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This Week in Compliance: DOJ Expands Efforts to Hold Executives Accountable in Corporate Criminal Probes

By GAN Integrity


  • U.S. DOJ expands efforts to hold executives accountable in corporate criminal probes: In a speech this week given at a conference on Thursday, Deputy Attorney General Rod Rosenstein announced that under a revised policy “pursuing individuals responsible for wrongdoing will be a top priority in every corporate investigation”. Rosenstein described the policy changes as an expansion of the Obama-era mandate to hold individuals accountable in corporate crime probes. Specifically, Rosenstein said that corporate settlements will no longer shield individuals from liability. The announcement is the result of a year-long review of the so-called Yates memo, which was aimed at resolving corporate investigations more quickly. As part of the revised policy, companies will no longer have to identify any wrongdoer to qualify for leniency. Rather, companies will have to identify senior wrongdoers. Companies that hide information about wrongdoing will not be able to qualify for leniency.
  • Deutsche Bank raided in connection with money-laundering investigation: German police raided the offices of Deutsche Bank in Frankfurt in connection with a money-laundering investigation this Thursday. Approximately 170 police officers, prosecutors, and tax inspectors searched six different Deutsche Bank offices in the wider Frankfurt area. The public prosecutor’s office indicated that the investigation relates to the activities of two Deutsche Bank employees that facilitated the establishment of offshore companies for the purpose of money-laundering. The bank said it is “anxious to clarify all suspicions” and would closely cooperate closely with prosecutors. The investigation was triggered by materials included in the Panama Papers leak back in 2016. The Panama Papers are a large set of documents leaked from Panamanian law firm Mossack Fonseca which revealed how billions of dollars were sheltered from tax authorities in locations including the British Virgin Islands.
  • Russian telecommunications company MTS reserves USD 940 million for FCPA resolution: MTS, Russia’s largest mobile phone company, said this week that it has reserved USD 840 million to resolve a possible enforcement action by the DOJ and SECpertaining to FCPA offenses. However, the company indicated there is no certainty yet about the form, timing, or terms of a resolution. The company said it is cooperating with a probe led by U.S. authorities into the company’s former operations in Uzbekistan which it shut down in 2016. Sweden’s Telia paid USD 965 million in penalties last year to resolve FCPA offenses in Uzbekistan. Netherlands-based VimpelCom paid USD 795 to resolve FCPA charges in 2016. Both Telia and VimpelCom admitted to bribing Gulnara Karimova, daughter of late Uzbek president Islam Karimov.
  • Four additional convictions in Bertling bribery case: Three former senior executives at FH Bertling Group and an employee at ConocoPhillips were convicted Tuesday for their roles in a bribery plot. The convictions relate to the “Jasmine” North Sea oil project.Executives at Bertling paid approximately USD 445,000 to win a freight forwarding contract worth USD 20 million with ConocoPhillips. Bertling’s former CFO Stephen Emler was among those to plead guilty over the bribery charges. Colin Bagwell, former managing director and chief commercial officer at Bertling, and Christopher Lane, former logistics lead at ConocoPhillips, were also found guilty in the scheme. SFO Director Lisa Osofsky said that: “These senior executives failed to show any integrity, resorting to bribery to secure lucrative contracts and hide their illicit activities. It is our mission to bring criminals like these to justice.” In September 2017, three former senior employees at Bertling pleaded guilty in a separate bribery case involving illicit payments to an agent of Sonangol, Angola’s state oil company.
  • Uber fined a combined EUR 1 million in the UK and the Netherlands: Britain’s Information Commissioner’s Office (ICO) slapped ride-hailing company Uber with a GBP 385,000 fine for showing “complete disregard” for its customers and drivers after a data breach affecting 57 million Uber users worldwide in 2016. The Dutch data protection authority separately fined Uber EUR 600,000 for the same conduct. The ICO said that “avoidable data security flaws” allowed the hackers to easily access customers’ personal data. Since the data breach pre-dated the entry into force of the GDPR earlier this year, the fine levels are much lower than what would have been possible under the new regime.


  • Poland detains former head of financial regulator over corruption chargesMarek Chrzanowski, former head of Poland’s financial regulator known as KNF, was detained by Poland’s anti-corruption agency CBA this week. Chrzanowski resigned as chairman earlier this month after businessman Leszek Czarnecki accused him of suggesting he could get “favorable treatment” by picking a specific lawyer and paying him millions of dollars. Chrzanowski has denied all wrongdoing.
  • Former Venezuela treasurer jailed for ten years in U.S. over USD 1 billion in money-laundering: Alejandro Andrade, Venezuela’s national treasurer between 2007 and 2010, pleaded guilty last December to a money-laundering conspiracy. It was revealed this week that he received the maximum sentence possible, 10 years of imprisonment, for his role in the theft of USD 1 billion from the country’s coffers. As part of his sentence, Andrade also forfeited USD 1 billion in assets which included, horses, aircraft, and real estate. The guilty plea was unsealed last week after Raul Gorrin, a Venezuelan billionaire who owns the Globovision news network, was indicted for bribing officials in Venezuela’s National Treasury to help him evade currency controls and embezzle state funds.

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