On July 17, 2015, Louis Berger International, Inc., a New Jersey-based construction management company, entered into a deferred prosecution agreement (DPA) with the Department of Justice under which it agreed to pay a $17.1 million penalty for violating the Foreign Corrupt Practices Act (FCPA). In addition to the hefty penalty paid, the company agreed to implement rigorous internal controls, continue to cooperate fully with the department, and retain a compliance monitor for at least three years.
According to the DPA, from 1998 through 2010, the company paid approximately $3.9 million in bribes to officials in India, Indonesia, Vietnam, and Kuwait to win construction management contracts. The company concealed the crimes by recording them as “commitment fees,” “counterpart per diems,” “marketing fees,” and “field operation expenses.” Company employees and agents also submitted inflated and fictitious invoices to generate cash that was then later used for the payment of bribes through intermediaries. Two former executives of the company also pleaded guilty to conspiracy and FCPA charges in connection with the scheme.
In deciding to enter into the DPA, the government considered Louis Berger’s self-reporting the FCPA offenses and its cooperation, including:
- voluntarily making U.S. and foreign employees available for interviews;
- conducting an extensive internal investigation and providing updates to the government as to the conduct and results of that investigation;
- collecting, analyzing, and organizing evidence and information for the government;
- committing to improve its compliance program and internal controls; and
- engaging in extensive remediation, including terminating all employees involved with the scheme and enhancing its due diligence protocol for third-party agents and consultants.
Companies should carefully scrutinize their international payments and invoices to make sure that hidden bribes are not being expensed with seemingly legitimate but vague and general descriptions.