Foreign Corrupt Practices Act Alert: IAP Worldwide Services, Inc. Agrees to Pay $7.1 Million to Resolve DOJ Investigation into Conspiracy to Violate FCPA by Providing Bribes to Kuwaiti OfficialsJune 18, 2015
On June 16, 2015, the United States Department of Justice, Criminal Division, Fraud Section and the United States Attorney’s Office for the Eastern District of Virginia (collectively, DOJ) announced a non-prosecution agreement (NPA) with IAP Worldwide Services, Inc., pursuant to which IAP agreed to pay a $7.1 million penalty to resolve an investigation into whether IAP conspired to violate the anti-bribery provisions of the Foreign Corrupt Practices Act. In connection with the NPA, IAP admitted that it conspired to pay Kuwaiti officials approximately $1.78 million through an intermediary between September 2006 and March 2008 to secure contracts for a project undertaken by Kuwait’s Ministry of the Interior (MOI) to develop nationwide surveillance capabilities for the Kuwaiti government. DOJ separately charged a former vice president of IAP, James Michael Rama, with one count of conspiracy to violate the anti-bribery provisions of the FCPA. Rama pleaded guilty to that charge on June 16 in the U.S. District Court for the Eastern District of Virginia and will be sentenced in September 2015.
This NPA illustrates the importance DOJ places on a rigorous anti-corruption compliance program. DOJ considers the “minimum elements” of such a program to include: (a) written anti-corruption policies and procedures that are enforced at all levels of the company; (b) periodic assessments of corruption-related risks; (c) high-level commitment to and oversight of an anti-corruption compliance program; (d) periodic anti-corruption compliance training; (e) internal reporting and investigation of potential violations of anti-corruption laws, policies and procedures; (f) risk-based due diligence of agents and business partners; and (g) risk-based due diligence of new business entities formed through merger and acquisition activity. The NPA also demonstrates that, in some situations, companies may avoid prosecution even in cases involving serious allegations of bribery if the company investigates the conduct, engages in remediation, and cooperates fully with law enforcement.