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☆ Justice Department Faces Accusations It Outsourced a Corporate Investigation in Bribery Case
▼ + stars: | 2022-12-22 | by ( Dylan Tokar | ) www.wsj.com time to read: +7 min

PREVIEWThe case against Messrs. Coburn and Schwartz was presented as a model for the Justice Department’s approach to corporate crime when it was announced in 2019. The department’s investigation into Messrs. Coburn and Schwartz was prompted by one such tipoff. The Deutsche Bank ruling was heavily cited in the motions filed by Messrs. Coburn and Schwartz. Since Messrs. Coburn and Schwartz launched their legal challenge, the Justice Department has doubled down on its bid to recruit companies as corporate crime watchdogs. The judge earlier in December heard oral arguments by both sides related to the executives’ motions.

☆ Honeywell to Pay $203 Million in Settlements Over Brazil, Algeria Bribery
▼ + stars: | 2022-12-19 | by ( Dylan Tokar | ) www.wsj.com time to read: +3 min

Honeywell International Inc. will pay nearly $203 million to resolve investigations in the U.S. and Brazil into bribes paid to public officials in Algeria and at Brazil’s state-owned oil company, the company said Monday. The settlements involve UOP, a U.S. subsidiary of Honeywell that manufactures catalysts used to refine oil. Investigations found that UOP had conspired to pay bribes to a former high-level Petróleo Brasileiro SA official to obtain a $425 million oil refinery contract, authorities said. U.S. authorities accused UOP of violating the U.S. Foreign Corrupt Practices Act, and the settlements require Honeywell to make compliance overhauls and file periodic reports. To carry out the bribery scheme in Brazil, UOP retained a sales agent to funnel a $4 million bribe to the unnamed official at Petróleo Brasileiro, prosecutors said.

☆ Honeywell Strikes $203 Million Settlements Over Brazil, Algeria Bribery
▼ + stars: | 2022-12-19 | by ( Dylan Tokar | ) www.wsj.com time to read: +1 min

Honeywell International Inc. will pay nearly $203 million to resolve investigations in the U.S. and Brazil into bribes paid to public officials in Algeria and at Brazil’s state-owned oil company, the company said Monday. The settlements involve UOP, a U.S. subsidiary of Honeywell that manufactures catalysts used to refine oil. Investigations found that UOP had conspired to pay bribes to a former high-level Petróleo Brasileiro SA official to obtain a $425 million oil refinery contract, authorities said. The U.S. Securities and Exchange Commission also found that Honeywell’s Belgian subsidiary had paid bribes to Algerian officials to win business with Algerian state-owned oil company Sonatrach. U.S. authorities accused UOP of violating the U.S. Foreign Corrupt Practices Act, and the settlements require Honeywell to make compliance overhauls and file periodic reports.

☆ Treasury Proposal Lays Out Who Would Have Access to New Ownership Database
▼ + stars: | 2022-12-15 | by ( Dylan Tokar | ) www.wsj.com time to read: +3 min

The latest rule lays out who will be able to use the information and how they can access its contents. The Treasury in its proposal said it would keep tight controls on information in the nonpublic registry, limiting access mostly to U.S. law enforcement and regulators. Any department employee whose duties require it will be able to access the database, including for tax administration purposes, according to the proposal. Federal agencies engaged in national security, intelligence and law enforcement also will have direct access to the database. Foreign government representatives, including law enforcement agencies in other countries, will be able to request information from the database through U.S. counterparts, according to the proposal.

☆ Danske Bank to Pay $2 Billion to Resolve Estonia Money-Laundering Probes
▼ + stars: | 2022-12-13 | by ( Dylan Tokar | Richard Vanderford | ) www.wsj.com time to read: +4 min

Danske Bank A/S, Denmark’s largest bank, has agreed to pay about $2 billion to settle long-running probes into anti-money-laundering failures that led to hundreds of billions of dollars of suspicious transactions flowing largely unchecked through a former branch in Estonia. The bank admitted to defrauding other banks regarding its Estonia customers and its anti-money-laundering controls. The resolutions bring to an end U.S. and Danish investigations, although scrutiny of the bank’s anti-money-laundering controls will likely continue for years. “We offer our unreserved apology and take full responsibility for the unacceptable failures and misconduct of the past, which have no place at Danske Bank today,” Mr. The Estonia branch ultimately processed $160 billion through U.S. banks on behalf of its nonresident customers, U.S. prosecutors said.

☆ U.S. Sanctions China-Based Vessels Over Alleged Illegal Fishing Practices
▼ + stars: | 2022-12-09 | by ( Dylan Tokar | ) www.wsj.com time to read: +1 min

U.S. officials said they were imposing a swath of sanctions targeting corruption and human rights abuses, including on a network of China-based fishing vessels that they said were involved in alleged illegal fishing throughout the Pacific. Newsletter Sign-up WSJ | Risk and Compliance Journal Our Morning Risk Report features insights and news on governance, risk and compliance. PREVIEWThe sanctions targeting the alleged illegal fishing activity, announced Friday morning, cover two Chinese nationals, Li Zhenyu and Xinrong Zhuo, along with eight entities and more than 150 China-flagged fishing vessels. The action builds on a memo issued by President Biden in June directing U.S. government agencies to take steps to address problems posed by harmful fishing practices. Write to Dylan Tokar at dylan.tokar@wsj.comCopyright ©2022 Dow Jones & Company, Inc. All Rights Reserved.

☆ ABB’s $327 Million Bribery Settlement Arrives in U.S. Court
▼ + stars: | 2022-12-02 | by ( Dylan Tokar | ) www.wsj.com time to read: +5 min

The U.S. court hearing was part of a globally coordinated deal that extends to authorities in South Africa, Switzerland and Germany, with the apparent bulk of the fines being collected in South Africa. The settlement is the first that U.S. authorities have reached in coordination with authorities in that country. The Kusile Power Station, a coal-fired power plant in South Africa. Switzerland on Friday said it was issuing a fine of 4 million Swiss francs, equivalent to about $4.3 million dollars. The Justice Department said it anticipated a related settlement with German authorities, but didn’t indicate a time frame.

☆ More Cases, Policy Changes Are on the Horizon, DOJ’s New Fraud Section Chief Says
▼ + stars: | 2022-11-30 | by ( Dylan Tokar | ) www.wsj.com time to read: +4 min

The fraud section has at least two bribery-related settlements with corporations that it plans to finalize in the coming weeks, Mr. Leon said. Justice Department settlements typically require companies to undertake compliance reforms over a set period of time. A company’s chief executive and chief compliance officer will be required to sign at the end of that period the certification document, stating that the company’s compliance program is “reasonably designed to prevent and detect” future violations. A veteran of the fraud section, Mr. Leon previously served as a supervisor in its securities fraud unit beginning in 2011 and then briefly as its deputy chief before departing in early 2014. More policy changes are on the horizon, Mr. Leon said, including an update to the fraud section’s FCPA corporate enforcement policy.

“In terms of thinking about what the mid- and long-term goals should be…the task force has been focused on facilitation networks, procurement networks, money-laundering networks,” he said. Newsletter Sign-up WSJ | Risk and Compliance Journal Our Morning Risk Report features insights and news on governance, risk and compliance. Mr. Bonham-Carter worked primarily as a property manager for the Russian oligarch, according to the indictment. Bonham-Carter is a U.K. citizen, living in the U.K., arrested in the U.K.,” Mr. Adams said. In some cases, OFAC may not add companies that prosecutors deem are subject to the control of sanctioned oligarchs, he said.

☆ ABB Nears Deal to Resolve Third U.S. Bribery Case Against Company
▼ + stars: | 2022-11-25 | by ( Dylan Tokar | ) www.wsj.com time to read: +7 min

Photo: Waldo Swiegers/Bloomberg NewsIn the U.S., the ABB deal is an early test of a pledge by the Biden administration to take a tougher stance on corporate repeat offenders. An ABB spokesman said the company continues to fully cooperate with authorities and hopes to reach a final settlement soon. Exactly how U.S. authorities, including the Justice Department, will frame the ABB deal in relation to the new stance on repeat offenders remains to be seen. Allowing the ABB parent company to avoid a guilty plea will in theory help shield much of its business globally from those risks. The ABB deal would also mark the second time the Swiss company has settled FCPA offenses with a deferred-prosecution agreement.

☆ Russia Sanctions Disrupting Putin’s Military Efforts, Treasury Official Says
▼ + stars: | 2022-11-16 | by ( Dylan Tokar | ) www.wsj.com time to read: +3 min

Sanctions on Russia have succeeded in disrupting the country’s military manufacturing industry and are squeezing its economy, a senior U.S. Treasury Department official said. Newsletter Sign-up WSJ | Risk and Compliance Journal Our Morning Risk Report features insights and news on governance, risk and compliance. “We’ve seen how fragile the supply chain is, frankly—we learned this during Covid—for his defensive efforts on the battlefield,” Mr. Nelson said, referring to Mr. Putin. Amid the unprecedented sanctions program against Russia and ongoing pressure campaigns against Iran, Venezuela and other nations, the Treasury has been reviewing more broadly how it uses sanctions. One measure the U.S. Treasury is taking to ensure its program remains potent is by hiring a chief sanctions economist to provide economic analysis around prospective sanctions actions, Mr. Nelson said.

☆ Small Business Group Challenges Law Requiring Corporate-Ownership Disclosure
▼ + stars: | 2022-11-15 | by ( Dylan Tokar | ) www.wsj.com time to read: +3 min

A small business group is suing to block a law that was designed to stop money-laundering by rooting out the use of anonymous shell companies. The Corporate Transparency Act, the law’s formal name, was passed as part of annual defense spending legislation and signed into law last year. The group filed its lawsuit with Isaac Winkles of Huntsville, Ala., who owns a small business managing real-estate properties. The lawsuit poses a new challenge to FinCEN, which has already missed the mandated timeline for launching the corporate-ownership database. In addition to setting up the corporate-transparency database, the law also requires FinCEN to take a number of other steps—a whistleblower award program, among others—to strengthen the U.S.’s anti-money-laundering safeguards.

☆ Insurance Broker Arthur J. Gallagher Subpoenaed by Justice Department’s Foreign Bribery Unit
▼ + stars: | 2022-11-04 | by ( Dylan Tokar | ) www.wsj.com time to read: +3 min

Arthur J. Gallagher & Co. said it received a subpoena from the Justice Department’s foreign bribery unit, making it the latest company to become ensnared in a sprawling investigation into corruption at state-owned companies in Ecuador. The information request, which the company said it received in its third quarter, was from the Justice Department’s Foreign Corrupt Practices Act unit, Arthur J. Gallagher said. Prosecutors from that unit have asked Arthur J. Gallagher for information related to its insurance business with public entities in Ecuador, the company said in its Nov. 2 report. The law is enforced by the Justice Department and the U.S. Securities and Exchange Commission. A spokesperson for Arthur J. Gallagher didn’t immediately respond to a request for comment.

☆ Leidos Discloses Subpoenas Amid Antitrust, Bribery Probes
▼ + stars: | 2022-11-01 | by ( Dylan Tokar | ) www.wsj.com time to read: +2 min

Leidos Holdings Inc., an information-technology and engineering services firm, received dual subpoenas in recent months in connection with criminal investigations into potential foreign bribery and antitrust violations. The Reston, Va.-based company was served with a grand jury subpoena in August related to an investigation by the Justice Department’s antitrust division, Leidos said Tuesday. The probe is the second ongoing criminal investigation disclosed by Leidos this year. The FCPA probe was first disclosed by the company in a securities filing earlier this year. At the time, Leidos said it was conducting an internal investigation into activities within its international operations that it discovered in late 2021.

☆ Medical Company Seeks $50 Million From Glencore Over Congolese Bribe
▼ + stars: | 2022-10-26 | by ( Dylan Tokar | ) www.wsj.com time to read: +2 min

A company founded by a South African husband and wife to provide medical care for Congolese miners asked a federal judge in Manhattan for $50 million in restitution for the harm it said it suffered from a bribery scheme involving Glencore PLC. Glencore, an Anglo-Swiss commodities company, in May agreed to pay about $1.2 billion to resolve long-running investigations by U.S., U.K. and Brazilian authorities into bribery and market-manipulation misconduct. Newsletter Sign-up WSJ | Risk and Compliance Journal Our Morning Risk Report features insights and news on governance, risk and compliance. After a dispute over the appointment of a manager to oversee those contracts, Kamoto terminated the agreements, according to Crusader Health. The bribe, which was described in settlement documents between Glencore and the U.S. government, ultimately forced Crusader Health to shut down, the company said.

Justice Department officials promised last week to pay more attention to victims when negotiating criminal settlements, but the policy might have come too late to limit the damage caused by how the government resolved a case against Boeing Co. last year. The department said on Friday it would expand support for people who were harmed by a crime but who didn’t meet the legal definition of victims. On the same day, a federal judge in Texas ruled that prosecutors violated the rights of those killed in two Boeing 737 MAX crashes when the government had settled with the company before briefing their families.

☆ JPMorgan Strikes Deal to End Former Compliance Employee’s Retaliation Lawsuit
▼ + stars: | 2022-10-25 | by ( Dylan Tokar | ) www.wsj.com time to read: +2 min

A former compliance employee for JPMorgan Chase Bank NA has agreed to drop a retaliation lawsuit against the bank. Shaquala Williams, a former JPMorgan vice president, had sued her former employer last year, alleging the bank fired her for raising concerns about its compliance program. The agreement with Ms. Williams allows JPMorgan to avoid a trial, which would likely have involved further airing of the bank’s internal compliance matters. A lawyer for Ms. Williams didn’t immediately return a request for comment. In her lawsuit, Ms. Williams said she was fired after raising concerns about insufficient sanctions screening and anticorruption practices.

☆ Democratic Lawmakers Ask Justice Department to Publish Data on Corporate Crime
▼ + stars: | 2022-10-20 | by ( Dylan Tokar | ) www.wsj.com time to read: +2 min

A trio of Democratic lawmakers is asking the U.S. Justice Department to publicly disclose data related to its prosecution of corporate crime. ), comes after a top Justice Department official said data showed a decline in corporate criminal prosecutions. “We need to do more and move faster.”Sen. Durbin serves as chair of the Senate Judiciary Committee, which plays an oversight role over the Justice Department. The federal government hasn’t published a comprehensive report on corporate crime trends since 1979, the Democratic lawmakers said Thursday. A Justice Department report titled “Illegal Corporate Behavior” recommended that the agency start publicizing enforcement data through the Bureau of Justice Statistics.

☆ Russian Oligarch’s Property Manager Charged With Helping Evade Sanctions
▼ + stars: | 2022-10-11 | by ( Dylan Tokar | ) www.wsj.com time to read: +2 min

Graham Bonham-Carter was indicted by a grand jury in the Southern District of New York on sanctions evasion conspiracy and wire fraud charges. Newsletter Sign-up WSJ | Risk and Compliance Journal Our Morning Risk Report features insights and news on governance, risk and compliance. PREVIEW Mr. Bonham-Carter, 62 years old, worked primarily as a property manager for Mr. Deripaska, according to the recent indictment. Mr. Bonham-Carter also attempted to illegally transfer artwork purchased by Mr. Deripaska from a New York auction house to London, they said. Mr. Bonham-Carter couldn’t immediately be reached for comment.

☆ Justice Department Money-Laundering Team Names Leaders as Ukraine War Raises Its Profile
▼ + stars: | 2022-10-11 | by ( Dylan Tokar | ) www.wsj.com time to read: +4 min

The Justice Department on Tuesday named two veteran prosecutors to lead its money-laundering and asset-recovery section. Brent Wible, a veteran federal prosecutor whose latest stint at the Justice Department began in May 2020, has been appointed the section’s new chief, a Justice Department spokesman said. The Justice Department earlier this year announced the formation of an interagency task force dedicated to enforcing sanctions and other economic countermeasures imposed on Russia, dubbed Task Force KleptoCapture. The money-laundering section’s international unit has worked closely with the task force, officials say. Justice Department leaders have said the agency intends to pay closer attention to victims’ rights when resolving cases of corporate crime.

☆ Treasury Lays Groundwork for Ownership Registry, but Questions Remain
▼ + stars: | 2022-10-07 | by ( Dylan Tokar | ) www.wsj.com time to read: +5 min

Providing ExemptionsAnother key issue addressed by FinCEN’s rule relates to which companies will have to submit beneficial ownership information. Lawmakers reasoned that ownership information for such companies already would be readily available, but the large carve-outs have sparked questions from some quarters. They will be given 30 days to report beneficial ownership information. The road aheadFinCEN’s work establishing the beneficial ownership database is far from done. The beneficial ownership law requires companies to certify their reports are accurate and imposes penalties for people who willfully provide false information.

SEC Climate Rule Won’t Demand Extensive Reporting From Small Businesses, Gensler Says Public companies wouldn’t be required to ask small private suppliers to report on their carbon footprints, the SEC chairman said, responding to concerns about compliance costs. The Morning Risk Report The Justice Department targets executive pay, probationary deals to curb corporate crime, and Biden orders deeper scrutiny of foreign investment in tech and supply chains. Also, SEC climate rule won’t demand extensive reporting from small businesses, Gensler says. Cryptocurrency Exchange Gemini Names Insider as Compliance Chief Christopher Mariadason’s promotion is the latest change in the company’s risk and compliance team in recent months. U.S. Banking Regulator Appoints New Climate Risk Chief Nina Chen, trained as a chemical engineer, joins the Office of the Comptroller of the Currency after leading the newly-created climate division at New York’s financial regulator.

☆ Gol Airline Will Pay $41.5 Million to Settle Bribery Charges With U.S., Brazilian Authorities
▼ + stars: | 2022-09-16 | by ( Dylan Tokar | ) www.wsj.com time to read: +2 min

One of Brazil’s largest airlines admitted to violating antibribery laws and agreed to pay $41.5 million in penalties over a decade-old scheme to influence lawmakers in Brazil. The São Paulo-based airline also was fined by Brazilian authorities for the same conduct, the U.S. agencies said. Federal prosecutors imposed a $15.3 million fine, while regulators at the SEC levied $22.8 million in penalties. Gol has also agreed to pay another $3.4 million in penalties in Brazil, according to U.S. authorities. Newsletter Sign-up WSJ | Risk and Compliance Journal Our Morning Risk Report features insights and news on governance, risk and compliance.

☆ Justice Department Targets Executive Pay, Probationary Deals to Curb Corporate Crime
▼ + stars: | 2022-09-15 | by ( Dylan Tokar | Dave Michaels | ) www.wsj.com time to read: +5 min

Newsletter Sign-up WSJ | Risk and Compliance Journal Our Morning Risk Report features insights and news on governance, risk and compliance. “What you’re seeing here is an approach that is focused on both individual accountability and corporate responsibility,” she said. The policy changes are likely to face some pushback from companies and lawyers, and could be rolled back by future administrations. It also targets corporate policies concerning executive compensation, pushing companies to design clawback policies that would apply in cases where an executive is involved in wrongdoing. Companies that do so may be eligible for probationary deals and can avoid additional oversight measures that prosecutors sometimes impose after a settlement is struck.

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