The French Connection

Posted On Tuesday, September 25, 2018
By: Marc Stephen Raspanti

What Happened?

France and the United States worked together, for the first time, in a foreign bribery case in order to expand the reach of violations of the Foreign Corrupt Practices Act.

The Rundown

On June 4, 2018, the Department of Justice announced that Société Générale S.A., the Paris based global financial services institution, agreed to pay a hefty $585 million to resolve criminal charges with the United States and France for its participation in bribery schemes with Libyan state owned financial institutions. From 2004 to 2009, Société Générale paid $90 million in bribes to a Libyan intermediary who, in turn, paid high ranking Libyan officials a percentage from this bribe in order to secure investments from Libyan state institutions. Société Générale derived state contracts worth $3.66 billion and profits of $523 million from the Libyan bribery scheme. 

Through America and France’s combined investigative effort to prosecute all those involved in the aforementioned scheme, the DOJ announced a $64.2 million settlement from Legg Mason Inc., the Maryland based investment management firm, on the same day. From 2004 to 2010, Permal Group Ltd., Legg Mason’s subsidiary, managed the funds the Libyan state institutions invested in Société Générale as a result of the bribery scheme. Through Permal, Legg Mason managed seven of these investments and earned $31.6 million.

In continuation of the giant crackdown on FCPA violators, the Securities and Exchange Commission announced that Sanofi, the Paris based pharmaceutical company, agreed to pay more than $25 million to resolve charges that its subsidiaries in Kazakhstan and the Middle East participated in bribery schemes in order to secure business on September 4, 2018. In Kazakhstan, officials were paid bribes to guarantee that Sanofi was awarded bids at public institutions. In the Middle East, pay-to-prescribe schemes were aimed at healthcare providers to increase Sanofi prescriptions.

For the Record

“For years, Société Générale undermined the integrity of global markets and foreign institutions by issuing false financial data and by fraudulently securing contracts through bribery,” said Acting Assistant Attorney General Cronan. “Today’s resolution – which marks the first coordinated resolution with France in a foreign bribery case – sends a strong message that transnational corruption and manipulation of our markets will be met with a global and coordinated law enforcement response.”

The Take Away

2018 continues to be a robust year of enforcement with the international FCPA. While only time will tell if this momentum continues, the DOJ’s multi-million dollar settlements against Société Générale, Legg Mason Inc., and Sanofi seem to signify that it will.

Shkreli Co-Conspirator Gets 18 Months’ Imprisonment

Posted On Thursday, August 23, 2018

What Happened?

On August 17, 2018, former Katten Muchin Rosenman LLP attorney, Evan Greebel, was sentenced to 18 months’ imprisonment for his role in aiding former pharmaceutical executive, Martin Shkreli, in defrauding Retrophin, Inc.  Greebel was found guilty by jury for conspiring to commit wire fraud and securities fraud.

The Rundown

Greebel faced an advisory range under the U.S. Sentencing Guidelines of 108 to 135 months’ imprisonment.  He asked for a probationary sentence, based in large part on his history and characteristics, including his commitment to community services and improving the lives of those less fortunate than him, and the argument that he had been unduly influenced by Shkreli. The defense also focused on the collateral effects that the conviction would have on Greebel, who likely will never practice law again, and his wife and young children.  Greebel submitted nearly 300 pages of character letters to show the strong community support that he enjoyed.

The government conceded that a guidelines sentence was unwarranted in this case, but it would not agree to probation.  Instead, it asked the Court to sentence Greebel to at least 60 months’ imprisonment, given the nature and seriousness of the offense.  In its sentencing memorandum, the government characterized Greebel’s request for probation as an attempt to “carve out special treatment for white-collar criminals.”   

Judge Masumoto credited the arguments of both parties but ultimately decided that incarceration was necessary to effectuate the purposes of sentencing set forth in 18 U.S.C. § 3553(a).  She sentenced him to 18 months’ imprisonment and ordered him to pay more than $10.4 million in restitution and forfeit $116,462.

For the Record“

He was not wreckless, he was not naive, he’s not inexperienced,” Judge Matsumoto said. “He was not led astray by a young, brash CEO. Mr. Greebel made a conscious decision to join in the conspiracies.”

The Take Away

Despite the government’s and the Court’s stated desire to ensure that white-collar defendants are not treated differently than other defendants, Greebel received a downward variance of nearly 85% from the bottom of his guideline range.

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