The Justice Department announced the indictment in New York of Cary Yan, a Chinese entrepreneur, and Gina Zhou, his assistant, on FCPA and money laundering charges relating to a scheme to secure control of an atoll owned by the Republic of the Marshall Islands (RMI). Yan and Zhou paid bribes to elected officials in the RMI in exchange for passing specific legislation. Yan and Zhou...
In following the Justice Department and the Securities Exchange Commission FCPA enforcement actions, I am always reminded of the popular phrase — “reading the tea leaves.” (or “tasseography,” a fortune-telling method based on tea leave patterns in tea sediments). Despite a slow initial year in 2021, the Biden Administration’s stamp and push on FCPA enforcement is becoming clear. Keep in mind, DOJ and SEC officials have...
The broad and pervasive scope of Glencore’s bribery conduct is obvious. The scope of its misconduct reflects Glencore’s fatal culture and commitment to profits at any and all cost. Glencore’s board and senior executive team forgot the basic equation — ethical companies are more profitable in the long run. Instead, Glencore embraced immediate gratification, circumventing controls and adhering to a culture of lawlessness. Glencore’s bribery...
We have heard it over and over, again and again – third-parties pose significant risks of bribery for all global businesses. Almost every FCPA enforcement action includes some form of third-party misconduct. The current picture from the Stanford FCPA Resource confirms the story. A cottage industry of automated platforms, data analytics, due diligence and monitoring strategies have grown around third-party bribery risk. Companies have designed...
In a surprising (but fully warranted) twist, the Justice Department returned an indictment against a former employee of Telefonaktiebolaget LM Ericsson (“Ericsson”), a global telecommunications company, for his role in paying approximately $2.1 million in bribes to high-level government officials in the Republic of Djibouti. Afework “Affe” Bereket, 53, a dual citizen of Ethiopia and Sweden, was charged in a two-count indictment – Count 1...
Chief compliance officers are always hungry for benchmarking data, for comparisons and insights around how their respective compliance programs stack up against other companies, especially in the same industry. Compliance professionals, as a general rule, are collaborative and willing to share information with each other. CCOs are an optimistic lot and enjoy sharing best practices, ideas and insights in order to further the ethics and...
Webinar: Monitoring Your Third Parties — Digging into Distributor and Agent Risks December 15, 2020, 12 Noon EST Sign Up HERE Government enforcement actions against companies for anti-corruption, sanctions, money laundering and accounting misconduct often focus on third-party risks. And for good reason — government enforcement actions almost always cite third-party misconduct and complicity in illegal schemes to pay bribes, circumvent sanctions and launder money....
The Justice Department finally closed out its investigation of Goldman Sachs’ massive bribery scheme involving Malaysia’s 1MDB fund. The case is now the largest in US FCPA history (based on its payment to DOJ and related US agencies). Goldman Sachs entered into three-year deferred prosecution agreement (“DPA”) with the filing of a criminal information charging conspiracy to violate the anti-bribery provisions of the FCPA. At...
World Acceptance Corporation (“WAC”), a US-based consumer loan company, agreed to pay the SEC $21.7 million for FCPA violations in Mexico. WAC’s cited violations covered the full gamut of FCPA violations, including bribery payments to government officials in Mexico, failure to keep accurate books and records and inadequate internal accounting controls. In this Episode, Michael Volkov discusses the WAC SEC settlement.
In a two-part series, Michael Volkov examines the continuing problem of identifying and mitigating beneficial ownership risks. Money launderers and corrupt individuals continue to rely on corporate structures to disguise their ownership interests to further illicit schemes. Companies have to develop strategies that practically address the risks without dedicating disproportionate resources to the problem. In the first episode, Michael Volkov discusses beneficial ownership risks and...
