Telecommunications Company Agrees To Plead Guilty Following Alleged Breach Of 2019 Deferred Prosecution Agreement
On March 2, 2023, the Department of Justice (“DOJ”) announced that a multinational telecommunications company headquartered in Stockholm, Sweden (the “Company”) agreed to plead guilty and to pay a penalty of approximately $206 million after allegedly breaching the cooperation and disclosure provisions of a 2019 Deferred Prosecution Agreement (“DPA”) it had previously entered into to address claims that it participated in a scheme to pay bribes, falsify books and records, and failed to implement reasonable internal accounting controls in violation of the Foreign Corrupt Practices Act (“FCPA”).
In 2019, the Company entered into a DPA with the DOJ to resolve allegations that it had violated the FCPA through conduct lasting from 2000 through 2016. At the time, the Company agreed to the filing of a two-count criminal information in the Southern District of New York, agreed to pay a criminal penalty of approximately $520 million, and agreed to the imposition of an independent compliance monitor for three years. At the end of 2022, the Company agreed with the DOJ to extend the term of the compliance monitor by an additional year, to end in June 2024.
During the extended period of the monitorship, the DOJ claims that the Company breached the DPA by failing to disclose all factual information and evidence related to alleged schemes in Djibouti and China and other potential violations of the FCPA’s anti-bribery and accounting provisions and for failing to promptly report and disclose material information and evidence for its business activities in Iraq that may have violated the Act. The DOJ claims that, as a result of these breaches, it was unable to bring charges against certain persons and pursue investigative steps.
The Company agreed to resolve the DOJ’s claims that it had violated the DPA by agreeing to plead guilty to the original charges deferred by the DPA—one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of conspiracy to violate the internal controls and books provisions of the FCPA. It further agreed to pay an additional penalty of $206 million, agreed to serve a term of probation through June 2024, and agreed to a further one-year extension of the independent compliance monitor.
While the DOJ has used DPAs and compliance monitors somewhat more sparingly in recent years, the case is a reminder that DPAs generally, and compliance monitors in particular, have a real and lasting impact that can provide the DOJ substantial leverage in the event that they are unsatisfied by a company’s later compliance efforts.