The Justice Department has been pushing its voluntary self-disclosure program and changes to its Corporate Enforcement Policy, in an attempt to increase FCPA enforcement cooperation.  The Golden Ring for every company facing this situation is a declination with disgorgement.  Only 17 companies have achieved that result.

The latest beneficiary is Corsa Coal Corporation (“Corsa”), which cooperated with the Justice Department and resulted in the successful prosecution of two of its former executives.  In  the end, Corsa earned a declination and was able to secure a significant reduction in disgorgement from roughly $31 million to $1.2 million, based on its inability to pay the larger amount.

From late 2016 to early 202, Corsa executives and agents paid illegal bribes to Egyptian government officials to retain lucrative contracts to supply coal to Al Nasr Company for Coke and Chemicals (“Al Nasr”), an Egyptian state-owned and controlled coke company. Corsa paid approximately $4.8 million to a third-party intermediary that Corsa’s employees knew would be used, in part, to pay bribes to Al Nasr government officials, including the Chairman of Al Nasr.  In exchange, Corsa secured approximately $143 million in coal contracts from Al Nasr and earned $32.7 million in profits.

In 2021, Frederick Cushmore, the former VP and head of International Sales at Corsa, pleaded guilty to FCPA conspiracy arising out of his sales activities with Al Nasr.

In 2022, Charles Hunter Hobson, the Vice President of Corsa,  was indicted for violating the FCPA, money laundering and participating in the Al Nasr bribery scheme. Hobson was responsible for the business relationship with Al Nasr.  Hobson served in a variety of positions at Corsa from 2013 to 2018. Cushmore appears to have cooperated in the case against Hobson.

Cushmore and the third-party agent used encrypted messaging service to arrange the bribery payments.  Cushmore also obtained early access to non-public information about competitive bids for contracts with Al Nasr.

The corrupt commission payments were transferred from a US bank account to a UAE bank account.  Hobson secretly took a portion of the commissions paid to the third-party sales intermediary.

Hobson’s criminal case is still pending.

Applying its Corporate Enforcement Policy, DOJ cited the following: (1) Cosa’s timely and voluntary self-disclosure of the misconduct; (2) Corsa’s full and proactive cooperation and its agreement to continue to cooperate; (3) the nature and seriousness of the offense; (4) Corsa’s timely and appropriate remediation, including terminating a sales representative who engaged in the scheme and substantially improving its compliance program and internal controls; and (5) Corsa’s agreement to disgorge its ill-gotten gains.

Under DOJ’s Inability to Pay Policy, Corsa’s earned profits equaled $32.7 million from the criminal bribery scheme.  Corsa met its burden to establish its inability to pay the full amount of disgorgement.  With the assistance of an independent forensic accounting expert, DOJ determined that payment of in excess of $1.2 million would “substantially threaten the continued viability” of Corsa.