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DOJ announces record $3.5 billion-plus fine under FCPA

Jun 7, 2017 | Federal Crimes

In a series of ongoing posts, our blog has been discussing the U.S. Foreign Corrupt Practices Act — or FCPA — the landmark legislation passed by Congress back in 1977 to address corruption in the global marketplace. In particular, we’ve been focusing on its anti- bribery provisions.

To recap, the anti-bribery provisions of the FCPA essentially prohibit issuers, domestic concerns and other designated parties from making offers of payments, actual payments, or promises to make payments to foreign officials as a means of 1) influencing any act or decision taken in an official capacity, or 2) securing or retaining business. 

Interestingly enough, the FCPA was front and center in a recent announcement by the U.S. Justice Department outlining how it has reached an agreement with a Brazil-based construction conglomerate to pay a corporate bribery fine of over $3.5 billion, a new record.

This astounding amount was the product of a massive investigation — referred to in documents as Operation Car Wash — by U.S. and Brazilian authorities into construction giant Odebrecht and its petroleum subsidiary Braskem, which will pay $2.6 billion and $957 respectively.

Reports indicate that dozens of executives for Odebrecht, one of the largest construction firms in all of Latin America, were rounded up based on allegations that they took part in a massive graft scheme designed to overcharge Brazil’s state-controlled oil company, Petrobras, for projects and use these funds to make political bribes.

Regarding Braskem, the SEC has indicated that it made $325 million in profits thanks to bribes paid to a Petrobras official along with other prominent political figures.

This is far from the end of the matter, however, as both U.S. and Brazilian authorities have indicated that the investigation into alleged corruption is continuing.

As to why the federal government is so involved in this investigation, it’s all because of the FCPA. Specifically, both companies list their stock on U.S. exchanges and conduct business via U.S.-based banking institutions.        

This story clearly demonstrates that not only does the FCPA remain a very valuable weapon for the DOJ, but also one it will not hesitate to deploy in its efforts to combat corruption in the global marketplace.

We’ll continue our discussion of the FCPA in future posts …

In the meantime, consider speaking with a skilled legal professional who can protect your freedom and your future if you are under investigation or have been charged with violating the FCPA.


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