contracts, audit rights, segregation of duties, approval thresholds, and the economic rationale for the charge. If the review confirms misconduct, root-cause analysis should determine why the payment passed through accounts payable, why the broker remained active, why inspections and payment data were not connected, and whether incentives rewarded shipment clearance over compliance.

Every closed alert should improve the system. Confirmed concerns should add new keywords, vendor attributes, transaction patterns, and outcome measures. Legitimate transactions should help refine thresholds and reduce noise. This is how a compliance program becomes adaptive rather than static.

Questions for CCOs

CCOs should ask:

  • Which payment descriptions recur in our highest-risk government-facing processes?
  • Can we connect invoices to inspections, permits, customs outcomes, and shipment releases?
  • Which third parties generate unusually favorable results after unusual payments?
  • Are alert reviewers trained to investigate commercial substance, not merely paperwork?
  • How quickly does a confirmed issue change our controls and analytics?

The Bottom Line

Scoular Company’s bribery scheme did not require a sophisticated algorithm to detect. It required the company to notice a repeated phrase, a recurring amount, a high-risk broker, an adverse inspection, and a favorable government outcome. Walden’s lesson is that concealment often creates consistency, and consistency creates data. The task of compliance is to convert that data into a question early enough to matter.

Follow the words. Test the amount. Connect the outcome. Then channel your inner Sherlock Holmes and investigate what the pattern is telling you.

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The Scoular DPA: Part 2 – A Journey Through Non-Disclosure

The Scoular Company Deferred Prosecution Agreement (DPA) presents a difficult but essential lesson for every Chief Compliance Officer and board: stopping misconduct is not the same as voluntarily disclosing it. This might seem as self-evident as anything in compliance, but it is a critical component of this case.

The Statement of Facts says that internal reports alleging improper business practices connected to the Mexican inspection fees arose in 2019. Scoular then changed its grain-shipment practices and terminated its direct engagement with the customs brokers involved. Those steps addressed the immediate conduct. They did not produce voluntary self-disclosure credit. That misstep cost Scoular Company millions, potentially leading to a full declination.

The DPA states that Scoular did not receive credit under the DOJ Corporate Enforcement and Voluntary Self-Disclosure Policy (VSP) because it did not “voluntarily and timely disclose” the conduct to the Fraud Section. That single sentence creates the central governance question in Blog Post Part 2: What must happen after a credible internal report reaches the company? An internal allegation starts an investigative clock. The company must preserve evidence, protect against retaliation, assess immediate risk, and establish enough facts to make responsible decisions. It also starts a disclosure clock.

The VSP encourages companies to report potential wrongdoing at the earliest possible time, even before an internal investigation is complete. To qualify as a voluntary self-disclosure, a report must be made in good faith to the appropriate DOJ component, concern misconduct not already known to the Department, occur without a preexisting disclosure obligation, precede an imminent threat of disclosure or government investigation, and be made within a reasonably prompt time after the company becomes aware of the misconduct.

The burden of demonstrating timeliness rests with the company. This does not mean a company must call the DOJ the moment an untested allegation enters the hotline. It does mean disclosure cannot wait until every interview, legal conclusion, and remediation project is complete. The investigation and disclosure analyses must proceed together.

The DPA Tells Us the Result, Not the Internal Debate

The agreement does not explain who received the 2019 reports, how the allegations were investigated, when senior management or the board learned of them, or why Scoular did not make a qualifying disclosure. It does not tell us whether the company made a deliberate decision not to report. What the DPA does establish is the outcome. Internal reports arose. The company changed its practices and terminated direct broker relationships. The company did not voluntarily and timely disclose the conduct to the Fraud Section and therefore received no voluntary disclosure credit.

That sequence is enough to demonstrate a control lesson. A company can remediate an operational problem and still leave the enforcement decision unresolved. The response requires four distinct workstreams:

  • Stopping the conduct prevents additional harm.
  • Investigating the conduct determines what happened and which controls failed.
  • Remediating the controls reduces recurrence risk.
  • Evaluating disclosure determines whether, when, where, and how the company should approach enforcement authorities. This fourth step is arguably the most important and must be reached with great speed, perhaps as little as two weeks after initial determination.

A Disclosure Needs a Decision Process

Disclosure decisions should not depend on one executive’s instinct or on the hope that remediation will close the matter. The company needs a defined escalation structure involving legal, compliance, internal audit, finance, and appropriate senior management. Depending on the seriousness of the facts, the audit committee or another independent board committee may need to oversee the decision.

For an FCPA matter involving customs brokers, repeated payments, government officials, inaccurate invoice descriptions, senior personnel, and multiple years of conduct, the disclosure analysis should address:

  • What credible facts are known now?
  • Is the misconduct continuing?
  • Which individuals and third parties may be involved?
  • Are the books and records inaccurate?
  • Is there evidence of management participation, approval, condonation, or willful ignorance?
  • Has a whistleblower, auditor, regulator, bank, business partner, or foreign authority already received the same information?
  • Is there an imminent threat that the DOJ will learn of the conduct?
  • What additional facts are necessary to make a disclosure decision?
  • When will the decision be revisited?
  • Who has authority to decide, and how will the reasoning be documented?

The objective is not to create a paper defense for a predetermined result. It is to establish a disciplined process that forces the company to confront timing, uncertainty, accountability, and enforcement exposure.

Disclosure Does Not Require a Finished Investigation

One reason companies may delay is the understandable fear of reporting facts that are incomplete or later prove wrong. The DOJ policy addresses that concern directly. It encourages early disclosure even when the company has not completed its internal investigation. The company can report the misconduct known at that stage, identify the limits of its current knowledge, preserve credibility by avoiding unsupported conclusions, and provide rolling updates as the investigation develops.

That approach requires discipline. The initial disclosure should distinguish facts from allegations, describe preservation and remediation steps, and explain the investigative plan. Later presentations should attribute facts to specific sources and identify individuals regardless of seniority.

Waiting for certainty can eliminate the benefit the company hoped to secure. A whistleblower may contact the government, a third party may cooperate, or the payment may surface in another investigation. Once the DOJ already knows or disclosure is imminent, the analysis changes. The business lesson is straightforward. Uncertainty calls for a staged disclosure strategy, not an indefinite pause.

Cooperation Still Mattered

Scoular Company lost the disclosure benefit, but the DPA demonstrates that the company could still earn meaningful credit. The DOJ credited Scoular with conducting an internal investigation, making detailed factual presentations, identifying individuals involved, producing and organizing requested materials, securing counsel for current employees, and providing all relevant facts known to it.

Voluntary self-disclosure, cooperation, and remediation are separate pillars. A company that misses the first can still create value through the other two. The DPA also notes “certain deficiencies in the early part of the investigation.” It does not identify those deficiencies, and they should not be guessed. Their inclusion nevertheless sends a message: cooperation is judged across the life of the investigation, not merely by the quality of the final presentation.

The current DOJ policy makes the standard explicit. A company starts at zero cooperation credit and earns credit through specific actions: scope, quality, impact, and timing matter. A failure to cooperate fully at the earliest opportunity may reduce the credit available later. For CCOs and boards, the lesson is that recovery remains possible, but delay has a price.

Remediation Changed How the Business Operated

Scoular also received credit for substantial remediation. The company increased compliance engagement with the business, used external compliance maturity and anti-corruption risk assessments, restructured the compliance function, and incorporated senior leadership oversight. It eliminated customs brokers associated with reinspection fees, strengthened risk-based review and monitoring with software tools, revised policies, enhanced third-party screening and approvals, added anti-corruption and audit-right provisions to contracts, improved financial controls for high-risk transactions, and delivered general and targeted training.

These measures went beyond terminating vendors. They addressed governance, third-party management, payment controls, monitoring, technology, policies, and training. That breadth matters because remediation must be tied to root cause. If the misconduct was enabled by commercial pressure, broker dependence, misleading invoices, weak transaction validation, and fragmented data, another annual training course will not solve the problem.

The Economic Difference Was Significant

Scoular entered into a three-year DPA and agreed to pay a $9,769,521 criminal penalty and $414,351 in forfeiture. The DPA states that the penalty reflected a 25 percent reduction from the applicable low-end amount. A footnote explains that the statutory alternative-fine cap, based on twice the approximately $6.513 million gross gain, constrained the otherwise higher Guidelines minimum.

The DPA does not say what disposition Scoular would have received after a qualifying disclosure. It would be improper to rewrite the resolution with hypothetical facts.

The current department-wide CEP nevertheless shows why the distinction matters. A company that voluntarily self-discloses, fully cooperates, timely remediates, and has no disqualifying aggravating circumstances is placed on a declination path. A good-faith self-report that narrowly misses the policy’s technical requirements can still lead to an NPA, a term shorter than three years, no monitor, and a reduction of 50 to 75 percent from the low end. Companies outside those paths remain subject to prosecutorial discretion, with a reduction capped at 50 percent.

Scoular received a DPA, a three-year term, and a 25 percent reduction. The numbers turn disclosure governance into a business issue. The decision affects resolution form, penalty exposure, duration, oversight, reputation, management time, and the company’s ability to move beyond the misconduct.

Questions for CCOs

CCOs should ask:

  • Does every credible allegation involving government payments trigger a documented disclosure analysis?
  • Who owns the disclosure clock while the investigation proceeds?
  • Can legal and compliance make an early report without waiting for a completed investigation?
  • Are facts, assumptions, open questions, and decision deadlines documented separately?
  • Have we tested the process through a tabletop exercise involving a whistleblower, a third party, and an imminent government inquiry?

The Scoular DPA does not establish why the company missed voluntary disclosure credit. It does establish that internal reporting, operational remediation, and voluntary disclosure are not interchangeable. When a credible allegation arrives, the company must stop the conduct, investigate the facts, remediate the controls, and make a timely, documented disclosure decision. Doing three of those four things can still leave substantial value on the table.

Join us tomorrow for Part 3, where we will examine how a robust internal control system paired with a robust data analytics overview can help a company avoid a Scoular Company-type series of failures.

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FCPA Compliance Report

FCPA Compliance Report: Matt Ellis Wrap-Up from Cartels, FTO Risk, and Corporate Compliance Conference

In this episode, Tom Fox welcomes back Matt Ellis of Miller & Chevalier to recap ACI’s inaugural two-day Cartel Conference in Washington, DC, highlighting an unusually collaborative, high-energy atmosphere around emerging cartel/TCO/FTO compliance risks in Latin America.

They discuss DOJ’s Scoular FCPA action as illustrating the long tail of enforcement and a high bar for managing cartel-related and national security risks, while noting the DPA’s remedial steps focus more on traditional anti-corruption controls than TCO/FTO-specific guidance. Government participants emphasized a “whole of government” approach, voluntary disclosure, and potential public-private engagement (including embassy attachés and Treasury) in high-risk scenarios. Key themes included narrow duress defenses, complex “imposter” risks, evolving due diligence beyond traditional screening using data/anomaly detection and local intelligence, and the need to integrate compliance across AML, sanctions, security, and supply chain given severe reputational and business consequences of terrorist or cartel support.

Key highlights:

  • Conference Vibe and Energy
  • Scoular FCPA Case Takeaways
  • When to Engage Government
  • Duress Defense and Safety Payments
  • Cartel-Focused Due Diligence
  • AML Lessons for Banks
  • Breaking Silos in Compliance
  • Parallels to Early FCPA Era
  • National Security Stakes

Resources:

ACI National FCPA and Global Anti-Corruption Conference, December 10-11 at the Gaylord National Resort & Convention Center, Washington, DC

Matt Ellis on LinkedIn

Tom Fox

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To learn about the intersection of Sherlock Holmes and the modern compliance professional, check out my latest book, The Game is Afoot-What Sherlock Holmes Teaches About Risk, Ethics and Investigations on Amazon.com.

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The Scoular DPA: Part 1 – From Suelo to the Bribery System at Scoular

My earlier analysis of The Scoular Company FCPA enforcement action necessarily relied on the Department of Justice Press Release. That release described the government’s allegations. The formal Deferred Prosecution Agreement (DPA) expands the footing of the discussion. We are no longer working only from a prosecutor’s summary. We now have a detailed chronology of facts the company formally admitted.

Those facts reveal a scheme connecting stricter Mexican inspections, commercial pressure, employees, multiple customs brokers, a meeting at a company office, invoices, wire payments, WhatsApp, and millions in avoided costs. The central compliance lesson is normalization. A corrupt proposal became a repeatable business process. Over the next four blog posts, I will be taking a deep dive into the DPA, what it tells us, and what we must speculate on.

The Scheme Began With a Change in Enforcement

Scoular transported corn and other agricultural products from the United States into Mexico. Those trains were inspected by Mexico’s Secretariat of Agriculture and Rural Development, referred to in the DPA by its former name, SAGARPA.

Inspectors looked for dirt, soil, and other impurities, sometimes described as “suelo.” SAGARPA approval was required before a train could enter Mexico. When inspectors detected suelo, the agency could delay entry, and the shipment could incur fumigation and demurrage costs.

Beginning around 2013, Mexican authorities conducted the inspections more rigorously. The result was more soil findings in Scoular shipments and greater exposure to delay, fumigation, and demurrage. This legitimate business problem called for better product controls and contingency planning. It also created pressure that made a corrupt alternative attractive.

Compliance failures often begin here. Regulation becomes more rigorous, costs increase, and delivery commitments are threatened. The governance question is whether management improves the process or finds a way around the control. This demonstrates why a continuous risk assessment is so critical; when your risks change, you need to perform an updated risk assessment.

The Proposal Was a Guarantee Against Adverse Decisions

In June 2013, customs broker Carlos Leopoldo Alvelais contacted a Scoular sales employee and a Scoular senior manager. According to the DPA, he proposed a procedure under which Scoular would pay a fee on every train. The purpose was not ambiguous. The proposal was designed to ensure that Scoular would “not have a single risk of adverse determinations from Mexican inspectors.” That sentence captures the scheme.

A legitimate broker can prepare documents, coordinate an inspection, and challenge an incorrect result. It cannot guarantee that a regulated company will never receive an adverse decision. A promise of zero regulatory failure should be treated as a red flag, not a service level. James Min made this clear with his risk matrix for assessing risk in customs broker clearance rates. If a customs broker offers you a 100% success rate – to quote Monty Python from The Holy Grail: Run Away Run Away, do not walk away.

The DPA says that, later in June 2013, Alvelais traveled to Scoular’s Kansas office and met with Scoular employees and others. After that meeting, he began paying bribes to Mexican officials and invoicing Scoular for reimbursement. The invoices described the payments as “REVISION SAGARPA PROCESS” (Reinspection Fees herein), generally in round amounts of $2,000.

The Kansas meeting is a significant new fact. The arrangement was not confined to an informal exchange between a local employee and a broker at a remote border crossing. The broker presented the approach at a company office. After the meeting, the payments began. This speaks to a serious failure in an overall compliance program: failure in communication, failure in training, failure in risk assessments, failure in internal controls, and failure in overall compliance visibility into the business operations of an organization it is supposed to keep in compliance.

At a minimum, when a high-risk third party visits a company office to propose a government-facing payment process, the arrangement should require a documented business rationale, legal and compliance review, a payment protocol, and supporting evidence. Without those controls, the meeting can move misconduct into the company’s operating structure. This basic failure led to catastrophe for Scoular Company.

The Payment Process Was Replicated

The DPA places a sales employee and a senior manager who worked on international grain sales and shipments at the center of the conduct. They authorized reimbursement of Reinspection Fees to Alvelais and his companies while knowing that at least part of the money would be used to bribe Mexican border officials. The objective was to ensure that Scoular trains passed inspection without the fumigation, demurrage, and other costs associated with soil findings and failed inspections.

But it got worse from there. Scoular then replicated the approach with two other customs brokers. That replication is critical. This was not simply a broker corrupting a customer. Company personnel took a method used with one broker and extended it to additional agents. The model followed the business.

The DPA describes cash payments of up to $2,000 per train. Scoular employees and agents coordinated the scheme through email, messaging applications, and other communications. Invoices were transmitted, and Scoular caused payments to be made by wire. The scheme therefore had all the components of a functioning process:

  • A recurring commercial problem
  • A third-party payment mechanism
  • Employee knowledge and authorization
  • Multiple participating brokers
  • Standard invoice descriptions
  • Company reimbursement
  • Off-channel and conventional communications
  • A measurable business benefit

Each component could look ordinary when reviewed separately. Together, they formed the bribery scheme.

The Communications Made the Purpose Clear

The admitted communications are especially instructive because they connect payment, knowledge, and outcome. In August 2015, an Alvelais employee informed a Scoular employee that inspectors had detected soil in a train. The train was nevertheless released without delay, and the account would include a $2,000 charge. In October 2015, a Scoular employee sent a WhatsApp message to the senior manager stating that Alvelais would provide a favorable rate and guarantee that no train headed to a particular buyer would be stopped for soil. Another October 2015 communication listed “Dispatch of merchandise in the presence of soil” at $2,000 per shipment.

Later that month, a Scoular employee reported that the broker was doing everything possible to move a shipment, but an inspector’s supervisors were in town and “normal procedures” were not working. By 2018, the language was even more direct. During an exchange concerning pests detected in a shipment, an Alvelais employee wrote that the broker had offered more than it normally gave and the officials had not accepted it. A Scoular employee responded by asking why the broker was requesting double if the issue was fixed for soil.

These communications defeat any claim that employees believed they were paying published government fees. They describe adverse findings, guarantees against stopped trains, and payments beyond ordinary amounts. No single record tells the complete story. The invoice supplies the accounting description, the message supplies intent, the inspection record supplies the regulatory event, and the release time supplies the outcome. Investigations and monitoring must connect all four.

The Scheme Continued Into 2019

The DPA identifies three invoices from 2019:

  • A $3,000 “SAGARPA process” fee from an Alvelais company
  • A $1,750 “Other Inspection” fee from a second customs broker
  • A 35,000 Mexican peso “SERVICIOS DE SAGAR” fee, approximately $1,835, from a third customs broker

Scoular promptly paid each invoice.

The changing descriptions are a lesson in internal control design. A monitoring rule limited to “reinspection fee” would have missed “SAGARPA process,” “Other Inspection,” and “SERVICIOS DE SAGAR.” Compliance analytics must identify families of risk, not merely exact words.

The DPA says that internal reports alleging improper business practices connected to the SAGARPA fees arose in 2019. Scoular then changed its practices for grain shipments into Mexico and terminated direct engagement with the customs brokers involved.

That response ended the factual chronology, but it opens the next compliance question: what happened between the internal reports and the DOJ resolution, and why did Scoular receive no voluntary self-disclosure credit? That will be the focus of Part 2.

The Economics Show Why the Scheme Endured

Between approximately 2015 and 2019, Scoular authorized $414,351 in bribes to bypass inspections and secure unhindered passage into Mexico. The company avoided approximately $6,513,014 in demurrage and related costs. That is more than $15 in avoided costs for every dollar paid in bribes.

The ratio does not excuse the conduct. It explains the incentive that allowed it to become embedded. A $2,000 charge could appear small against the cost of a delayed train, while the accumulated benefit rewarded the business process that produced the misconduct. This is why compliance cannot evaluate customs payments only by individual transaction value. The relevant indicators include frequency, round amounts, timing, inspection outcome, avoided cost, broker success rate, and management awareness.

The Compliance Failure Was Normalized

The Scoular Statement of Facts shows how misconduct can become ordinary:

  • External enforcement became more rigorous.
  • The business faced higher costs and delays.
  • A broker proposed a fee-based solution.
  • The broker met with employees at a company office, and payments followed.
  • Brokers paid officials and invoiced Scoular.
  • Employees authorized reimbursement.
  • The approach expanded to other brokers.
  • Messages and invoices developed a shared vocabulary.
  • The business received predictable passage and high avoided costs.
  • The process continued until internal reports surfaced.

The DPA does not describe a control that failed once. It describes an alternative control environment that operated for years.

The DPA sharpens the Scoular lesson. The scheme was not simply a series of border bribes. It was a business process built to eliminate the risk of adverse government decisions. When a third party offers that result, compliance should assume the risk has not disappeared. It has merely been transferred into a payment, an invoice, and a promise that deserves immediate scrutiny.

Join us tomorrow, where we take a deep dive into the Scoular Company’s failure to self-disclose and the long-term ramifications.

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Daily Compliance News

Daily Compliance News: July 30, 2026, The Milli Vanilli Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen in to the Daily Compliance News. All from the Compliance Podcast Network. Each day, we consider four stories from the business world, compliance, ethics, risk management, leadership, or general interest for the compliance professional.

Top AI stories include:

  • Defense lawyers claim DOJ FCPA case is a ‘Milli Vanilli’ offering.  (Law360) sub req’d
  • eBay and execs agree to pay $55.7 MM in settlement for harassment. (Law360) sub req’d
  • Teva can’t whine about agreed-to admissions. (Law360) sub req’d
  • 1st Circuit skeptical that hiring SW is a lie detector. (Law360) sub req’d

To learn about the intersection of Sherlock Holmes and the modern compliance professional, check out Tom’s latest book, The Game is Afoot-What Sherlock Holmes Teaches About Risk, Ethics and Investigations on Amazon.com.

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Great Women in Compliance

Great Women in Compliance: GWIC x Everything Compliance – Summer 2026

We are back with another GWIC x Everything Compliance crossover, with Hemma and Lisa joining Kristy Grant-Hart and Karen Moore to talk about what’s on their minds and the compliance news of the day. They discuss everything from Scoular Company entering into a Deferred Prosecution Agreement and paying over $10m for FCPA violations, lessons for Ethics & Compliance professionals from the World Cup, the resolution of the allegations against Alibaba and AUS Merchant Services, and what we can take from the leaked draft of the EU’s New Public Procurement Regulations.

And, of course, it wouldn’t be Everything Compliance without the rants and raves.

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Compliance Into the Weeds

Compliance into the Weeds: Scoular Company FCPA Settlement: Cartel Links, Border Trade Risks, and Compliance Lessons

The award-winning Compliance into the Weeds is the only weekly podcast that takes a deep dive into a compliance-related topic, literally going into the weeds to explore it more fully. Looking for some hard-hitting insights on compliance? Look no further than Compliance into the Weeds! In this episode of Compliance into the Weeds, Tom Fox and Matt Kelly discuss the recent FCPA resolution with the Scoular Company. Both Tom and Matt have blogged on this matter, so check out the Resources link below for additional discussions.

The recent FCPA enforcement action against Scoular Company involved a $10.2 million payment and a three-year deferred prosecution agreement over bribes by third-party customs brokers to Mexican border officials to expedite cross-border shipments. DOJ emphasized alleged cartel connections, including a strong statement from the U.S. Attorney for the Western District of Texas, which raised questions about expanded local U.S. attorney involvement and how cartel or potential FTO designations could heighten trade and compliance risks. The company received no voluntary self-disclosure credit but got a 25% discount, with remediation cited (including dropping brokers and strengthening tone at the top). They highlight off-channel WhatsApp use, the lack of released key documents (DPA, statement of facts, criminal information), and practical compliance takeaways on third-party oversight, data analytics, and risk assessments.

Resources:

Matt in Radical Compliance

Tom in FCPA Compliance and Ethics Blog

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A multi-award-winning podcast, Compliance into the Weeds was most recently honored as one of the Top 25 Regulatory Compliance Podcasts, a Top 10 Business Law Podcast, and a Top 12 Risk Management Podcast. Compliance into the Weeds has been conferred the Davey, Communicator, and W3 Awards, all for podcast excellence.

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FCPA Compliance Report

FCPA Compliance Report: The Business Case for Going Back into Venezuela with Loren Steffy

Welcome to the award-winning FCPA Compliance Report, the longest-running podcast in compliance. In this episode, Tom welcomes back former Houston Chronicle business columnist Loren Steffy to discuss the business aspects of returning to Venezuela.

Loren Steffy has spent much of his career analyzing the energy industry and the challenges of oil and gas development. On Venezuela, he argues that Trump administration moves are unlikely to produce meaningful gains in oil output and are more likely to deepen market uncertainty, especially in West Texas. Steffy says Venezuela’s oil sector is effectively too risky and too unstable for major foreign investment because its infrastructure has deteriorated, its legal and political environment remains unclear, and rebuilding production would require major capital, advanced technology, and years of work. Even if some companies were willing to take a chance, he believes the combination of insecurity, weak rules, and Trump-era policy uncertainty makes a broad investment revival in Venezuela highly unlikely.

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The FCPA Compliance Report was recently named the world’s Best Business Ethics Podcast by FeedSpot.

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Blog

Scoular’s $10 Million FCPA Resolution: Compliance Lessons Learned

We conclude our review of the Scoular Company FCPA enforcement action with a full lessons-learned blog post. We are still awaiting the DPA and Criminal Information, so the details of the case come from the Department of Justice (DOJ) Press Release.

A $2,000 payment can disappear inside a global supply chain. Repeated, train-by-train, authorized by employees, routed through customs brokers, discussed on WhatsApp, disguised as a “reinspection fee,” and reimbursed for six years, it becomes an operating model. That is the central lesson from The Scoular Company Foreign Corrupt Practices Act resolution.

The DOJ announced that Scoular Company would pay more than $10 million to resolve an investigation into bribes paid to Mexican officials between 2013 and 2019. The company entered into a three-year deferred prosecution agreement, agreed to a $9,769,521 criminal penalty and $414,351 in forfeiture, and accepted continuing cooperation, compliance, and reporting obligations.

Across this blog post series, we examined four dimensions of the case: customs brokers and payment controls, cartel and national-security risk, off-channel communications, and the facilitating-payments exception. Read together with my podcast conversation with Matt Ellis, they reveal a single conclusion. Compliance must follow the complete transaction, from the business pressure that creates the payment to the third party that delivers it, the message that authorizes it, the invoice that conceals it, and the ultimate recipient who benefits.

The Scheme Hid in Plain Sight

According to the DOJ, Scoular Company relied on customs brokers to move corn and other agricultural products from the United States into Mexico. Mexican authorities inspected the shipments for dirt, soil, and other impurities. When inspections identified problems, Scoular Company employees directed brokers to pay officials approximately $2,000 per train so the shipments could cross the border. The brokers invoiced the payments back to Scoular Company as “reinspection fees,” and Scoular paid them. In total, the company authorized more than $400,000 in bribes and avoided more than $6.5 million in fees and costs.

The invoice description is the first major lesson. “Reinspection fee” sounded like it was connected to a legitimate customs process. Yet an accounts-payable control that merely matches an approved vendor, purchase order, and plausible service description tests paperwork, not substance.

Effective payment controls should require the company to identify the government agency involved, match the charge to a specific shipment and inspection, compare the amount with an official fee schedule, obtain proof of service, confirm the payee, and document the business justification. Repeated round-dollar charges, unusual success rates, rapid clearance after special payments, and fees unsupported by government records should trigger review.

Follow the money, measure the time, and test the outcome. That is how ordinary transaction data becomes an anti-corruption control.

A Licensed Broker Is Still a High-Risk Third Party

Customs brokers should never be treated as low-risk administrative providers simply because they are licensed or legally required. They interact with government officials, operate under commercial pressure, and can impose charges that distant finance personnel cannot easily verify.

Initial due diligence remains necessary, but it is only the beginning. Companies must connect screening, contracting, invoice testing, transaction monitoring, recertification, training, audit rights, and offboarding. The real test is not whether the third-party file was complete on the day of onboarding. It is whether the company understands how the broker behaves after the contract is signed.

The DOJ credited Scoular Company with eliminating brokers associated with the Mexican reinspection payments, strengthening risk-based screening and approvals, adding anti-corruption and audit-rights provisions, revising controls for high-risk transactions, and using software tools to improve monitoring. That remediation changed the operating model rather than merely revising a policy.

Cartel Risk Changes the Compliance Perimeter

The most consequential part of the DOJ announcement may be its national-security framing. The government determined that, without Scoular Company or its employees knowing it, a portion of the bribes benefited persons associated with a cartel’s criminal operations at the U.S.-Mexico border.

U.S. Attorney Justin R. Simmons stated that American companies engaged in cross-border trade bear responsibility for operating without benefiting cartels or threatening national security. Ellis challenged the literal breadth of the statement during our podcast discussion. Legitimate trade crosses the border every day without companies knowingly paying cartels. Nevertheless, he agreed that the statement signals a more demanding compliance environment.

Ellis explained that the cartel and transnational criminal organization risk is broader than the traditional FCPA risk. Anti-corruption diligence often concentrates on government touchpoints and intermediaries. Organized crime may be hidden inside transportation providers, suppliers, customers, labor relationships, security services, subcontractors, and local routes.

Traditional database screening may not reveal those connections. Ellis emphasized contextual diligence: speak with employees on the ground, examine local security concerns, understand regional criminal activity, investigate facts that do not add up, and adjust operations when warning signs emerge. Companies do not need perfect knowledge. They need a documented story of reasonable measures, credible escalation, and risk-based decisions.

The practical consequence is an integrated risk assessment. Anti-corruption, sanctions, anti-money laundering, trade compliance, physical security, supply chain, and third-party risk cannot remain in separate silos when the same payment may touch all of them.

WhatsApp Was Part of the Control Environment

The DOJ said Scoular Company employees communicated about shipments and bribes through WhatsApp and other means. WhatsApp was therefore not a side issue. It allegedly carried the knowledge and direction behind transactions later recorded as legitimate reinspection charges.

An informal application becomes a business system when employees use it to direct third parties, approve payments, or resolve customs problems. Enterprise controls can be bypassed when the substantive decision occurs in a private chat, and the formal system records only the sanitized result.

Ellis noted that a complete WhatsApp ban may be unrealistic in Latin America. The better approach is to map actual use and define what may occur on each platform. Logistical coordination may be permitted. Government interactions, payment approvals, contractual commitments, and exceptions should remain in controlled systems with retention and audit trails.

Companies must also be able to preserve and retrieve business communications lawfully from company and personal devices. Policies should address device replacement, departing employees, legal holds, privacy and employment requirements, refusal of access, and consistent discipline. The decisive question is not whether a policy exists. It is whether the company can obtain the evidence when an investigation begins.

Why These Were Not Facilitation Payments

The $2,000 amount and the customs setting may tempt employees to use the phrase “facilitation payment.” That label does not fit. The FCPA’s narrow exception covers payments intended to expedite routine, nondiscretionary governmental action that the payer is already entitled to receive. Scheduling an inspection may be routine. Paying an official to disregard a failed inspection is not.

The Scoular Company payments allegedly changed the result. The shipments had identified impurities, and the payments allowed trains to cross despite those findings. The company received a substantial business advantage by avoiding more than $6.5 million in costs. A facilitation payment is not defined by size, local custom, commercial urgency, or invoice terminology. A third party cannot create an exception unavailable to the principal. Nor does an anti-bribery exception excuse false accounting. Even a qualifying payment must be accurately recorded and supported by adequate internal controls.

Ellis’s discussion of extortion reinforces the operational lesson, although extortion and facilitation are distinct doctrines. One or two emergency payments may present a different analysis from a chain of payments continuing over years. Repetition transforms an asserted accommodation into a business process. Companies must respond by escalating, rerouting, changing providers, investigating, and remediating.

Cooperation Still Matters

Scoular Company did not receive voluntary self-disclosure credit because it did not report the conduct to the DOJ in a timely manner. It did receive cooperation credit for its internal investigation, factual presentations, identification of involved individuals, production and organization of evidence, and provision of counsel for current employees, despite early deficiencies.

The resulting criminal penalty reflected a 25 percent reduction from the bottom of the applicable sentencing guidelines range. The lesson is straightforward. Missing the voluntary disclosure window does not render later cooperation irrelevant, but cooperation is not a substitute for timely self-disclosure. The Scoular Company resolution is not four separate compliance stories. It is one story about how pressure, third parties, communications, accounting, and emerging national-security risks converged inside an ordinary business process.

The enduring lesson is equally integrated: know the broker, validate the payment, preserve the message, understand the route, and test the outcome. That is how compliance moves from policy to proof.