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DOJ Is Aggressively Enforcing Foreign Corrupt Practices Act

 

Ronald A. Sarachan and Lisa M. Cuifolo

 

Originally published by Ballard Spahr Andrews & Ingersoll, LLP, 11 June 2008.

 
 
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Ballard Spahr Andrews & Ingersoll, LLP24 June 2008. Enforcement of the Foreign Corrupt Practices Act (FCPA) is increasing dramatically. Recent Department of Justice (DOJ) actions demonstrate that it is imperative that companies maintain robust compliance programs or risk criminal exposure and substantial penalties.

Faro Technologies Inc. has settled FCPA charges with the DOJ for a penalty of $1.1 million. As part of its settlement, Faro entered a two-year non-prosecution agreement that includes the appointment of an independent compliance monitor. Faro expects monitoring costs to run $1 million to $2 million. In a related SEC enforcement action, Faro agreed to pay approximately $1.85 million in disgorgement and prejudgment interest.

Faro is a public company, based in Florida, that specializes in computerized measurement devices and software. The settlement stems from charges that its employees authorized improper payments to employees of state-owned or state-controlled entities in China and to Chinese officials to secure business. According to the government, Faro secured contracts worth approximately $4.9 million as a result of the improper payments.

The government specifically highlighted in its statement of facts that Faro failed to devise and maintain a system of internal controls to ensure compliance with the FCPA. In particular, Faro did not address the FCPA or the topic of foreign bribery in its code of conduct; offered no FCPA training of any kind to its employees, including salespeople and managers in China and other countries where there is an increased risk of improper payments; and had no in-house counsel responsible for monitoring FCPA compliance.

For more information regarding this topic, please contact Ronald A. Sarachan, Partner-in-Charge of the White Collar Litigation Group.
 

 
 

Copyright 2008 by Ballard Spahr Andrews & Ingersoll, LLP. all rights reserved.

Ronald A. Sarachan, a partner in the Litigation Department, is partner-in-charge of the White Collar Litigation Group in Ballard Spahr Andrews & Ingersoll, LLP. He is also a member of the Environmental Group, Health Care Group, Corporate Compliance and Investigations Group and the Climate Change Group.

Lisa M. Cuifolo is an associate in the Litigation Department and a member of the White Collar Litigation Group in Ballard Spahr Andrews & Ingersoll, LLP.

 
 

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Created: 24 June 2008
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