Multinational conglomerate Honeywell Inc. expects to pay upwards of $160 million to settle investigations by the Department of Justice and Brazilian law enforcement over alleged violations of the Foreign Corrupt Practices Act, the company said in its quarterly report filed on Oct. 22 with the Securities and Exchange Commission. The company said it continues to cooperate with DOJ and the SEC throughout the investigations, including regarding a potential resolution of the allegations. Honeywell said that it recorded a $160 million charge in its Consolidated Statement of Operations, also accruing a liability on its Consolidated Balance Sheet to account for the expected payout.
Credit Suisse Group AG, a Switzerland-based financial services company, was fined nearly $100 million by the Securities and Exchange Commission for violating the Foreign Corrupt Practices Act, the SEC said this week. The commission said Credit Suisse bribed Mozambique government officials and hid the “underlying corruption” by saying the payments were intended to help Mozambique's tuna fishing industry. The company also had “deficient internal accounting controls,” which failed to address FCPA requirements and “address significant and known risks concerning bribery.” Credit Suisse faces about $475 million in total fines, from U.S. and United Kingdom authorities, including the SEC fine, for a range of other financial violations, including operating a hidden debt scheme and paying kickbacks to now-indicted former Credit Suisse investment bankers and their intermediaries.
Daniel Kahn, acting deputy assistant attorney general in the Justice Department's Criminal Division, is rejoining Davis Polk's Washington, D.C., office as a partner in the White Collar Defense & Investigations practice, the firm announced. Kahn will work on issues relating to criminal and regulatory investigations, along with civil and criminal trials. At DOJ, Kahn most recently supervised the Fraud Section and Appellate Section. Before that, Kahn was acting chief of the Fraud Section and chief of the Foreign Corrupt Practices Act Unit, where he oversaw involved FCPA and sanctions violations, commodities and securities fraud and money laundering, among other things, Davis Polk said.
Joe Walker, former head of Squire Patton's white collar practice, joined the white collar team at Orrick as a partner, the firm announced. Walker has expertise on Foreign Corrupt Practices Act matters and cases before the Securities and Exchange Commission, Orrick said. Walker also served as a prosecutor in the Department of Justice Criminal Division, Fraud Section, where he led the first joint FCPA enforcement action between the SEC and DOJ. He has represented “major financial institutions in enforcement matters” and was “a DOJ- and SEC-appointed FCPA compliance monitor for Weatherford International as well as counsel to the monitor in the first-ever FCPA monitorship by an arm of the U.S. Department of Transportation,” the firm said.
Afework Bereket, former employee of Swedish telecommunications giant Telefonaktiebolaget LM Ericsson and dual citizen of Ethiopia and Sweden, was indicted for his alleged role in a bribery scheme to pay off government officials in Djibouti, the Department of Justice said Sept. 8. Bereket allegedly engaged in the scheme from 2010 to 2014 in which he served as Ericsson's account manager for the Horn of Africa. He purportedly bribed two high-level officials in the small African nation's executive branch and one at its state-owned telecommunications company to win a contract valued at around $24 million. The scheme involved Bereket and others allegedly leading an Ericsson subsidiary to enter into a fraudulent contract with a consulting company that then signed off on fake invoices to hide the bribe payments, DOJ said. The bribe payments were routed through bank accounts in the U.S. to hide the funds, it said.
Several U.S. and multinational companies recently disclosed potential U.S. sanctions violations or updated previous disclosures. The cases involve a destruction of evidence in a sanctions investigation, potentially illegal transactions with Iran, a gaming software company and others.
The Committee on Foreign Investment in the U.S. should review all U.S. investment transactions by Brazilian meatpacking conglomerate JBS S.A., its holding company J&F Investimentos and any entity owned by the company’s owners Wesley and Joesley Batista, two senators said. The companies use “criminal practices to obtain the funds to acquire U.S. companies,” which may jeopardize U.S. economic security and undermine U.S. efforts to combat corruption, Sens. Bob Menendez, D-N.J., and Marco Rubio, R-Fla., said in an Aug. 13 letter to Treasury Secretary Janet Yellen. “With JBS S.A. planning further U.S. acquisitions in the near future,” the senators said, “the need for a thorough investigation is urgent.”
The Department of Justice last week moved David Last to officially head the Fraud Section’s Foreign Corrupt Practices Act Unit, The Wall Street Journal reported Aug. 12. Last has been serving as acting unit chief since April. A DOJ spokesperson declined to comment. Last’s appointment is the latest effort by DOJ to staff its FCPA unit with “experienced prosecutors,” Wiley Rein said. The agency has added six new assistant chiefs since the beginning of this year, which “reinforce the current Administration’s focus on proactive FCPA enforcement” and its belief that anti-corruption is a “core national security interest.”
The U.S. District Court for the District of Massachusetts was right to allow a new trial for Joseph Baptiste in a Foreign Corrupt Practices Act case, the U.S. Court of Appeals for the 1st Circuit said in an Aug. 9 opinion. Concurring with the district court that Baptiste's counsel was of such deficient performance to allow a retrial, a three-judge panel at the circuit court denied the U.S.'s appeal of the decision to run the trial back.
Jahna Hartwig, former associate general counsel for ethics and compliance at Booz Allen, joined Wilson Sonsini as a senior counsel for the national security practice in the firm's Washington, D.C., office, the firm said in an Aug. 9 news release. Hartwig will look to bolster Wilson Sonsini's national security team using her experience with export control and sanctions compliance, International Traffic in Arms Regulations matters and Foreign Corrupt Practices Act proceedings, the release said. Prior to Booz Allen, Hartwig held director and associate general counsel positions at Sikorsky Aircraft.