Top FCPA Settlements: Landmark Cases and Monetary Sanctions

The Foreign Corrupt Practices Act (FCPA) has been a cornerstone of the United States’ efforts to combat corruption on a global scale. This landmark legislation is aimed at preventing companies and individuals from bribing foreign officials to gain unfair business advantages, ensuring a level playing field in international commerce. Over the years, numerous companies have faced significant enforcement actions under the FCPA for violating its provisions, resulting in some of the top 10 FCPA settlements of all time.

The FCPA is enforced by both the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC), often working in tandem to address violations of federal securities laws and the anti-bribery provisions of the act. These actions have led to billions of dollars in penalties, reshaping corporate compliance practices and sending a clear message that corruption will not be tolerated.

In this article, we’ll explore the FCPA’s key provisions, examine the top 10 FCPA settlements, review recent cases, and uncover lessons for compliance professionals striving to meet regulatory expectations.

What Is the Foreign Corrupt Practices Act or FCPA?

The Foreign Corrupt Practices Act (FCPA) was enacted in 1977 to address the bribery of foreign officials and improve transparency in financial reporting. Jointly enforced by the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC), the FCPA has two primary components:

• Anti-Bribery Provisions: Prohibit offering, promising, or giving anything of value to foreign officials to influence their actions or secure business advantages.
• Accounting Provisions: Require companies to maintain accurate records and implement internal controls to prevent illicit payments or bribery schemes.

The FCPA applies broadly, covering U.S. companies, foreign firms listed on U.S. exchanges, and individuals acting on behalf of these entities. Its enforcement has led to monumental settlements involving tens of millions (and even billions) in penalties.

What Are the Top FCPA Settlements?

Over the years, some FCPA settlements have set records for their monetary sanctions. Below is a consolidated list of the most significant cases, ranked by the fines and penalties paid.

Goldman Sachs (2020)

Goldman Sachs reached a historic nearly $3 billion settlement with the U.S. Department of Justice and Securities and Exchange Commission in October 2020 for its role in the 1MDB scandal. The bank was charged with conspiracy to violate the FCPA anti-bribery provisions and violations of internal accounting controls and books and records provision.

The 1MDB scandal involved bribes paid to high-level officials in multiple countries, including Chinese government officials and those in Malaysia. These payments were part of an elaborate scheme to secure lucrative government contracts and underwriting deals. Goldman Sachs employees paid over $1.6 billion in bribes to high-level officials in Malaysia and Abu Dhabi between 2009 and 2014 to secure lucrative business deals, including underwriting approximately $6.5 billion in bond offerings for 1MDB. This allowed Goldman to earn hundreds of millions in fees.

While Goldman Sachs implemented a comprehensive anti-corruption program, the DOJ and SEC concluded that its internal controls were deficient, as both low and high-level employees were able to circumvent them and engage in corrupt activities. The bank’s Malaysian subsidiary pleaded guilty to conspiracy charges.

Despite the record-breaking settlement amount, Goldman Sachs avoided some potentially harsher penalties:

• No independent compliance monitor was imposed, likely due to the bank’s significant remediation efforts.
• The criminal fine was reduced by 10% based on Goldman’s partial cooperation.

However, the DOJ did not grant full cooperation credit because Goldman significantly delayed producing relevant evidence during the investigation. The bank’s board also announced it would recoup or withhold $174 million in compensation from executives, including former CEO Lloyd Blankfein.

Telefonaktiebolaget LM Ericsson (2019)

In 2019, Telefonaktiebolaget LM Ericsson (publ), commonly known as Ericsson, faced significant legal consequences for its involvement in a widespread corruption scandal. Ericsson admitted to engaging in corruption across various countries, including payments to Chinese government officials to maintain its dominance in the telecommunications industry.

These actions highlight that FCPA violations are not simply about your actions, but also about the systems used to enable corrupt practices. The Swedish telecommunications giant agreed to pay $1 billion in penalties to resolve a bribery case brought by U.S. authorities.

The U.S. Department of Justice (DOJ) charged Ericsson with conspiracies to violate the 1977 Foreign Corrupt Practices Act (FCPA). The company admitted to engaging in a campaign of corruption across multiple countries, including Djibouti, China, Vietnam, Indonesia, and Kuwait, between 2000 and 2016. The corrupt practices were aimed at strengthening Ericsson’s position in the telecommunications industry.

Key aspects of the settlement included:

• A criminal penalty of over $520 million to the DOJ
• A fine of approximately $540 million to the U.S. Securities and Exchange Commission (SEC)
• Ericsson Egypt Limited, a subsidiary, pleading guilty to a charge of conspiring to violate the FCPA

The company’s corrupt practices involved using third-party agents and consultants to make payments to government officials and manage off-the-books slush funds. In China, for example, Ericsson channeled tens of millions of dollars through consultants to create a slush fund for lavish gifts and services to curry favor with state-owned telecoms firms.

As part of the settlement, Ericsson entered into a Deferred Prosecution Agreement (DPA) with the DOJ. This agreement required the company to implement reforms overseen by an independent monitor and to report any potential wrongdoing. The DPA was designed to allow Ericsson to avoid criminal conviction while ensuring compliance with anti-corruption laws.

Telia Company AB (2017)

In 2017, Telia Company AB and its Uzbek subsidiary Coscom LLC reached a $965 million global settlement with authorities in the United States, Sweden, and the Netherlands to resolve allegations of bribery in Uzbekistan. This marked the first major Foreign Corrupt Practices Act (FCPA) settlement under the Trump administration.

Key details of the settlement include:

• Total penalties: $965 million
• U.S. Department of Justice (DOJ): $274.6 million criminal penalty
• U.S. Securities and Exchange Commission (SEC): $457 million in disgorgement
• Dutch Public Prosecution Service: $208.5 million

The allegations centered on Telia paying over $331 million in bribes to Gulnara Karimova, daughter of the late Uzbek President Islam Karimov, to enter and expand in the Uzbek telecommunications market. Specific corrupt practices included:

• A $2 million cash payment to Karimova’s representative
• Entering a share purchase agreement giving Karimova’s company rights to purchase and sell back Coscom shares at a profit
• Paying $9.2 million for number series and network codes
• Agreements to pay $15 million for certain telecom assets

As part of the settlement, Telia entered into a Deferred Prosecution Agreement with the DOJ and agreed to implement an improved compliance program and internal controls. The SEC charged Telia with violating the FCPA’s anti-bribery and internal accounting controls provisions.

Mobile Telesystems (MTS) (2019)

In March 2019, Mobile TeleSystems PJSC (MTS), Russia’s largest telecommunications provider, reached an $850 million settlement with U.S. authorities to resolve allegations of Foreign Corrupt Practices Act (FCPA) violations in Uzbekistan. The settlement included:

• $100 million penalty to the Securities and Exchange Commission (SEC)
• A $750 million criminal fine and forfeiture resolution with the Department of Justice (DOJ)

Key details of the case:

• Bribery scheme: MTS paid at least $420 million in bribes to an Uzbek official related to the former President of Uzbekistan to enter and operate in the country’s telecommunications market.
• Duration and profits: The scheme lasted from 2004 to 2012, during which MTS generated over $2.4 billion in revenues.
• Illicit payments: Bribes were disguised as acquisition costs, option payments, purchases of regulatory assets, and charitable donations.
• Subsidiary involvement: MTS’ Uzbek subsidiary, Kolorit Dizayn Ink, pleaded guilty to FCPA charges.

Resolution terms:

• Three-year deferred prosecution agreement with the DOJ
• Appointment of an independent compliance monitor for at least three years
• Violations of anti-bribery, books and records, and internal accounting control provisions of the Securities Exchange Act of 1934

Broader context: This case was part of a larger investigation into corruption in Uzbekistan’s telecommunications sector, following similar settlements with VimpelCom ($795 million in 2016) and Telia Company AB ($965 million in 2017).

Siemens (2008)

In 2008, Siemens AG, the German industrial conglomerate, reached a historic $1.6 billion settlement with U.S. and German authorities to resolve one of the largest corporate bribery scandals in history. The case involved systematic corruption spanning from 2000 to 2006, during which Siemens engaged in approximately 4,000 separate bribery payments totaling around 1.3 billion euros.

Key aspects of the settlement included:

• A $800 million penalty in the U.S., split between the Department of Justice and the Securities and Exchange Commission
• A 395 million euro fine to German prosecutors
• An additional 201 million euro fine levied by German courts in 2007 for misconduct at Siemens’ former telecommunications unit

The bribery scheme was global in scope, with Siemens paying bribes to win contracts in various countries, including:

• Venezuela: Metro transit lines
• Israel: Power plants
• Mexico: Refineries
• Bangladesh: Mobile telephone networks
• Argentina: National identity cards
• Vietnam, China, and Russia: Medical devices

Siemens also paid kickbacks to Iraqi ministries for power station and equipment sales under the United Nations Oil for Food Program.

The company’s internal controls were severely lacking, allowing the corrupt practices to flourish. Some methods used to facilitate bribery included:

• Cash payments transported in suitcases across borders
• Use of Post-it notes for payment authorizations to avoid permanent records
• Numerous slush funds and off-book accounts
• A system of business consultants and intermediaries

As part of the settlement, Siemens agreed to appoint a former German finance minister, Theo Waigel, as a compliance monitor to ensure future business integrity. The company also undertook significant remediation efforts, including management changes and the implementation of enhanced compliance programs.

This case marked a turning point in international anti-corruption enforcement, setting new standards for corporate penalties and compliance expectations in global business operations.

Alstom (2014)

Alstom SA, a French power and transportation company, reached a historic $772 million settlement with the U.S. DOJ in December 2014 to resolve widespread bribery charges. The company admitted to engaging in a corrupt scheme that involved paying at least $75 million in bribes to government officials in various countries, including Indonesia, Saudi Arabia, Egypt, the Bahamas, and Taiwan.

Key aspects of the case include:

• Bribery scheme: Alstom paid bribes to secure over $4 billion in projects worldwide, resulting in approximately $300 million in profits for the company.
• Concealment methods: The company used third-party consultants and code names like “Mr. Geneva,” “Mr. Paris,” and “Old Friend” to disguise bribe payments.
• Specific examples: In Indonesia, Alstom bribed high-ranking members of the Indonesian Parliament and officials at Perusahaan Listrik Negara, the state-owned electricity company, to secure contracts worth approximately $375 million.
• Lack of cooperation: The DOJ noted that Alstom initially failed to cooperate with law enforcement and attempted to cover up its involvement in the early stages of the investigation.
• Guilty plea: Alstom pleaded guilty to violating the Foreign Corrupt Practices Act (FCPA) and falsifying books and records.

The DOJ emphasized that Alstom’s lack of effective compliance programs contributed to the extensive bribery scheme. This case serves as a warning to international corporations about the importance of implementing robust anti-corruption measures and cooperating with authorities in investigations.

Glencore (2022)

In May 2022, Glencore, the Swiss-based multinational commodity trading company, reached a historic $1.1 billion settlement with authorities in the United States, United Kingdom, and Brazil to resolve widespread bribery and market manipulation charges. The company admitted to engaging in a decade-long scheme of corruption spanning multiple countries. (Source: Office of Public Affairs).

In addition to its global bribery schemes, Glencore faced allegations of paying Brazilian government officials to secure access to natural resources and oil deals, showcasing the risks associated with obtaining lucrative government contracts in resource-rich nations.

Key aspects of the settlement include:

• Bribery scheme: Glencore paid over $100 million in bribes to government officials in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea, Brazil, Venezuela, and the Democratic Republic of Congo (DRC).
• Financial penalties:

• $700 million to resolve U.S. bribery investigations
• $485 million to resolve market manipulation investigations
• Additional fines in the UK and Brazil

• Specific examples:

• Nigeria: Paid more than $52 million to intermediaries for bribing officials, resulting in $124 million in profits
• Brazil: Paid approximately $147,202 in 2011 for corrupt payments to secure an oil cargo from Petrobras
• Venezuela: Paid over $1.2 million to an intermediary for bribing officials related to oil purchases and late-payment interest charges

• Market manipulation: Glencore was accused of creating false appearances of supply and demand to manipulate oil prices.
• Guilty plea: Glencore pleaded guilty to violating the Foreign Corrupt Practices Act (FCPA) and falsifying books and records.

KBR Halliburton (2009)

In 2009, Kellogg Brown & Root LLC (KBR), a former Halliburton subsidiary, settled a significant FCPA case involving a decade-long bribery scheme in Nigeria.

• Settlement Amount: $579 million ($402 million criminal fine to the DOJ; $177 million disgorgement to the SEC)
• Bribery Scheme: KBR paid $182 million in bribes to Nigerian officials (1994–2004) to secure $6 billion in contracts for the Bonny Island LNG facility.
• Joint Venture: Bribes were funneled through TSKJ, a joint venture with companies from France, Italy, and Japan, using intermediaries and offshore shell companies.
• Outcome: KBR pleaded guilty to FCPA violations, and Halliburton, as its parent during the relevant period, was jointly responsible for SEC disgorgement.
• Compliance Measures: KBR was required to retain an independent compliance monitor for three years to improve its FCPA compliance program.

TEVA Pharmaceuticals (2016)

Teva Pharmaceutical Industries Ltd. agreed to pay $519 million in 2016 to settle charges that it violated the Foreign Corrupt Practices Act (FCPA) by bribing government officials in Russia, Ukraine, and Mexico. The settlement included $283 million in criminal penalties and $236 million in disgorgement to the SEC.

Key aspects of the case:

• Russia: Teva paid bribes to a high-ranking Russian official to increase sales of its multiple sclerosis drug, Copaxone, earning over $200 million in profits.
• Ukraine: The company bribed a senior Ukrainian health official to influence drug registrations, paying approximately $200,000 in fees and benefits.
• Mexico: Teva’s subsidiary paid about $16.8 million in bribes to doctors at government hospitals to prescribe Copaxone.
• Internal controls: Teva admitted to failing to implement adequate internal accounting controls, despite executives being aware of bribery risks.

Recent Top FCPA Settlements

In addition to historical cases, recent years have brought significant FCPA enforcement actions.

2022

Apart from Glencore, notable settlements included:

• Honeywell International Inc.: Paid $160 million to resolve allegations of bribing Brazilian officials to win contracts.
• ABB Ltd.: The Swiss engineering giant agreed to pay $315 million for bribing South African officials to secure energy contracts.

2023

• Frank’s International: Paid $8 million to settle charges of bribing Angolan officials.
• Microsoft Hungary: The DOJ alleged illicit payments to government officials, resulting in a $25 million settlement.

2024

While enforcement data for 2024 is still emerging, several companies are under investigation for potential FCPA violations, highlighting the ongoing importance of compliance programs and internal investigations.

What We Can Learn From These FCPA Cases

1. The Importance of Compliance Programs: Strong internal accounting controls and regular risk assessments can prevent violations. Companies like Siemens and TEVA faced severe penalties due to compliance failures.
2. The Role of Third-Party Intermediaries: Many FCPA violations involve bribes paid through intermediaries. Vetting third parties is essential to minimize risks.
3. Whistleblower Impact: Whistleblowers play a critical role in uncovering corruption. Companies must foster a culture where employees feel safe reporting concerns.
4. Cooperation Matters: The DOJ and SEC often reward companies for extraordinary cooperation and extensive remediation, as seen in cases like Goldman Sachs.

Role of the Whistleblower Attorney in FCPA Cases

Whistleblowers are instrumental in FCPA enforcement actions. They often provide critical information about illicit payments, internal misconduct, and improper benefits to foreign officials.

An experienced whistleblower attorney at The McCabe Law Firm helps individuals navigate complex legal protections, such as those under the Dodd-Frank Act and the SEC Whistleblower Program, ensuring insiders can safely expose international corruption while pursuing the financial rewards they may be legally entitled to receive.

Conclusion

The FCPA continues to shape corporate behavior globally, holding companies accountable for bribery schemes, improper payments, and compliance lapses. By analyzing landmark cases like Goldman Sachs, Siemens, and Glencore, businesses can learn valuable lessons about the importance of compliance programs and the risks of potential FCPA violations.

As enforcement actions remain robust, companies must prioritize transparency, compliance, and ethical behavior to avoid being the next headline-making case in FCPA history. If you possess firsthand knowledge of international corporate bribery, books-and-records manipulation, or illicit foreign payments, protect your rights from day one. Contact The McCabe Law Firm today for a confidential case evaluation.