New Jersey Businessman Pleads Guilty to FCPA Violation
In 2020, the Justice Department brought criminal charges against 22 individuals in FCPA-related investigations. While this was a decline from the two preceding years, COVID-19 had a dramatic impact on criminal FCPA prosecutions.
In particular, DOJ faced challenges from unavailable grand juries to present evidence needed to bring criminal indictments, and numerous federal courthouses were either closed down or not conducting criminal trials for lengthy periods of time. Against these challenges, DOJ was still able to return indictments, negotiate plea agreements, and even arrange for remote guilty plea proceedings.
In an interesting case brought at the end of 2020, DOJ announced a criminal plea by a U.S. businessman from New Jersey for paying $100,000 in bribes to a Korean government official to obtain contracts with the Defense Acquisition Program Administration (DAPA), a state-owned agency in the Republic of Korean’s Ministry of National Defense.
Deck Won Kang (Kang) plead guilty to one count of violating the anti-bribery provisions of the FCPA. Kang owns two companies that provide goods and services to DAPA, including naval equipment and technology.
DAPA later brought a civil suit against Kang and his spouse for selling DAPA $75 million in faulty equipment and improperly using millions of government funds for personal spending and real estate ventures.
Between 2009 and 2013, Kang engaged in a bribery scheme to secure several contracts from DAPA. As part of his guilty plea, Kang admitted that he agreed to provide a high-ranking official in the South Korean Navy and DAPA procurement official with a bribe after the official retired from public office.
In exchange for the promise of a future bribe payment, the official provided Kang with several benefits, including: (1) non-public information relating to potential contracts of interest to Kang; (2) specific assistance and support to Kang to secure specific contracts; (3) use of the official’s internal influence with the Korean Navy and DAPA to ensure award of contracts to Kang’s companies.
According to the criminal information, DAPA launched an initiative in 2009 to update South Korea Navy’s fleet of ships and technology. DAPA solicited bids for contracts to supply advanced technology including sonar equipment and remote-controlled and operated vehicles.
Later in the conspiracy, and after the official’s retirement from the South Korean government, Kang made eight separate wire payments to the official over a one-year period, totaling $100,000.
Kang arranged the payments to be wired from his United States bank account to a bank account in Australia for the benefit of the government official.
The FCPA charge is punishable to a maximum potential penalty of five years in prison and a fine of the greater of $250,000, or twice the gross profits to Kang.
Kang is scheduled to be sentenced on April 21, 2021.