White Collar Criminal Defense Group

Foreign Corrupt Practices Act In 2019

As we enter 2019, the government’s enforcement of the Foreign Corrupt Practices Act (“FCPA”) shows no signs of slowing down. The U.S. Department of Justice and U.S. Securities and Exchange Commission have joint responsibility to enforce the FCPA. DOJ’s FCPA enforcement is handled through the Criminal Division’s Fraud Section. The SEC’s Enforcement Division has a specialized unit focusing on FCPA enforcement. Helpful resources on this topic include the DOJ’s Corporate Enforcement Policy found here and the SEC’s Resource Guide found here.

FCPA enforcement can take a variety of forms.  As highlighted below, violations of the FCPA’s “books and records” provisions are often handled short of criminal charges, but FCPA bribery allegations are often handled via criminal charges. Here are a few of the governments resolutions in late 2018:

• On November 27, 2018, Alejandero Andrade Cedeno, a Florida resident and former national treasurer of Venezuela, was sentenced to 10 years in prison based on his role in a billion dollar currency exchange and money laundering scheme. Andrade admitted to receiving over $1 billion in bribes in exchange for using his position as national treasurer of Venezuela to conduct currency exchange transactions at favorable rates for the Venezuelan government. He received cash, private jets, yachts, cars, and homes from the alleged co-conspirators. He agreed, through the plea agreement, to a forfeiture of a money judgment of $1 billion and all assets tied to the scheme. The case is being prosecuted in the U.S. District Court for the Southern District of Florida.
• On October 30, 2018, Roger R. Boncy was charged in a superseding indictment for alleged participation in a scheme to bribe government officials in Haiti connected to a $84 million port development project and laundering of the associated funds. Boncy is a Spain resident with dual United States and Haiti citizenship. The indictment alleges that Bonci and an alleged co-conspirator, Joseph Baptiste, solicited bribes from undercover agents posing as potential investors in connection with the proposed port project. The undercover agents recorded a meeting at a Massachusetts hotel during which Boncy and Baptiste allegedly told agents they would funnel payments to Haitian officials through a non-profit entity controlled by Baptiste purporting to help impoverished residents of Haiti. The agents also intercepted telephone calls during which Boncy and Baptiste allegedly discussed bribing an aide to a Haitian official with a job on the port project in exchange for the aide’s help in obtaining authorization for the project. The case is being prosecuted in the U.S. District Court for the District of Massachusetts.
• On September 27, 2018, DOJ announced non-prosecution agreements between United States and Brazilian authorities and Petroleo Brasilerio S.A. – Petrobas (Petrobas), a Brazilian state-owned energy company related to alleged violations of the FCPA for alleged “facilitating payments” to Brazilian politicians and political parties. DOJ alleged that high ranking members of Petrobas, including members of its Executive Board and Board of Directors, facilitated hundreds of millions of dollars in bribes and then “cooked the books” to conceal the bribe payments. Through the non-prosecution agreement with the U.S., Petrobas agreed to pay a criminal penalty of $853.2 million, a 25% discount off the low end of the applicable sentencing guidelines fine range based on the company’s full cooperation and remediation.

With results such as these, the government undoubtedly views its return on investment of time and resources as positive. Knowledgeable and experienced counsel is critical in defending against such actions – not only for corporate entities, but for individuals as well.

The attorneys of Pietragallo’s White Collar Criminal Defense practice are experienced in every aspect of an investigation and white collar criminal case. We routinely conduct corporate investigations and develop strategies and solutions to avoid or minimize the risk of criminal charges. We monitor and shadow government investigations and defend against all types of grand jury investigations. We represent corporations, executives, and individuals before state and federal grand juries and a myriad of federal and state regulatory agencies. At all times, we focus on the collateral consequences of a criminal indictment or conviction: debarment, civil liability, exclusion or suspension from federal and state programs, and revocation of professional licenses. When necessary, we possess the experience to defend vigorously our clients at trial, sentencing and appeal. Our results are unparalleled.

If you need assistance, please do hesitate to contact a member of our Team or the author of this post, John Schwab. With over two decades of experience, Mr. Schwab is ready to assist you with your matter.

An Educational Institution’s Survival Guide For The Proposed Title IX Regulations

What Happened?

On November 16th, 2018, the Department of Education released its proposed revisions to the Title IX regulations, illustrating an overt emphasis on equal treatment of the complainant and respondent, and affirming Due Process rights for the respondent. The proposed changes suggest that, if the regulations are ratified in their current form, many educational institutions will need to revise their current Title IX policies and required procedures.

The Rundown

We address here some of the proposed changes that will substantively modify educational institutions’ Title IX obligations. Some proposed changes lessen the obligation on educational institutions, while other proposed changes significantly increase their Title IX obligations.The following guide consists of a list of some of the more significant changes in the proposed regulations. If enacted, educational institutions can use this guide to determine what, if any, changes will need to be made to bring their Title IX policies and procedures into compliance. We have rated each of the proposed changes below on a lesser obligation to greater obligation scale compared to the Obama Administration’s Title IX regulations.

• Notice to the Institution – sexual harassment is defined more narrowly and an institution’s obligation to respond to allegations of sexual harassment commences only once an institution has “actual knowledge” of alleged violations.   lesser obligation
• Required Response Limited to Campus-Sanctioned Programs or Activities – educational institutions only need to respond to complaints of misconduct that take place at a school “program or activity.”   lesser obligation
• Who is Required to Report Allegations of a Title IX Violation – only certain employees of the educational institution trigger the obligation for the educational institution to respond to an alleged Title IX violation.   lesser obligation
• Procedure Once an Institution Has Received Actual Knowledge – 

(i) Treat complainants and respondents equitably;   same obligation(ii) Evaluate all relevant evidence, including both inculpatory and exculpatory evidence;   greater obligation(iii) Ensure that coordinators, investigators, or decision-makers do not have conflicts of interest or bias against either the complainant or respondent;   greater obligation(iv) Rely on the presumption that the respondent is not responsible for the alleged conduct unless proved otherwise at the conclusion of the grievance process;   greater obligation(v) Complete the grievance process reasonably promptly;    lesser obligation(vi) Describe the range of possible sanctions and remedies;   same obligation(vii) Describe the standard of evidence to be used to determine responsibility;  same obligation(viii) Describe the procedures and bases for appeal; and   same obligation(ix) Describe the range of supportive measures available.   same obligation

• Ongoing Obligation to Provide Written Notice to Parties – institutions must provide written notice to the parties containing Title IX procedures and a detailed statement of the allegations. This obligation is ongoing, so if an institution learns of new information in the course of the investigation, the institution must provide written notice describing the new information to all interested parties.   greater obligation
• Live Hearings for Institutions of Higher Learning – a meaningful change to the regulation requires institutions of higher learning, namely colleges and universities receiving federal funding, to include a live hearing as part of the Title IX process.    greater obligation
• Investigative Report Requirement – at least ten days prior to a hearing, the institution needs to provide the parties with copies of an investigative report that details the relevant evidence.   greater obligation
• Standard of Evidence in Hearings – the institution may use either the preponderance of the evidence standard or the clear and convincing evidence standard.  The preponderance of the evidence standard, however, may only be used if the institution uses that standard for all conduct violations that carry the same maximum disciplinary sanction.    greater obligation
• Cross-Examination of the Complainant – most radically different from the current regulation is the proposed right for the respondent to cross-examine the complainant.  In line with the rationale of the current regulation, which is concerned with the complainant and the respondent confronting one another in a harassing, embarrassing, or volatile way, the proposed regulations contain procedural safeguards, such as only permitting a party’s advisor of choice to perform the cross-examination.  Of particular note, if a party or witness decides not to submit to cross-examination, the decision-maker may not rely on any statement of that witness in reaching an ultimate determination.   greater obligation
• Preservation of Records for up to Three (3) Years    greater obligation
• No More “Single-Investigator” Model – the decision-maker cannot be the same person as the Title IX Coordinator or the investigator, moving away from the current single-investigator model.   greater obligation
• Requirement of a Final Report – Perhaps most drastic for those who will serve as decision-makers, the regulation, if passed, requires the decision-maker to draft a final determination following the hearing, essentially rendering an opinion for the record.    greater obligation
• Penalty to Institutions for Lack of Compliance – under the proposed regulations, monetary fines are no longer a potential penalty for failing to comply with the regulations.  The potential penalty of the withdrawal of federal funding, however, remains.    lesser obligation
• The Religious Exemption – the proposed regulation clarifies that the religious exemption does not require an educational institution to elect the religious exemption before an investigation takes place in order to invoke the exemption.   lesser obligation

The Take Away – How We Can Help

There are several changes in the proposed regulations that, if instituted as written, would require modifications to many current Title IX policies.  We can help with not only the revision of these policies, but also with the training of Title IX personnel to ensure full compliance throughout the Title IX process.  Further, we have substantial experience conducting Title IX investigations and preparing written investigative reports.  

Given the potential requirements for a more formalized hearing structure, we can also provide guidance and advice to hearing panels and help formulate written determinations post-hearing.  Please let us know how we may otherwise assist you in ensuring compliance with the revised regulations should they ultimately become instituted.