DOJ Fraud Section 2021 review: FCPA resolutions down

The Fraud Section charged 333 individuals last year and obtained 329 convictions, an uptick from 326 and 213, respectively, in 2020.

FCPA cases: Three companies entered resolutions with the Justice Department for violations of the Foreign Corrupt Practices Act (FCPA) in 2021, compared to eight the previous year. Last year’s cases included the following:

• An $85 million criminal penalty levied in January against Deutsche Bank for concealing more than $7 million in corrupt payments and bribes to third-party intermediaries and falsely recording them in the bank’s books and records.
• An $18.4 million criminal penalty in June against Amec Foster Wheeler, a subsidiary of Scotland-based global engineering company John Wood Group, for its role in a scheme to pay bribes to officials in Brazil in exchange for an approximately $190 million oil and gas engineering and design contract from Brazilian state-owned oil company Petrobras.
• A $247.6 million criminal penalty in October against Credit Suisse Group concerning a loan corruption scheme. In total, Credit Suisse paid approximately $475 million in global penalties, fines, and disgorgement.

FCPA corporate resolutions resulted in the imposition of a global monetary amount of $649 million; a U.S. monetary amount of $422.8 million; and $262.6 million in realized criminal penalties, according to the report.

The FCPA Unit charged 26 individuals and obtained 19 convictions, including those related to Braskem, Odebrecht, and Petrobras.

MIMF cases: Six corporate resolutions reached in 2021 were brought by the Market Integrity and Major Frauds Unit (MIMF), including a joint corporate resolution with the FCPA Unit. The MIMF Unit focuses on prosecutions related to complex and sophisticated securities, commodities, corporate, investment, and cryptocurrency-related fraud cases.

One significant resolution in 2021 involved NatWest Markets, a U.K.-based global banking and financial services firm. In December, NatWest pleaded guilty to wire fraud and securities fraud charges for engaging in various fraud schemes in the markets for U.S. Treasury securities and futures contracts. As part of the plea terms, NatWest agreed to pay approximately $35 million in a criminal fine, restitution, and forfeiture; serve three years of probation; and agreed to the imposition of an independent compliance monitor.

In another significant resolution under the MIMF Unit, Boeing in January agreed to pay more than $2.5 billion, including a $243.6 million criminal penalty, as part of a three-year deferred prosecution agreement to resolve a criminal charge related to the commercial aerospace manufacturer’s 737 MAX scandal. Boeing was accused of conspiring to defraud the Federal Aviation Administration’s Aircraft Evaluation Group during evaluation of the aircraft.

The MIMF Unit convicted “a record number of individual defendants,” the report stated. In total, 105 individuals faced charges and 105 convictions were obtained, including both guilty pleas and trials.

Healthcare fraud cases: In September 2021, in collaboration with numerous other federal and state partners nationwide, the Health Care Fraud Unit announced criminal charges against 138 defendants for their alleged participation in various healthcare fraud and illegal opioid distribution schemes that resulted in a combined total of approximately $1.4 billion in alleged losses.

According to the report, these charges targeted approximately $1.1 billion in alleged fraud committed using telemedicine, $29 million in Covid-19 fraud, $133 million linked to substance abuse treatment facilities, and $160 million connected to other healthcare fraud and illegal opioid distribution schemes across the country.