Source: https://thelawreviews.co.uk/edition/the-anti-bribery-and-anti-corruption-review-edition-8/1210843/united-states
Timestamp: 2020-01-27 02:57:18
Document Index: 166189336

Matched Legal Cases: ['§501', '§208', '§2635', '§2635', '§2635', '§30121', '§30121', '§611', '§1952', '§201', '§3571', '§201', '§3571', '§666', '§3571', '§1951', '§3571', '§1346', '§78', '§78', '§ 319', '§78', '§ 78', '§78', '§78', '§78', '§78', '§78', '§78', '§78', '§78', '§78', '§78', '§78', '§8', '§9', '§ 9', '§ 9', '§ 9', '§9', '§78', '§3571', '§78', '§78', '§78', '§78', '§78', '§78', '§78', '§78', '§3571', '§3282', '§78', '§162', '§1956', '§1956', '§ 1956', '§1956', '§1956', '§1956', '§5324', '§1956', '§1957', '§981', '§5313', '§5331', '§103', '§5314', '§103', '§5318', '§5322', '§5322', '§9', '§ 9', '§ 9']

United States - The Anti-Bribery and Anti-Corruption Review - Edition 8 - TLR - The Law Reviews
The Hobbs Act, 18 USC Section 1951, also targets public corruption by criminalising extortion under colour of official right. The Act applies to any public official who 'has obtained a payment to which he was not entitled, knowing that the payment was made in return for official acts'.3 The Supreme Court has held that a conviction for extortion under colour of official right does not require the government to prove that the payment was affirmatively induced by the official; rather, 'the coercive element is provided by the public office itself'.4 The Act also has a broader jurisdictional reach as it can be applied to state public officials so long as the activity 'affects commerce'. This requirement can be satisfied even if the effect is de minimis.5
Public officials are defined broadly under Section 201 as not only federal government officers or employees, but also 'person[s] acting for or on behalf of the United States, or any department, agency, or branch of Government thereof . . . in any official function, under or by authority of any such department, agency, or branch of government'.6 The Supreme Court has extended the reach of Section 201 to officers of a private, non-profit corporation administering and expending federal community development block grants. The Court made clear, however, that the mere presence of some federal assistance would not bring a local organisation and its employees within the jurisdiction of Section 201. Rather, to be a public official, 'an individual must possess some degree of official responsibility for carrying out a federal program or policy'.7
Members of Congress are prohibited from earning outside income that exceeds 15 per cent of the annual rate of basic pay for Level II of the Executive Schedule (currently US$192,300) in any calendar year.8 Members of Congress may not receive any income from employment or affiliation with any entity that provides services involving a fiduciary relationship and may not sit on a corporation's board of directors.9 Presidential appointees in the executive branch subject to Senate confirmation are prohibited from all outside earned income.10 'Covered non-career employees' of the executive branch (generally presidential appointees not subject to confirmation by the Senate) have the same restrictions on outside income as members of Congress.11 Executive branch career civil servants not subject to Senate confirmation have no cap on their outside earned income but cannot engage in outside employment that conflicts with their official duties.12
In addition, executive branch employees may not accept gifts of over US$20 in value (or multiple gifts from a single source totalling US$50 in a calendar year), including 'transportation, local travel, lodgings and meals' that are given because of the official's position or that come from 'prohibited sources'.15 A prohibited source is a person or entity who (1) is doing or seeking to do business with or who is regulated by the official's agency or (2) has interests that may be substantially affected by performance or non-performance of the employee's official duties.16 In 2009, President Obama tightened restrictions for presidential appointees in the executive branch, banning all gifts from registered lobbyists, even those valued at under US$20.17 In 2017, President Trump signed a similar executive order precluding executive agency appointees from accepting any gifts from registered lobbyists.18
As discussed in Section II.v, above, gifts to members of Congress valued at less than US$50, or multiple gifts from a single person that do not exceed US$100 in a single calendar year, are permissible if they are not made by registered lobbyists or agents of a foreign government.19 Gifts with a value of under US$10 will not count towards the US$100 limit. House and Senate rules also contain several other narrow exceptions to the gift ban, including informational materials, contributions to a member's campaign fund, and food and refreshments of nominal value that do not constitute a meal. Additionally, members can attend 'widely attended events' free of charge where at least 25 non-congressional employees will be in attendance and the event is related to their official duties.
Executive branch employees are permitted to receive gifts of under US$20 but cannot receive gifts totalling US$50 from the same person in the same year.20 Exceptions for executive branch officials not appointed by the President exist for widely attended events and for food and refreshments provided when travelling abroad on official business, so long as the refreshments are not provided by a foreign government and do not exceed the official's daily allowance.21 All executive branch officials can receive gifts motivated by family relationship or personal friendship.
In general, the Federal Election Campaign Act prohibits any foreign national from contributing, donating, or spending funds, directly or indirectly, to any federal, state, or local election.22 Foreign nationals broadly covers foreign governments, political parties, corporations, associations, partnerships, individuals with foreign citizenship, and immigrants who do not have lawful permanent resident status.23
In addition, a domestic subsidiary of a foreign company may not establish a federal political action committee to make political contributions if the foreign corporation finances the PAC's establishment, administration or solicitation costs, or individual foreign nationals participate in the operation of the PAC, serve on its board, make decisions regarding PAC contributions or expenditures, or participate in selecting persons to operate the PAC.24
Finally, a domestic subsidiary of a foreign corporation (or a domestic corporation owned by foreign nationals) may not donate in connection with state and local elections if the activities are financed by the foreign parent or individual foreign nationals are involved in making donations.25
The 1938 Foreign Agents Registration Act (FARA) requires persons acting as agents of foreign principals in a political or quasi-political capacity to make periodic public disclosure of: (1) their relationship with a foreign principal, and (2) activities, receipts and disbursements in support of those activities.26 Administrative enforcement of the FARA is the responsibility of the DOJ, National Security Division, Counterintelligence and Export Control Section.
Historically, enforcement of the FARA has been relatively limited, but that is changing. Between 1966 and 2015, the DOJ brought only seven criminal FARA cases, and there were only three convictions.27 In 2017–2018, Special Counsel Robert Muller's investigation of Russia's efforts to interfere with the 2016 US presidential election resulted in prosecutions for FARA violations, including guilty pleas entered by President Trump's former campaign manager, Paul Manafort, and his associate Rick Gates, in connection with their previous work in Ukraine, and by former National Security Advisor Michael Flynn for false statements he made to the FBI regarding communications with the Russian Ambassador to the U.S. and work his company did for the Republic of Turkey.28 In March 2019, the Assistant Attorney General for National Security John Demers announced the DOJ's plan to treat FARA as 'an enforcement priority' and assign a dedicated former prosecutor from Special Counsel Muller's team to revamp the FARA enforcement unit.29 Since 2017, there have been eight FARA cases, including charges against Russian nationals and companies 'for committing crimes while seeking to interfere in the US political system' and a settlement with a prominent law firm (including a disgorgement of $4.6 million in fees) for false statements made during 'inquiries from the FARA Unit[.]'30 While many of the DOJ's views on the appropriate interpretation and application of FARA are not publicly available, the DOJ has published redacted copies of the confidential advisory opinions it issued since 1 January 2010 as well as three opinions it issued in 1984, 1988, and 2003.31
No US federal statute specifically addresses private commercial bribery. Federal prosecutors may, however, prosecute commercial bribery through the use of several existing laws. Section 1346 of Title 18 gives prosecutors broad leeway by extending liability under the mail and wire fraud statutes to 'a scheme or artifice to deprive another of the intangible right to honest services'. Honest services fraud has been used to prosecute employees of private companies who breach a fiduciary duty to their employers by, for example, taking or paying bribes.32 With respect to international business, another federal criminal statute that the DOJ has used to prosecute commercial bribery in some circumstances is the Travel Act, 18 USC Section 1952. The Travel Act makes it a crime to travel in interstate or foreign commerce or to use 'the mail or any facility in interstate or foreign commerce' with intent to 'promote, manage, establish, carry on, or facilitate the promotion, management, establishment or carrying on, of any unlawful activity'.
The definition of 'unlawful activity' broadly includes 'extortion [and] bribery . . . in violation of the laws of the State in which committed or of the United States'.33 This definition assimilates state commercial bribery laws (as well as the laws of the District of Columbia and federal territories) and provides a basis for federal criminal liability where an individual violates state commercial bribery laws and uses, for example, a phone, fax, wire transfer or email to further the commercial bribe, or travels across state lines in furtherance of the scheme. Currently, approximately 36 US states have commercial bribery laws.
For individuals convicted under Section 201 for bribery, both the payer and the recipient of the bribe may be punished by up to 15 years' imprisonment or a fine of up to US$250,000 or both, or triple the value of the bribe, whichever is greater.34 Violations of the gratuities provisions, on the other hand, are punishable by a maximum of two years' imprisonment and a fine of US$250,000.35
A violation of 18 USC Section 666 carries a maximum penalty of 10 years' imprisonment and a fine of US$250,000.36
A Hobbs Act violation is punishable by up to 20 years' imprisonment and a fine of up to US$250,000.37
Federal prosecutors have long used the mail and wire fraud statutes (18 USC Sections 1341 and 1343) to combat public and private corruption, and in the late 1980s, Congress created honest services fraud to give prosecutors another tool in battling corruption.38 In 1987, the Supreme Court held in McNally v. United States, 483 US 350 (1987), that 18 USC Sections 1341 and 1343 did not reach 'honest services fraud'. Congress responded by passing 18 USC Section 1346, which specifically defines a 'scheme or artifice to defraud' as including the failure to provide honest services.39 In United States v. Skilling, however, the Supreme Court narrowed the reach of the honest-services fraud statute to bribery and kickback schemes to avoid finding the statute unconstitutionally vague.40
In June 2016, the Supreme Court further narrowed the scope of honest services fraud, and the Hobbes Act, when it unanimously overturned the conviction of former Virginia Governor Bob McDonnell on grounds that federal prosecutors had erroneously relied on a 'boundless' definition of an 'official act' that could result in criminally liability under 18 USC Sections 1346 and 1951.41 McDonnell was convicted on federal bribery charges in 2014 for accepting US$175,000 in loans, gifts, and other benefits in exchange for arranging meetings, hosting promotional events, and contacting other government officials on the payee's behalf. The Court clarified that an official act must (1) be a decision or action on a 'question, matter, cause, suit, or controversy'; (2) 'involve a formal exercise of governmental power'; and (3) be something specific and focused that is 'pending' or 'may by law be brought' before a government official.42 Conversely, setting up a meeting, talking to another government official or organising an event, without more, does not constitute an official act, and thus cannot support convictions under 18 USC Sections 1346 and 1951.43 More recently, in August 2019, the Second Circuit declined to extend the higher 'official acts' standard in McDonnell to prosecutions under the FCPA and federal bribery statute 18 USC Section 666, supporting similar analysis by the third, fifth and sixth circuits.44
Congress adopted the Honest Leadership and Open Government Act of 2007 in response to lobbying scandals on Capitol Hill involving Jack Abramoff, a former lobbyist, and Randy 'Duke' Cunningham, a former House Representative.45 The statute bars any congressperson, congressional staffer, or employee of the executive branch, from taking or influencing an official act with the intent to make or influence private hiring decisions on the basis of political party affiliation (18 USC Section 227 (a)–(b)).
securing any improper advantage to obtain or retain business, or direct business to any person.46
The FCPA prohibits payments made directly or indirectly to 'any foreign official' or 'any foreign political party or candidate thereof, or any candidate for foreign political office'. The Act defines a foreign official as any 'officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organization, or any person acting in an official capacity for or on behalf of such government or department, agency, or instrumentality, or for or on behalf of any such public international organization'.47 Public international organisations include any entity designated as such by executive order of the President (e.g., the United Nations and the World Bank).48
the foreign state's extent of ownership of the entity.49
the general perception that the entity is performing official or governmental functions.50
In US v. Esquenazi, the US Court of Appeals for the Eleventh Circuit defined the term 'instrumentality' under the FCPA.51 In Esquenazi, the DOJ alleged that executives of a private telecommunications company in Florida used intermediaries to make almost US$1 million in payments to executives of the Haitian national telecommunications company, Teleco, in exchange for securing lower rates and other business advantages. The court held Teleco to be an 'instrument' of the Haitian government. The court defined instrumentality as 'an entity controlled by the government of a foreign country that performs a function the controlling government treats as its own'.52 The court enumerated non-exhaustive lists of factors to separately determine whether the government 'controls' the entity53 and whether the entity performs a function the government 'treats as its own'.54
It is, however, an affirmative defence to liability that a payment was a 'reasonable and bona fide expenditure, such as travel and lodging expenses . . . directly related' to the promotion of products or the execution of a contract.55 The DOJ has issued several Opinion Releases that provide some guidance with respect to gift-giving.56
Items of nominal value, such as cab fare, reasonable meals and entertainment expenses, or company promotional items, are unlikely to improperly influence an official, and, as a result, are not, without more, items that have resulted in enforcement action by DOJ or SEC. The larger or more extravagant the gift, however, the more likely it was given with an improper purpose.57
There are two primary affirmative defences to liability under the FCPA. First, as noted above, the FCPA allows reasonable and bona fide expenditures directly related to the promotion, demonstration or explanation of products and services or for the execution or performance of a contract with a foreign government.58 This defence, however, does not apply to all promotional expenses: 'If a payment or gift is corruptly made, in return for an official act or omission, then it cannot be a bona fide, good-faith payment, and this defense would not be available.'59
Second, it is a defence that the payment was lawful under the written laws of the foreign country.60 This defence is rarely of much practical utility, since the conduct in question must be expressly permitted by a country's written laws (i.e., the absence of an express prohibition on the particular conduct is not sufficient).
The FCPA contains a narrowly defined exception for 'facilitating' or 'grease' payments made to expedite 'routine governmental action by a [covered official]'.61 Routine governmental action is defined as:
actions of a similar nature.62
The FCPA emphasises that the exclusion applies only to non-discretionary actions related to the award of business: 'routine governmental action does not include any decision by a foreign official whether, or on what terms, to award new business to or to continue business with a particular party'.63 In practice, US authorities have also construed this exception only to apply to relatively small payments, though the FCPA is silent on this point. At a minimum, 'grease' payments should be approached with considerable caution. FCPA compliance programmes are trending away from permitting such payments.
In addition to payments made directly to foreign officials, political parties, and candidates for office, the FCPA also prohibits any payment to 'any person, while knowing that all or a portion of such money or thing of value will be offered, given, or promised, directly or indirectly', to a covered official for a proscribed purpose. The FCPA, as amended in 1988, defines 'knowing' as actual awareness that an improper payment will be made or a firm belief that such a payment is 'substantially certain'.64 The legislative history emphasises that this standard encompasses instances of 'wilful blindness', 'conscious disregard' or 'deliberate ignorance' of the acts of an intermediary.65
Both companies and individuals can face liability for violations of the FCPA. The FCPA's jurisdiction extends to 'issuers', 'domestic concerns' and, in some circumstances, foreign nationals or businesses.66 An issuer is a corporation that has issued securities registered in the United States or is required to make periodic reports to the SEC.67 A domestic concern is any individual who is a citizen, national or resident of the United States, or any business entity with its principle place of business in the United States or that is organised under the laws of any state of the United States.68 US issuers and US persons (i.e., US nationals and legal entities organised under the laws of the United States or any state thereof) may be held liable for any act in furtherance of a corrupt payment, regardless of any connection to the territory of the United States or US interstate commerce. Jurisdiction will apply with respect to foreign issuers and non-citizen US residents if they make use of the US mails or US interstate commerce in furtherance of a corrupt payment.69
A foreign national or company is subject to liability if it causes an act in furtherance of a corrupt payment within the territory of the United States.70 US parent companies can also be held liable for the acts of their foreign subsidiaries if they authorised, directed, or controlled the activity in question. In one recent SEC enforcement case, a federal court found that it had jurisdiction over foreign national defendants, executives of Magyar Telekom who allegedly bribed officials in Macedonia and Montenegro, based largely on emails relating to the corrupt scheme that had passed through computer servers in the United States.71 The court found jurisdiction even though none of the defendants were physically present in the United States when sending or receiving the emails.72 Furthermore, the court found that because Magyar was an issuer, any attempt by the foreign defendants to conceal their bribes in relation to public filings constituted conduct sufficiently 'directed toward the United States' to give rise to personal jurisdiction.73
Self-reporting of violations and cooperation with the DOJ and the SEC are factors that can lead to reduced monetary penalties, or an otherwise more favourable settlement, or a decision by the government not to prosecute. For example, under the US Sentencing Guidelines, companies are only eligible for certain sentence mitigation credit if they self-reported the violation.74 In determining whether to bring charges, federal prosecutors are required to consider the Principles of Federal Prosecution of Business Organizations (the Principles), which explicitly provide for consideration of cooperation and self-reporting.75
Similarly, the SEC will consider cooperation and self-reporting as mitigating factors under its 2001 Report of Investigation pursuant to Section 21(a) of the Securities and Exchange Act of 1934, which is commonly referred to as the 'Seaboard Report'.76
In the November 2012 Resources Guide to the FCPA, the DOJ and SEC reaffirmed that both agencies 'place a high premium on self-reporting, along with cooperation and remedial efforts, in determining the appropriate resolution of FCPA matters' in their Resources Guide.77 Even after the publication of this guidance, however, the adequacy of the DOJ and SEC's guidance regarding the benefits of self-reporting and cooperation, and the sufficiency of those benefits, are still hotly debated topics within US legal and corporate circles.78
With regard to cooperation by corporations, in November 2017, the Department refined its approach on self-reporting, cooperation, and remediation in its FCPA Corporate Enforcement Policy, which formalised the year-and-a-half-long FCPA Pilot Program the Department announced in April 2016.79 The Program, which applied to business organisations only, reflected an effort by the DOJ 'to increase transparency regarding charging decisions in corporate prosecutions', and to 'increase the Fraud Section's ability to prosecute individual wrongdoers whose conduct might otherwise have gone undiscovered' by making full disclosure of individual wrongdoing a condition of full cooperation by business organisations.80
The Corporate Enforcement Policy retains many of the features of the original Pilot Program, but goes further to incentivise self-reporting in two ways. First, it creates a rebuttable 'presumption' that companies will receive a full declination of prosecution if they voluntarily self-disclose, remediate misconduct, and cooperate with the Department's investigation.81 This differs from the language of the earlier Pilot Program, which stated only that the Department would 'consider' such declinations. The new Policy's presumption may be overcome, however, in cases with 'aggravating circumstances involving the seriousness of the offense or the nature of the offender'.82 Second, the new Policy commits the Department to providing specific fine reductions for non-recidivist companies that meet the Policy's requirements. Specifically, the Policy states that where aggravating factors overcome the presumption of a declination, a company will still receive a 50 per cent discount off the low end of the fine recommended under the US Sentencing Guidelines, and generally will not be required to appoint a corporate compliance monitor.83 Under the prior Pilot Program, companies in this situation were promised only a discount of 'up to' 50 per cent.
In March 2019, the DOJ released additional updates to its Corporate Enforcement Policy, allowing companies to secure cooperation credit for providing information on 'all individuals substantially involved[,]' and relaxing the prior requirement under the September 2015 DOJ policy memorandum, commonly referred to as the Yates Memo.84 The revised policy also extends declination presumptions to companies engaged in acquisitions that uncover misconduct during the due diligence process, voluntarily disclose it, and cooperate in follow-up investigations.85 In October 2018, the DOJ also updated its guidance on the principles prosecutors in the Criminal Division must use to assess if a monitor is needed, including if the misconduct (1) involved manipulation of books and records or an inadequate compliance program; (2) was pervasive and involved senior management; and (3) was remedied through the company's significant investment in the compliance programme.86
Last year, the Department introduced a new Policy on Coordination of Corporate Resolution Penalties, which aims to 'discourage disproportionate enforcement of laws by multiple authorities' – also described as 'piling on'.87 The aim of the Policy is to avoid unfair duplicative penalties from overlapping enforcement agencies, foreign and domestic, directed at the same conduct. The Policy provides that enforcement authority should not be used against companies for purposes unrelated to the investigation and prosecution of crimes, and that Department lawyers and enforcement authorities in other federal, state or local offices should coordinate with one another to achieve an overall equitable result.88 The Policy also sets out factors Department lawyers should evaluate to determine when multiple penalties serve the interests of justice in a particular case.89 Relatedly, in March 2019, the US Commodity Futures Trading Commission (CFTC) announced, for the first time, that it would investigate 'violations of the [Commodity Exchange Act] carried out through foreign corrupt practices[,]' and work together with the DOJ, SEC and other law enforcement agencies to avoid 'pil[ing] onto other existing investigations.'90 A month after the announcement, a large global commodity trading company disclosed that the CFTC is coordinating with the DOJ to investigate the company and its subsidiaries for potential violations of the CEA 'through corrupt practices in connection with commodities.'91
Plea-bargaining and negotiated settlements play a major role in FCPA enforcement as the criminal and civil penalties involved following an adverse result at trial can be severe. This is particularly true with respect to companies, which have strong incentives to avoid adverse publicity and prolonged uncertainty. Moreover, as mentioned in Section X, below, genuine cooperation with an investigation can result in more favourable settlements, including reduced monetary penalties. The DOJ has also increasingly turned to alternative dispositions such as deferred prosecution agreements (DPAs) and non-prosecution agreements (NPAs), which can allow a company to avoid criminal conviction. The SEC has recently introduced these forms of settlement as well. On 22 April 2013, the SEC announced its first ever FCPA-related NPA, in connection with its investigation into the Ralph Lauren Corporation for bribes paid by a subsidiary to government officials in Argentina from 2005 to 2009.92 When announcing the NPA, the SEC noted that its decision not to charge the company was 'due to the company's prompt reporting of the violations on its own initiative, the completeness of the information it provided, and its extensive, thorough, and real-time cooperation with the SEC's investigation'.93
Foreign companies can be prosecuted under Section 78dd-3, part of the 1998 amendments to the Act. The DOJ explains that: 'A foreign company or person is now subject to the FCPA if it takes any act in furtherance of the corrupt payment while within the territory of the United States.'94 The statute does not also require that such acts make use of the mail or any other instrumentality of interstate commerce. The DOJ interprets this Section as 'conferring jurisdiction whenever a foreign company or national causes an act to be done within the territory of the United States by any person acting as that company's or national's agent'.95
In a 2011 case, a US court dismissed an FCPA 78dd-3 charge against a foreign defendant who mailed a package containing an allegedly corrupt purchase agreement from the United Kingdom to the United States because the act of mailing the package took place outside the United States.96 Moreover, the US Court of Appeals for the Second Circuit held in August 2018 that non-resident foreign nationals cannot be held liable for violating the FCPA under accomplice liability theories such as conspiracy or aiding and abetting unless they acted as an agent of a domestic concern or were physically present in the United States.97 A likely result of this ruling is that it may be harder for the DOJ to bring future FCPA cases against foreign nationals acting wholly extraterritorially.
Companies that violate the anti-bribery provisions of the FCPA may be fined the greater of US$2 million per violation or twice the gain or loss resulting from the improper payment. Individuals who violate the anti-bribery provisions are subject to penalties of the greater of US$250,000 per violation or twice the gain or loss resulting from the improper payment and may also face up to five years' imprisonment.98 The applicable statute of limitations is five years. Officers, directors, stockholders and employees of business entities may be prosecuted for violations of the FCPA irrespective of whether the business entity itself is prosecuted. Any fine imposed upon an officer, director, stockholder, employee or agent may not be paid or reimbursed, directly or indirectly, by the business entity.99
The FCPA's anti-bribery provisions provide that the DOJ or the SEC, as appropriate, may impose civil penalties not greater than US$10,000 per violation.100 In practice, however, these relatively modest civil fines tend not to be meaningful, both because the DOJ invariably brings FCPA enforcement cases as criminal cases and because the SEC frequently uses other civil enforcement powers available to it. The SEC's civil enforcement powers include issuing administrative cease-and-desist orders and, through court action, obtaining civil injunctions; civil fines typically are much smaller than the profits disgorged by the SEC.101 Importantly, in June 2017, the US Supreme Court ruled that claims for disgorgement brought by the SEC are governed by a five-year statute of limitations.102 In Kokesh v. SEC, the Court unanimously held that disgorgement, as it is applied in SEC enforcement proceedings, operates as a 'penalty' for purposes of the general federal statute of limitations applicable to 'actions for the enforcement of . . . any . . . penalty', thus subjecting this remedy to the same statute of limitations as claims by the SEC for civil fines, penalties other than disgorgement and forfeitures.103
The FCPA's accounting provisions require all issuers to (1) keep books, records, and accounts that accurately reflect the issuer's transactions; and (2) establish and maintain a system of internal controls that are sufficient to ensure accountability for assets in accordance with management's 'general or specific authorization'.104 The records must be kept to 'reasonable detail', which the Act defines as the level of detail that 'would satisfy prudent officials in the conduct of their affairs'.105 The FCPA holds issuers strictly liable on civil grounds for the bookkeeping violations of consolidated subsidiaries and affiliates.106 Criminal liability arises when a firm or person either knowingly circumvents or knowingly fails to implement internal accounting controls; or knowingly falsifies books, records, or accounts.107
Where an issuer holds 50 per cent or less of the voting power of a domestic or foreign firm, the FCPA requires that the issuer 'proceed in good faith to use its influence, to the extent reasonable under the issuer's circumstances, to cause such domestic or foreign firm to devise and maintain a system of internal accounting controls consistent with [the FCPA's requirements]'.108
Both the books and records and internal controls provisions of the FCPA are frequently used to prosecute bribery-related conduct. Sometimes these provisions are used in addition to the anti-bribery provisions; in other circumstances these provisions are used exclusively to prosecute bribery-related conduct, including in situations where there may be jurisdictional or proof challenges to an anti-bribery charge, as well as part of a negotiated disposition.109
The FCPA's accounting provisions are also used to prosecute cases of commercial bribery, as well as various forms of fraud and accounting-related misconduct.110
Companies that 'knowingly and wilfully' violate the books and records and internal controls provisions of the FCPA may be fined the greater of US$25 million per violation or twice the gain or loss resulting from the improper conduct. Individuals who violate these provisions are subject to penalties of the greater of US$5 million per violation or twice the gain or loss resulting from the improper conduct and may also face up to 20 years' imprisonment.111 The applicable statute of limitations is five years.112
The SEC's civil enforcement powers with respect to violations of the accounting provisions are similar to its powers with respect to violations of the anti-bribery provisions. They include cease-and-desist orders, civil fines and disgorgement of profits.113
The US Internal Revenue Code expressly prohibits the tax deductibility of domestic and foreign bribes.114
Both foreign and domestic bribery are considered predicate offences under US federal money laundering statutes where a financial transaction occurs in whole or in part in the United States.115 Violation of the money laundering statute does not require a proof of violation of the underlying unlawful activity.116
Knowledge of criminal activity can be established from facts indicating that underlying criminal activity is likely; thus, wilful blindness is covered by the statute.117 A transaction can constitute almost any form of surrendering the proceeds from an underlying crime.118 The effect on foreign or interstate commerce need only be de minimis.119 Proceeds of crime is defined in the statute as 'any property derived from or obtained or retained, directly or indirectly, through some form of unlawful activity',120 and courts have been permissive in interpreting the scope of the text.121
However, there is some uncertainty as to when 'proceeds' means profits from the illegal activities or just the cash flow from all receipts associated with the activity. A plurality of the Supreme Court held that proceeds means profits in the context of an illegal gambling business.122 Most lower courts have interpreted this to mean that the proceeds-means-profit principle only applies where there was a risk that the offender would be effectively punished twice for the same transaction, where the transaction is part of the predicate offence.123
In recent years, US and foreign officials have made use of money laundering charges in prosecuting – among others – corruption cases involving the Venezuelan state-owned oil company, PDVSA, and the Malaysian sovereign wealth fund, 1Malaysia Development Berhad (1MDB).124
Most courts have defined promotion as any transaction that helps the underlying offence continue to prosper.125 Under Section 1956(a)(2), the international transmission or transportation provision, all that is required is that the offender use the transported funds to promote a predicate offence; the funds need not themselves flow from a predicate offence.126
Concealment is defined as having a purpose to conceal, so it would be an offence even if the concealment is not successful.127 Engaging in unnecessary transactions to add extra degrees of separation between an individual and the source of the funds supports a finding of 'concealment' under the money laundering statute.128
Evidence that may be considered when determining whether a transaction was designed to conceal . . . includes, among others, [deceptive] statements by a defendant probative of intent to conceal; unusual secrecy surrounding the transactions; structuring the transaction to avoid attention; depositing illegal profits in the bank account of a legitimate business; highly irregular features of the transaction; using third parties to conceal the real owner; a series of unusual financial moves cumulating in the transaction; or expert testimony on practices of criminals.129
The money laundering statute prohibits the structuring of a transaction to avoid an obligation to report.130 The reporting requirements for financial transactions designed to prevent money laundering is discussed in Section V.ix. One of the requirements for the offence is actual knowledge of the underlying reporting requirement.131
Structuring violations are more commonly brought under 31 USC Section 5324. It is prohibited for a person to cause the failure to submit a report required by law, to cause a false report to be submitted, or to structure transactions in such a way as to evade reporting requirements.132
Money laundering laws are used to prosecute bribery-related conduct. For example, in the prosecution of a Swiss lawyer for foreign bribery and money laundering activity, the money laundering charges succeeded where the FCPA charges failed on jurisdictional grounds.133
Because its scope can be wider than the coverage of the FCPA, money laundering charges are often included as a count in cases of potential corruption.134
In addition, on a number of occasions the DOJ has used the money laundering laws to prosecute foreign officials who are the recipients of corrupt payments and who cannot be prosecuted under the FCPA itself.135
Violations of Sections 1956(a)(1) and (2) are punishable by a fine of no more than US$500,000 or twice the value of the property involved in the transaction, whichever is greater, and imprisonment for not more than 20 years.136 Violations of Section 1957 are punishable by a fine of not more than twice the amount of the criminally derived property involved in the transaction and imprisonment for not more than 10 years.137
Any property, real or personal, involved in a transaction or attempted transaction in violation of Sections 1956(a)(1) and (2) is also subject to forfeiture pursuant to 18 USC Section 981(a)(1)(A) and (C).138 As part of its commitment to the global fight against international corruption, the DOJ launched the Kleptocracy Asset Recovery Initiative in 2010 to specifically target and recover stolen assets that are laundered into the United States. In July 2016, the DOJ filed civil forfeiture complaints seeking to recover more than US$1 billion in assets associated with an international conspiracy to launder funds misappropriated from the Malaysian sovereign wealth fund, 1MDB.139 A year later, the DOJ filed a supplemental civil forfeiture action seeking recovery of assets valued at approximately US$540 million.140 The complaints filed by the DOJ represent the largest single action brought under the Kleptocracy Asset Recovery Initiative to date.
financial institution are obligated to report cash transactions involving US$10,000 or more;141
trades and businesses other than financial institutions are obligated to report cash transactions involving US$10,000 or more;142
persons in the US are required to report foreign financial agency transactions;143 and
financial institutions are required to file suspicious transaction reports under appropriate circumstances.144
To establish that a violation of Section 5322 was wilful, the burden is on the government to prove that the accused knew that his or her breach of the statute was unlawful.145
Violations of Section 5322 are punishable by a term of imprisonment of not more than five years or a fine of not more than US$250,000, or both.146 Violations committed during the commission of another federal crime or as part of a pattern of illegal activity involving more than US$100,000 over the course of 12 months can be punished by a term of imprisonment of not more than 10 years or a fine of not more than US$500,000, or both.147
The United States has made two relevant reservations to these treaties: under the UNCAC, the US has declined to provide a specific right of action for corruption; and under the Inter-American Convention against Corruption, the US has declined to enact laws expressly rendering illegal the 'illicit enrichment' as defined in the Convention. Article IX of the Inter-American Convention requires a state party to, subject to the fundamental principles of its legal systems, 'establish under its laws as an offense a significant increase in the assets of a government official that he cannot reasonably explain in relation to his lawful earnings during the performance of his functions'.148
In July 2012, the Stop Trading on Congressional Knowledge Act (the STOCK Act) was enacted. The STOCK Act bans insider trading on Capitol Hill. The STOCK Act was a response to public reaction to an investigative news television broadcast questioning whether lawmakers made investments based on their knowledge of legislative activity.149 President Obama had also called for such an act in his 24 January 2012 State of the Union Speech.150 The STOCK Act provides a variety of mechanisms for preventing insider trading and increasing transparency to the public. It covers legislators, executive branch officials, and their spouses and children.151
The attorney-client privilege is one of the oldest and best recognised privileges for confidential communications between a client and his or her attorney. The US Supreme Court has recognised the privilege, stating that by assuring confidentiality the privilege encourages clients to make 'full and frank' disclosure to their attorneys, who are then better able to provide candid advice and effective representation.152
Notably, the Dodd-Frank Wall Street Reform and Consumer Protection Act (2010) offers significant incentives and increases protections for whistle-blowers who provide original information concerning violations of the federal securities laws. In response to this legislation, in 2012 the SEC has established a Whistleblower Office to administer its whistle-blower programme.153 These developments are significant for domestic and foreign 'issuers' of securities because the FCPA is among the US securities laws covered by these Dodd-Frank whistle-blower provisions, so that employees who blow the whistle on foreign official bribery may now be eligible for significant recoveries. A recent unanimous decision from the US Supreme Court clarified that the anti-retaliation provisions of Dodd-Frank apply only to persons who have reported alleged securities violations to the SEC, not to those who have made complaints solely within a corporation.154
The existence of a compliance programme, whether effective or not, is not a defence to prosecution under the FCPA or any other federal bribery-related statute. The existence of an effective compliance and ethics programme is considered as a sentencing mitigation factor under Chapter 8 of the US Sentencing Guidelines. In addition, under the DOJ's Principles of Prosecution of Business Organizations, federal prosecutors are required to consider as one of the factors in deciding whether to charge an organisation with a crime, 'the existence and effectiveness of the corporation's pre-existing compliance program'.155
Significantly, in 2012 the DOJ announced its decision not to prosecute a company after an FCPA investigation, citing the company's pre-existing compliance programme as one reason for that decision, along with its self-disclosure and robust cooperation.156 Similarly, in 2013 the SEC praised a company's 'enhanced compliance program' and compliance training as among the factors that resulted in the SEC's decision to enter into a Non-Prosecution Agreement with the company rather than charge it with FCPA violations.157
In February 2017 the DOJ released the Evaluation of Corporate Compliance Programs (the Evaluation Guidance), a list of common questions that the Fraud Section may ask in evaluating corporate compliance programmes in the context of a criminal investigation.158 The questions are divided into 11 topics: (1) analysis and remediation of underlying misconduct; (2) senior and middle management; (3) autonomy and resources; (4) policies and procedures; (5) risk assessment; (6) training and communication; (7) confidential reporting and investigation; (8) incentives and disciplinary measures; (9) continuous improvement, periodic testing and review; (10) third-party management; and (11) mergers and acquisitions.159 The Evaluation Guidance gives companies insight into the Fraud Section's views on the components of an effective compliance programme and builds upon the DOJ's hiring of a full-time compliance expert in 2015.
Most recently, in April 2019, the DOJ's Criminal Division expanded the Evaluation Guidance to provide a framework for how prosecutors will evaluate corporate compliance programmes.160 Although the updated guidance covers the same 11 topics, it focuses the evaluation on whether the corporate compliance programme: (1) is well designed; (2) is applied earnestly and in good faith; and (3) actually works in practice.161
Enforcement of the FCPA has continued to be a significant priority of US enforcement agencies. Just in the first half of 2019, the DOJ and SEC together assessed corporate penalties of US$1.5 billion, surpassing the combined corporate penalties for all of 2018. In March 2019, then-Deputy Attorney General Rod Rosenstein stated that over the previous year, the DOJ 'increased its prosecutions of white collar crime and other priorities.'162 He further emphasised the continued global nature of the enforcement mission, saying 'international cooperation is essential to prohibit corruption by multinational corporations.'163 At around the same time, the FBI announced that it was expanding its international corruption unit to Miami, Florida, following 'the success of the FBI's international corruption squads operating in New York, Los Angeles, and Washington, D.C.'164 Similarly, in September 2019, SEC Chairman Jay Clayton remarked that his office 'has brought nearly 80 FCPA cases in the past five years alone, involving alleged misconduct in more than 60 countries' and while he lamented that the United States is 'acting largely alone', he stated that he had no intentions of changing 'the FCPA enforcement posture of the SEC'.165
Notably, the DOJ and SEC have continued to promote and seek to reward corporate cooperation and self-disclosure in enforcement actions. Last year, the DOJ formalised the FCPA Pilot Program, an initiative that aimed to incentivise companies to report alleged violations as a means of obtaining mitigation credit or a declination to prosecute. In March 2019, the DOJ further revised the FCPA Corporate Enforcement Policy to offer a declination presumption to successor companies that uncover and disclose misconduct discovered through pre- or post-acquisition due diligence and cooperate in follow-up investigations.166 As Assistant Attorney General Brian Benczkowski explained earlier this year, the policy 'avoids chilling acquisition activity by law-abiding companies, who might otherwise walk away from worthwhile investments due to the risk of FCPA enforcement.'167 In addition, the revised Corporate Enforcement Policy allows companies seeking voluntary disclosure credit to report 'all relevant facts about all individuals substantially involved in or responsible for the violation of law,' rather than disclosure on every employee involved in the corrupt conduct. 168 In loosening this component of the Yates Memo, then-Deputy Attorney General Rosenstein noted that the change was necessary considering the need for policies that 'work in the real world of limited investigative resources.'169 Relatedly, since 2012, the SEC has 'awarded approximately $381 million' to over 60 whistle-blowers, including the first whistle-blower award for successful enforcement under Exchange Act Rule 21F-4(c), a provision that incentivises employees to report misconduct to the SEC within four months of reporting the same internally.170
The DOJ has also reaffirmed its commitment to prioritising individual prosecutions. As then-Deputy Attorney General Rosenstein recently explained, '[w]hile pursuit of criminal and civil remedies against corporations is important, we should always focus on the individuals responsible for misconduct . . . The most effective deterrent to corporate criminal misconduct is identifying the people who commit crimes and sending them to prison. Absent extraordinary circumstances, a corporate resolution should not protect individuals from criminal liability.'171 The DOJ's 'individual accountability policy is designed to drive change, and lead more companies to implement meaningful proactive compliance programs' by holding accountable individuals 'who play significant roles in setting a company on a course of criminal conduct'.172 As a result, the DOJ has brought over a dozen FCPA enforcement actions in 2019 against individuals, ranging from business executives and consultants to government officials, and this attention to individual prosecutions is expected to continue.
1 Mark F Mendelsohn is a partner at Paul, Weiss, Rifkind, Wharton & Garrison LLP. The author would like to thank Lina Dagnew and Jonathan Silberstein-Loeb for their substantial assistance in the preparation of this chapter.
5 See, e.g., United States v. Rabbitt, 583 F.2d 1014, 1023 (8th Cir. 1978), abrogated on other grounds by McNally v. United States, 483 U.S. 350, 356 (1987).
8 5 U.S.C. §501 (1978); U.S. Office of Personnel Management, 2019 Pay Tables for Executive and Senior Level Employees (2019), available at www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2019/EX.pdf.
12 18 U.S.C. §208; 5 C.F.R. §2635; U.S. Office of Gov't Ethics, Outside Employment Limitations, available at https://www.oge.gov/Web/oge.nsf/Resources/Outside+Employment+Limitations.
14 See Rule 25 of the Rules of the House of Representatives (2008), available at https://ethics.house.gov/sites/ethics.house.gov/files/documents/2008_House_Ethics_Manual.pdf. Standing Rule XXXV of the Senate (2015), available at https://www.ethics.senate.gov/public/index.cfm/files/serve?File_id=efa7bf74-4a50-46a5-bb6f-b8d26b9755bf#page=9.
17 Exec. Order No. 13490 74 FR 4673, 2009 WL 166652 (2009), available at https://oge.gov/Web/OGE.nsf/Executive%20Orders/A70F962587DAC28F85257E96006A90F2/$FILE/23a5e4eeaffd4e14b4387b40b0eae5963.pdf?open.
18 Exec. Order No. 13770, available at https://www.whitehouse.gov/presidential-actions/executive-order-ethics-commitments-executive-branch-appointees/.
19 See footnote 14 above. For general background on the House and Senate Rules see, House Committee on Ethics, The House Gift Rule, available at http://ethics.house.gov/gifts/house-gift-rule; Senate Select Committee on Ethics, Gifts, available at www.ethics.senate.gov/public/index.cfm/gifts.
20 5 C.F.R. §2635.204(a); U.S. Office of Gov't Ethics, Gifts From Outside Sources, available at https://www2.oge.gov/Web/oge.nsf/Resources/Gifts+from+Outside+Sources.
21 5 C.F.R. §2635.204.
22 52 U.S.C. §30121.
23 52 U.S.C. §30121(b).
24 11 C.F.R. 110.20(i); the Federal Election Committee, Foreign Nationals Brochure, available at
26 22 U.S.C. §611 et seq.
27 Carrie Levine, What is FARA? Understanding the Foreign Agents Registration Act, The Center for Public Integrity (May 31, 2018), available at www.publicintegrity.org/2018/05/31/21806/what-fara-understanding-foreign-agents-registration-act.
28 See Dep't of Justice, Recent FARA Cases, available at https://www.justice.gov/nsd-fara/recent-cases; see also Manafort Superseding Indictment (June 8, 2018), available at www.justice.gov/file/1070326/download.
29 Katie Benner, Justice Dept. to Step Up Enforcement of Foreign Influence Laws, N.Y. Times (Mar. 6, 2019), https://www.nytimes.com/2019/03/06/us/politics/fara-task-force-justice-department.html.
30 Dept' of Justice, FARA Advisory Opinions, available at https://www.justice.gov/nsd-fara/advisory-opinions#.
32 For example, a manager at Apple was convicted of wire fraud for accepting kickbacks in exchange for providing information to Apple suppliers on price targets and future products. Jim Edwards, An Apple Exec Is Going To Prison For Taking Kickbacks On Leaked Information (Dec. 8, 2014), available at www.businessinsider.com/apple-paul-shim-devine-sentenced-2014-12.
33 18 U.S.C. §1952(b) (2012).
34 18 U.S.C. §201(b); 18 U.S.C. §3571(b). See also Sun-Diamond, 526 U.S. at 405. Corporations convicted under 18 U.S.C. 3571(c) may be fined up to US$500,000.
35 18 U.S.C. §201(c); 18 U.S.C. §3571.
36 18 U.S.C. §666(a); 18 U.S.C. §3571.
37 18 U.S.C. §1951; 18 U.S.C. §3571.
38 Peter J Henning and Lee J Radek, The Prosecution and Defense of Public Corruption, 8 (2011).
39 18 U.S.C. §1346.
40 130 S. Ct. 2896, 2929 (2010).
41 McDonnell v. United States, 139 S.Ct. 2355 (2016).
42 Id. at 2357.
44 See generally United States v. Ng Lap Seng, 934 F.3d 110 (2nd Cir. 2019).
45 Peter J Henning and Lee J Radek, The Prosecution and Defense of Public Corruption, 67 (2011).
46 See 15. U.S.C. §§78dd-1(a), 78dd-2(a), 78dd-3(a) (1998).
47 15 U.S.C. §78dd-1(f )(1)(a).
48 8 C.F.R. § 319.5 (2004).
49 See United States v. Carson, 2011 U.S. Dist. LEXIS 88853 (C.D. Cal. 18 May 2011); 15 U.S.C. §§78dd-1(f)(1), 78dd-2(h)(2), 78dd-3(f )(2).
50 A Resource Guide to the U.S. Foreign Corrupt Practices Act (Nov. 2012) at 20, available at https://www.justice.gov/sites/default/files/criminal-fraud/legacy/2015/01/16/guide.pdf.
51 United States v. Esquenazi, 752 F.3d 912, 925 (11th Cir. 2014).
53 Id. ('[C]ourts and juries should look to the foreign government's formal designation of that entity; whether the government has a majority interest in the entity; the government's ability to hire and fire the entity's principals; the extent to which the entity's profits, if any, go directly into the governmental fisc, and, by the same token, the extent to which the government funds the entity if it fails to break even; and the length of time these indicia have existed.')
54 Id. ('Courts and juries should examine whether the entity has a monopoly over the function it exists to carry out; whether the government subsidizes the costs associated with the entity providing services; whether the entity provides services to the public at large in the foreign country; and whether the public and the government of that foreign country generally perceive the entity to be performing a governmental function.')
55 15 U.S.C. § 78dd-l(c)(2)(A)-(B). (See discussion of defences, Part D).
56 See, e.g., DOJ FCPA Review Procedure Release Op.'s 81-01 (1981), 81-02 (1981), 82-01 (1982).
57 A Resource Guide to the U.S. Foreign Corrupt Practices Act (Nov. 2012) at 15, available at www.justice.gov/criminal/fraud/fcpa/guide.pdf.
58 15 U.S.C. §78dd-l(c)(2)(A)-(B).
59 H.R. Conf. Rep. No. 100-418, at 922 (1988).
60 15 U.S.C. §78dd-l(c)(l).
61 15 U.S.C. §§78dd-l(b), 78dd-2(b), 78dd-3(b).
62 15 U.S.C. §78dd-3(f )(4).
63 15 U.S.C. §§78dd-l(f )(3), 78dd-2(h)(4), 78dd-3(f )(4).
64 15 U.S.C. §§78dd-1(f )(2), 78dd-2(h)(3), 78dd-3(f )(3).
65 H.R. Conf. Rep. No. 100-418, at 919-21 (1988).
66 15 U.S.C. §§78dd-l(a), 78dd-2(a).
67 15 U.S.C. §78dd-l(a).
68 15 U.S.C. §78dd-2(h).
69 15 U.S.C. §§78dd-1(a), 78dd-2(a).
70 15 U.S.C. §78dd-3(a).
71 See SEC v. Straub, No. 1:11-cv-09645-RJS (S.D.N.Y. Feb. 8, 2013).
73 Id. But see SEC v. Steffen, No. 1:11-cv-09073-SAS (S.D.N.Y. Feb. 19, 2013) (finding no personal jurisdiction over a foreign defendant who allegedly pressured executives to authorise bribes during a telephone call with the United States and commenting that 'the exercise of jurisdiction over foreign defendants based on the effect of their conduct on SEC filings is in need of a limiting principle').
74 U.S.S.G. §8C2.5(g)(1).
75 Memorandum from Mark R Filip, Deputy Attorney Gen., Dep't of Justice, on Principles of Fed. Prosecution of Bus. Orgs. to Heads of Dep't Components and U.S. Attorneys, U.S.A.M. §§9–28.700 (28 August 2008), available at www.usdoj.gov/opa/documents/corp-charging-guidelines.pdf.
76 See Exchange Act Release No. 44969, Accounting and Auditing Enforcement Release No. 1470 (23 October 2001).
77 A Resource Guide to the U.S. Foreign Corrupt Practices Act (Nov. 2012) at 54, available at
78 See., e.g., Bruce Carton, U.S. Chamber of Commerce Pushes for Further FCPA Clarity and Reforms, (Feb. 20, 2013), available at www.complianceweek.com/us-chamber-of-commerce-pushes-for-further-fcpa-clarity-and-reforms/15464.article.
79 Rod J. Rosenstein, then-Deputy Attorney Gen., Dep't of Justice, Remarks at the 34th International Conference on the Foreign Corrupt Practices Act (Nov. 29, 2017), www.justice.gov/opa/speech/deputy-attorney-
80 U.S. Dep't of Justice, The Fraud Section's Foreign Corrupt Practices Act Enforcement Plan and Guidance 2 (the 'Memorandum') (Apr. 5, 2016), www.justice.gov/opa/file/838386/download. In addition to the Pilot Program, the memorandum also announces other enhancements to DOJ's FCPA enforcement framework, including an increase in DOJ and FBI staff dedicated to FCPA prosecutions and enhanced collaboration efforts with foreign authorities.
81 See Dep't of Justice, Justice Manual, § 9-47.120 (revised Mar. 2019), available at https://www.justice.gov/jm/jm-9-47000-foreign-corrupt-practices-act-1977.
84 Id. at § 9-47.120; DOJ memorandum authored by Deputy Attorney General Sally Quillian Yates (Yates Memo) on Individual Accountability for Corporate Wrongdoing (9 September 2015) at 2-5, www.justice.gov/dag/file/769036/download.
85 See Dep't of Justice, Justice Manual, § 9-47.120 (revised Mar. 2019), available at https://www.justice.gov/jm/jm-9-47000-foreign-corrupt-practices-act-1977.
86 See Memorandum from Brian A. Benczkowski, Assistant Attorney General, to All Criminal Division Personnel, Selection of Monitors in Criminal Division Matters (Oct. 11, 2018), available at https://www.justice.gov/criminal-fraud/file/1100366/download.
87 Rod J. Rosenstein, then-Deputy Attorney Gen., Dep't of Justice, Remarks to the New York City Bar White Collar Crime Institute (May 9, 2018), www.justice.gov/opa/speech/
deputy-attorney-general-rod-rosenstein-delivers-remarks-new-york-city-bar-white-collar.
88 Memorandum from Rod Rosenstein, Deputy Attorney Gen., Dep't of Justice, to Heads of Dep't Components U.S. Att'ys Policy on Coordination of Corporate Resolution Penalties (May 9, 2018), www.justice.gov/opa/speech/file/1061186/download.
90 James M. McDonald, Commodity Futures Trading Commission Director of Enforcement, Remarks at the American Bar Association's National Institute on White Collar Crime (Mar. 6, 2019), available at https://www.cftc.gov/PressRoom/SpeechesTestimony/opamcdonald2.
91 News Release, Glencore, Announcement re the Commodity Futures Trading Commission (April 25, 2019), available at https://www.glencore.com/media-and-insights/news/announcement-re-the-commodity-futures-trading-commission.
92 SEC Press Rel. 2013-65, SEC Announces Non-Prosecution Agreement With Ralph Lauren Corporation Involving FCPA Misconduct (22 April 2013), www.sec.gov/News/PressRelease/Detail/PressRelease/1365171514780.
94 U.S. Dep't of Justice, U.S.A.M., Criminal Resource Manual §§9–1018 (2000).
96 U.S. v. Patel, No. 09-cr-338 (D.D.C. June 2011).
97 United States v. Hoskins, 2018 WL 4038192 (2d Cir. Aug. 24, 2018).
98 15 U.S.C. §§78dd-2(g), 78dd-3(e), 78ff(c); 18 U.S.C. §3571.
99 15 U.S.C. §§78dd-2(g)(3), 78dd-3(e)(3), 78ff(c)(3) (2002).
100 15 U.S.C. §§78dd-2(g), 78dd-3(e), 78ff(c).
101 15 U.S.C. §§78u, 78u-3 (2010).
102 Kokesh v. SEC, No. 16-529, slip op. at 5 (U.S. June 5, 2017) (Sotomayor, J.)
104 15 U.S.C. §78m(b) (2006).
105 Id.; see SEC v. World-Wide Coin Invs., Ltd., 567 F. Supp. 724, 750 (N.D. Ga. 1983) ('Among the factors that determine the internal accounting control environment of a company are its organizational structure, including the competence of personnel, the degree and manner of delegation and responsibility, the quality of internal budgets and financial reports, and the checks and balances that separate incompatible activities.')
106 15 U.S.C. §78m(b).
107 15 U.S.C. §78m(b)(4)-(5); see e.g., SEC v. Kelly, 765 F. Supp. 2d 301, 322 (S.D.N.Y. 2011) ('SEC need not prove scienter to succeed on a claim [. . . liability] is predicated on reasonableness [. . .] of defendant's conduct [. . .]').
108 15 U.S.C. §78m(b)(6).
109 See, e.g., In the Matter of Watts Water Technologies, Inc. and Leesen Chang, SEC Administrative Proceeding File No. 3-148585 (13 October 2011).
110 See, e.g., United States v. Control Components Inc., No. 8:09-cr-00162 (C.D. Cal. 22 July 2009); United States v. SSI Int'l Far East Ltd., No. 3:06-cr-00398-KI (D. Or. 16 October 2011).
111 15 U.S.C. §78ff(a); 18 U.S.C. §3571.
112 18 U.S.C. §3282 (2003).
113 15 U.S.C. §78u.
114 See 26 U.S.C. §162(c)(1)(2006).
115 18 U.S.C. §1956(c)(7) (2012) (listing the predicate offences as 'specified unlawful activit[ies]').
116 See 18 U.S.C. §1956.
117 United States v. Quinones, 635 F.3d 590, 594 (2d Cir. 2011) (quoting United States v. Ferrarini, 219 F.3d 145, 154 (2d Cir. 2000) ('A conscious avoidance instruction permits a jury to find that a defendant had culpable knowledge of a fact when the evidence shows that the defendant intentionally avoided confirming the fact').
118 See e.g., United States v. Blair, 661 F.3d 755, 764 (4th Cir. 2011) ('Almost any exchange of money between two parties qualifies as a financial transaction subject to criminal prosecution under § 1956, provided that the transaction has at least a minimal effect on interstate commerce and satisfies at least one of the four intent requirements. . .').
120 18 U.S.C. §1956(c)(9) (2012).
121 See United States v. Akintonbi, 159 F.3d 401, 403 (9th Cir. 1998) (finding that checks with no value were proceeds under the statute).
122 See United States v. Santos, 553 U.S. 507, 515–516 (2008).
123 See e.g., United States v. Richardson, 658 F.3d 333, 340 (3d Cir. 2011).
124 See DOJ Press Release 18-980, Two Members of Billion-Dollar Venezuelan Money Laundering Scheme Arrested (25 July 2018), www.justice.gov/opa/pr/two-members-billion-dollar-venezuelan-money-laundering-scheme-arrested; Associated Press, Malaysia ex-PM's Wife Pleads Not Guilty to Money Laundering, (4 Oct. 2018), available at https://apnews.com/f769ed693a224cc6bd733673664af68c.
125 United States v. Lee, 558 F.3d 638, 642 (7th Cir. 2009) (payment of the advertising expenses of a prostitution enterprise promoted the underlying offence).
126 18 U.S.C. §1956(a)(2)(A); United States v. Moreland, 622 F.3d. 1147 (9th Cir. 2010).
127 See United States v. Heid, 651 F.3d 850, 855 (8th Cir. 2011).
128 See, e.g., United States v. Blankenship, 382 F.3d 1110, 1129-30 (11th Cir. 2004) (finding that a defendant's performance of the 'minimum number of transactions reasonably necessary' to spend money at issue and failure to use intermediate accounts or dissociate himself from the accounts in which money was deposited supported a finding that the defendant did not engage in money laundering).
129 United States v. Magluta, 418 F.3d 1166, 1176 (11th Cir. 2005).
130 18 U.S.C. §1956(a)(1-2); see also United States v. Bowman, 235 F.3d 1113, 1118 (8th Cir. 2000).
131 Bowman, 235 F.3d at 1118 (citing United States v. Young, 45 F.3d 1405, 1413 (10th Cir. 1995), cert. denied, 515 U.S. 1169 (1995)) (not reaching the structure of the transaction because the evidence indicated that offender was unaware of the requirement government alleged).
132 31 U.S.C. §5324(a)–(c).
133 See United States v. Bodmer, 342 F. Supp. 2d 176, 191-92 (S.D.N.Y. 2004) (finding that a foreign national defendant had conspired to violate the money laundering statue's international transfer of funds provision even where, under the pre-1998 version of the FCPA, he was not subject to criminal punishment under the FCPA).
134 See, e.g., United States v. Kozeny, 638 F. Supp. 2d 348 (S.D.N.Y. 2009) (finding testimony of two witnesses that defendant agreed with others that one of the uses of his investment would be bribing foreign government officials sufficient for a reasonable jury to find conspiracy to launder money under Section 1956(a)(2)).
135 See, e.g., United States v. Jean Rene Duperval, No. 1:09-cr-21010-JEM (S.D. Fl. 2009) (money laundering prosecution of former director of international relations for Haiti Telco).
136 18 U.S.C. §1956(a)(1)(2).
137 18 U.S.C. §1957(b)(1)(2) (2012).
138 18 U.S.C. §981(a)(1)(A) and (C).
139 See DOJ Press Release 16-839, United States Seeks to Recover More Than US$1 Billion Obtained from Corruption Involving Malaysian Sovereign Wealth Fund (20 July 2016), www.justice.gov/opa/pr/united-states-seeks-recover-more-1-billion-obtained-corruption-involving-malaysian-sovereign.
140 See DOJ Press Release 17-655, U.S. Seeks to Recover Approximately US$540 Million Obtained From Corruption Involving Malaysian Sovereign Wealth Fund (15 June 2017), www.justice.gov/opa/pr/us-seeks-recover-approximately-540-million-obtained-corruption-involving-malaysian-sovereign.
141 31 U.S.C. §5313.
142 31 U.S.C. §5331 (2011); 31 C.F.R. §§103.22, 103.30 (2011).
143 31 U.S.C. §5314 ; 31 C.F.R. §103.24.
144 31 U.S.C. §5318 (2011).
145 Ratzlaf v. United States, 510 U.S. 135, 137 (1994); see also United States v. Tatoyan, 474 F.3d 1174, 1177 (9th Cir. 2007).
146 31 U.S.C. §5322(a) (2001).
147 31 U.S.C. §5322(b).
148 Inter-American Convention Against Corruption, Article IX, 29 March 1996.
149 Deirdre Walsh, CNN exclusive: Obama signs STOCK Act to address 'defecit of trust' in Washington, CNN (4 April 2012), available at www.cnn.com/2012/04/04/politics/stock-act-signing/index.html.
150 The White House, Office of the Press Secretary, Remarks by the President in State of the Union Address (24 January 2012), available at www.whitehouse.gov/the-press-office/remarks-president-state-union-address.
151 Deidre Walsh and Dana Bash, 'Congress closes loophole in stock trading law after CNN report', (August 3, 2012), available at www.cnn.com/2012/08/02/politics/stock-act-loophole/index.html.
152 Upjohn Co. v. United States, 449 U.S. 383, 389 (1981).
153 Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat 1376 (2010).
154 Digital Realty Trust, Inc. v. Somers, 138 S. Ct. 767, 782 (2018).
155 U.S. Dep't of Justice, U.S.A.M., Criminal Resource Manual, §§9–28.300.
156 See DOJ Press Rel. 12-534, Former Morgan Stanley Managing Director Pleads Guilty for Role in Evading Internal Controls Required by FCPA (25 April 2012), www.justice.gov/opa/pr/2012/April/12-crm-534.html.288.
157 See SEC Press Rel. 2013-65, SEC Announces Non-Prosecution Agreement With Ralph Lauren Corporation Involving FCPA Misconduct (22 April 2013), www.sec.gov/News/PressRelease/Detail/PressRelease/1365171514780.
158 U.S. Dep't of Just., Criminal Division, Fraud Section, Evaluation of Corporate Compliance Programs (Feb. 8, 2017), www.justice.gov/criminal-fraud/page/file/937501/download.
160 Dep't of Justice, Criminal Division, Evaluation of Corporate Compliance Programs (Apr. 30, 2019), available at https://www.justice.gov/criminal-fraud/page/file/937501/download.
161 Id. at 1-2.
162 Keynote Address by Deputy Attorney General Rosenstein, Dep't of Justice, FCPA Enforcement Developments (Mar. 7, 2019), available at https://www.justice.gov/opa/speech/deputy-attorney-general-rod-j-rosenstein-delivers-keynote-address-fcpa-enforcement.
164 Press Release, Fed. Bureau of Investigations, FBI Announces New International Corruption Squad in Miami Field Office (Mar. 5, 2019), available at https://www.fbi.gov/news/pressrel/press-releases/fbi-announces-new-international-corruption-squad-in-miami-field-office.
165 Remarks by SEC Chairman Jay Clayton to the Economic Club of New York (Sept. 9, 2019), available at https://www.sec.gov/news/speech/speech-clayton-2019-09-09.
166 Dep't of Justice, Justice Manual, § 9-47.120 FCPA Corporate Enforcement Policy (updated Mar. 2019), available at https://www.justice.gov/jm/jm-9-47000-foreign-corrupt-practices-act-1977.
167 Remarks by Assistant Att'y Gen. Brian A. Benczkowski, Dep't of Justice, 33rd Annual ABA National Institute on White Collar Crime Conference (Mar. 8, 2019), available at https://www.justice.gov/opa/speech/assistant-attorney-general-brian-benczkowski-delivers-remarks-33rd-annual-aba-national.
168 Dep't of Justice, Justice Manual, § 9-47.120(3) FCPA Corporate Enforcement Policy (updated Mar. 2019), available at https://www.justice.gov/jm/jm-9-47000-foreign-corrupt-practices-act-1977.
169 Remarks by then-Deputy Attorney General Rod J. Rosenstein, Dep't of Justice, American Conference Institute's 35th International Conference on the Foreign Corrupt Practices Act (Nov. 29, 2018), available at https://www.justice.gov/opa/speech/deputy-attorney-general-rod-j-rosenstein-delivers-remarks-american-conference-institute-0.
170 Press Release, Sec. Exch. Comm'n, SEC Awards $4.5 Million to Whistleblower Whose Internal Reporting Led to Successful SEC Case and Related Action (May 24, 2019), available at https://www.sec.gov/news/press-release/2019-76; SEC Whistleblower Award Proceeding, Order Determining Whistleblower Award Claim, File No. 2019-6, available at https://www.sec.gov/rules/other/2019/34-85936.pdf.
171 Keynote Address by then-Deputy Attorney General Rosenstein on FCPA Enforcement Developments (Mar. 7, 2019), available at https://www.justice.gov/opa/speech/deputy-attorney-general-rod-j-rosenstein-delivers-keynote-address-fcpa-enforcement.