So your probably reading this Civil Investigative Demand about Foreign Corrupt Practices Act violations and your stomach is in knots. Maybe a competitor reported your overseas business practices. Maybe a whistleblower claimed you bribed foreign officials. Or maybe your just caught up in there latest international corruption sweep. Look, we get it. Your ABSOLUTELY TERRIFIED. And you should be! Because FCPA violations carry criminal fines up to $25 MILLION and executives face 5 YEARS in federal prison!
What Is the FCPA and Why Is It So Dangerous?
Let me explain the international nightmare your facing. The SEC and DOJ jointly enforce the FCPA, which means your getting attacked from two directions simultaneously! The FCPA prohibits bribing foreign officials, but its interpreted so broadly that normal international business becomes criminal!
Here’s what’s really scary – “foreign official” includes ANYONE working for state-owned enterprises! That businessman from China’s state oil company? Foreign official. The doctor at Brazil’s public hospital? Foreign official. Even employees of partially government-owned companies count! We’ve seen executives prosecuted for taking clients to lunch because the client worked for a company that was 20% government-owned!
The FCPA also has accounting provisions that criminalize poor recordkeeping. Didn’t properly document that business dinner in Dubai? Criminal violation! Mischaracterized a payment in your books? CRIMINAL VIOLATION! Your facing prison time for accounting errors that have nothing to do with actual bribery!
How Crushing Are FCPA Penalties?
Sit down and prepare yourself because these numbers will destroy your entire company. FCPA penalties are absolutely devastating:
Companies face criminal fines up to $2 million per violation PLUS disgorgement of ALL profits from the entire business relationship! Got a $100 million contract through supposed bribery? Disgorge the ENTIRE $100 million plus interest! Civil penalties add another $16,000 per violation. And “per violation” means each payment, each false entry, each email!
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(212) 300-5196But individuals? Your facing personal criminal fines up to $250,000 and 5 years in federal prison PER VIOLATION! Prison sentences average 30 months but we’ve seen executives get 10+ years when multiple counts stack up!
In 2019 alone, companies paid $2.6 BILLION in FCPA penalties! Ericsson paid $1.06 billion! Siemens paid $800 million! These aren’t slaps on the wrist – they’re company-destroying nuclear bombs!
What Triggers FCPA Investigations?
Your probably wondering “How did they find out about my international business?” Let me tell you the common triggers that destroy companies:
Todd Spodek
Lead Attorney & Founder
Featured on Netflix's "Inventing Anna," Todd Spodek brings decades of high-stakes criminal defense experience. His aggressive approach has secured dismissals and acquittals in cases others deemed unwinnable.
Your company just received a Civil Investigative Demand from the DOJ requiring you to produce ten years of financial records, communications, and contracts related to your operations in three African countries. The CID references specific payments your subsidiary made to a government procurement officer, and you have only 30 days to respond.
Can I push back on the scope of this CID or do I have to turn over everything they're asking for?
You absolutely can and should negotiate the scope of a Civil Investigative Demand — the FCPA's civil enforcement provisions under 15 U.S.C. § 78dd-2(d) allow recipients to petition the issuing court to modify or set aside a CID that is unreasonable, oppressive, or exceeds the DOJ's investigative authority. Your attorney can file a motion to quash or limit the demand, arguing that the ten-year lookback period or the breadth of requested documents is unduly burdensome. However, you must act quickly because failing to comply or respond within the deadline can result in a court enforcement action and potential contempt findings. While we negotiate the scope, we also need to immediately implement a litigation hold on all responsive documents because destroying or concealing records subject to a CID can trigger obstruction charges under 18 U.S.C. § 1519, which carries penalties far worse than the underlying FCPA exposure.
This is general information only. Contact us for advice specific to your situation.
Whistleblowers get massive rewards – up to 30% of penalties collected! That disgruntled employee who knows about your foreign dealings? They could make $10 million by reporting you! Competitors routinely report each other to eliminate competition in foreign markets.
Due diligence in M&A transactions exposes past violations. Buy a company with FCPA issues? Now YOUR liable! Routine audits uncover suspicious payments that trigger self-reporting obligations. Even random compliance reviews by your own company can force disclosure! We’ve seen companies destroy themselves by “doing the right thing” and self-reporting minor issues that exploded into criminal prosecutions!
