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Foreign Corrupt Practices Act Enforcement Actions Down, Prosecutions of Individuals Up

recent article in Corporate Counsel noted a somewhat strange trend in federal enforcement of the Foreign Corrupt Practices Act, the primary federal law used to prohibit payment of bribes to foreign government officials. The article notes that 2013 has started off as a very slow year for FCPA enforcement actions, with either one or zero initiated in the first three months of the year, whereas in 2012 the government initiated a total of 39 FCPA investigations. At the same time, however, the government currently has an unusually large number of FCPA investigations ongoing, and criminal FCPA prosecutions of individuals have become more commonplace. These signs paint a somewhat confused picture and it will be some time before any long-term trends are clear.

Two factors identified in the article—the recent tendency for companies to quickly publicly disclose FCPA investigations and the desire of the Department of Justice to close out old investigations that have gone nowhere—may have contributed to the lower number of new FCPA investigations. In contrast, prosecutions of individuals for FCPA violations have been on the upswing. In the first three months of the year, eight individuals were sentenced for FCPA violations in four different cases.

Yet, despite the high number of sentences imposed, the sentences those individuals received no additional prison time beyond that already served. The article’s authors point out that prosecutors have not had the easiest time getting the FCPA convictions and sentences they would like. While this can hardly be taken as a sign that an FCPA prosecution is not a serious charge, it does suggest that skilled defense counsel has significant strategic opportunities in FCPA cases to get obtain highly favorable results for their clients. The authors also note recent cases from New York that show significant uncertainty about the types of proof federal prosecutors must produce to provide federal courts with jurisdiction to hear FCPA cases. Such determinations are very fact intensive and it is thus essential that defense counsel have the resources to fully evaluate the facts and determine how strong the government’s case actually is.

When an individual faces prosecution under the criminal provisions of the Foreign Corrupt Practices Act, defense counsel has a number of avenues to challenge the government’s case. In the recent New York cases, a number of issues were hotly disputed. The most fundamental issue in any prosecution, personal jurisdiction, determines whether a court even has the power to hear the case. Where a defendant is a foreign national and his or her acts occurred outside the U.S., personal jurisdiction can become a real issue and potentially prevent prosecution altogether.

Foreign Corrupt Practices Act prosecutions typically involve mountains of complex evidence and effective defense of these cases requires extensive experience in federal criminal defense, especially white-collar and international criminal matters. For nearly twenty years, our federal defense attorneys have had extraordinary success for clients accused of crimes in federal courts across the U.S. If you are facing investigation or criminal charges for an alleged FCPA violation, we are ready to use our experience and expertise to protect your rights and help you obtain the best possible outcome.