Individual Liability Continues at a Drip

Despite the DOJ’s repeated emphasis on holding individuals criminally responsible for corporate misconduct, such as the remarks by Lisa H. Miller, Deputy Assistant Attorney General for the DOJ’s Fraud and Appellate Sections in 2022, the number of individual defendants charged with FCPA-related violations by the SEC and DOJ has steadily declined in recent years. The SEC has not initiated an FCPA-related action against an individual since 2020.

The slow start in 2024 seems to reflect that trend may continue. According to MoFo’s FCPA Year in Review, despite a steady increase in FCPA enforcement actions generally, the enforcement actions against individuals fell from 28 in 2021, to 16 in 2022, and just 7 in 2023.

In the first quarter of 2024, the DOJ initiated just two enforcement actions against individual defendants. Mauricio Gomez Baez and Abraham Cigarroa Cervantes were high-level employees at Stericycle, Inc., a U.S.-based waste management company, which already resolved its own FCPA-related enforcement actions with the SEC and DOJ in 2022 for misconduct in Latin America. The two executives in Stericycle’s Latin America subsidiary were indicted for their roles in a scheme to bribe officials in Mexico, Brazil, and Argentina.

In April 2024, the DOJ’s Criminal Division announced a new pilot program that offers wrongdoers non-prosecution agreements if they voluntarily turn in themselves and their co-conspirators and meet a host of very specific criteria. Principal Deputy Assistant Attorney General Nicole M. Argentieri explained in a blog post published on the DOJ website that the pilot program is meant to “provide clear incentives and encourage individuals to come forward,” which, in turn, allows the DOJ to “to prosecute more culpable individuals and to hold companies to account.”

According to Argentieri, under the new program, culpable individuals will receive a non-prosecution agreement if they (1) voluntarily, (2) truthfully, and (3) completely self-disclose original information regarding misconduct that was unknown to the department in certain high-priority enforcement areas, (4) fully cooperate and are able to provide substantial assistance against those equally or more culpable, and (5) forfeit any ill-gotten gains and compensate victims.  This program is different from the Whistleblower Pilot Program announced by DOJ in March 2024 which offers financial incentives to individuals not involved in criminal activity to come forward with information. 

It remains to be seen how much, if any, impact the pilot program will have on the trends related to individual prosecutions.

Gwen Romack

CCEP, PMP, CPMP, SSGB, GRCP, TASA

Principal, Off Leash Consulting

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Note: Some actions initiated against individuals in the first quarter of 2024 may have been filed under seal, so the view may change in the coming months as indictments are unsealed by the courts.