Foreign Corrupt Practices Act Fraud

The Foreign Corrupt Practices Act (FCPA) makes it illegal for U.S. companies and individuals to offer anything of value to foreign officials for the purpose of obtaining or retaining business. Persons that violate the FCPA’s anti-bribery provisions may face criminal penalties and imprisonment, as well as civil penalties.

The FCPA was enacted “for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Specifically, the anti-bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.”

Because the Securities and Exchange Commission (SEC) is the agency responsible for pursuing civil actions under the FCPA, the SEC’s whistleblower laws apply.

Although in recent years FCPA recoveries have been very large, including $1.6 billion paid by Siemens to resolve the charges with the SEC, U.S. Department of Justice, and Office of the Prosecutor General in Munich; $137 million paid by Alcatel-Lucent; $16.2 million paid by Aon; $10.29 million paid by Armor Holdings, a subsidiary of BAE Systems; and $77 million paid by Johnson & Johnson, to date there have been no reported whistleblower awards paid in connection with FCPA enforcement actions. Given that whistleblower claims take years to brew through the system, it is only a matter of time before an FCPA whistleblower award is a reality.

Nevertheless, insiders with knowledge of Foreign Corrupt Practices Act violations are essential to the enforcement of this Act, since FCPA frauds are so hard to detect. Whistleblowers who come forward with original information regarding violations of the FCPA are entitled to a 10% to 30% award if the government recovers more than $1 Million for FCPA violations.

For a free consultation about a potential Foreign Corrupt Practices Act violation case, financial fraud, or other potential whistleblower case, please call us or click here to submit your information.