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Phillip Caraballo-Garrison

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Phil Caraballo is a senior associate in the Litigation Department, where he also represents the Litigation Department on the Associate Council. His practice focuses on white collar criminal defense and corporate investigations, appellate litigation, and complex civil litigation at both the state and federal levels.

As a member of the White Collar Defense & Investigations Group, Phil represents clients in prosecutions involving a broad array of federal and state crimes, including insider trading, racketeering, tax evasion, money laundering, and antitrust charges. He frequently guides corporate clients through internal investigations conducted in cooperation with law enforcement and regulatory agencies, and internal investigations and due diligence processes focused on resolving potential anti-corruption issues under the FCPA.

Earlier this week, Alstom S.A., a French multinational power and transportation company, pleaded guilty in the District of Connecticut to a two-count information charging it with violating the accounting provisions of the Foreign Corrupt Practices Act.  The penalty levied against Alstom, over $772 million, will be the largest criminal fine that has ever been imposed under the FCPA.  Provided that the District Court approves the plea agreement negotiated between Alstom and the Department of Justice, the resolution will rank just under the 2008 Siemens FCPA resolution, which involved combined criminal and civil penalties of approximately $800 million.

According to the information, the corrupt conduct of Alstom personnel and agents, though noteworthy in its breadth and length of time, has the hallmarks of a textbook FCPA case: the use of third party consultants (often referred to by codename) with little documentation corroborating the purposes for their massive fees; a foreign subsidiary subject to insufficient parental supervision; attempts to obtain lucrative contracts for power and transportation projects for state-owned companies; and a failure to respond to red flags.


US DOJ sealThe U.S. Department of Justice recently publicized its second Foreign Corrupt Practices Act Opinion Procedure Release of 2014.  In the Release, the DOJ reiterated that an acquiring company may not inherit FCPA liability when the DOJ did not have jurisdiction over the target company’s prior corrupt activities.

The DOJ has repeatedly asserted that, through principles of successor liability, an acquiring company in an M&A transaction may assume FCPA liability for the pre-acquisition bribes paid by the target to foreign government officials.  Out of concern for this potential avenue of liability, a U.S.-based consumer products company recently sought guidance from the DOJ on whether it would bring an enforcement action for the pre-acquisition corrupt activities of a wholly-foreign target company.  The U.S. company sought this guidance by exercising a unique statutory procedure whereby companies can request a DOJ opinion on the FCPA enforcement ramifications of proposed conduct.  See 15 U.S.C. §§ 78dd-1(e), -2(f).


Attorney General Eric Holder and Principal Deputy Assistant Attorney General for the Criminal Division Marshall Miller have sent the message that the Department of Justice is looking to hold individuals responsible for corporate crime.

Holder, speaking at New York University, announced that the department is currently investigating the conduct of individuals at certain financial institutions and “expect[s] to bring charges in the coming months.” Holder also called on Congress to provide more robust incentives for whistleblowers under the Financial Institutions Reform, Recovery, and Enforcement Act (“FIRREA”), and suggested a reward commensurate with that provided under the False Claims Act (up to 30% of the sanction imposed) to induce employees to come forward with information.