As the year draws to a close, we look back and reflect upon some of the key developments in cases of corruption around the world in 2020.
At the beginning of the year, the UK Serious Fraud Office (“SFO”) announced that it had entered into a record-breaking Deferred Prosecution Agreement (“DPA”) with global aerospace company Airbus SE, following an investigation into allegations that the company had used external consultants to bribe customers to buy its civilian and military aircrafts (you can read a detailed analysis of this DPA here). Airbus SE agreed to pay a fine and costs amounting to €991m in the UK, and in total, €3.6bn, as part of the world’s largest global resolution for bribery, involving authorities in France and the United States.
Two other corruption scandals dominated the landscape in January: the confirmation by Malaysia’s Anti-Corruption Commission that the UAE’s de-facto leader and Crown Prince of Abu Dhabi, Sheikh Mohammed bin Zayed, was involved in the 1Malaysia Development Berhad scandal; and German prosecutors commencing their investigation of two former Deutsche Bank AG employees accused of paying US$1.1m to secure the wealth management business of a senior Saudi royal.
During the summer, we saw the conclusion of a number of investigations, including those relating to Novartis, Alexion Pharmaceuticals, Herbalife, HNA Group Company, Henry Foo Yung Thye, Goldman Sachs, and Basil Al Jarah, among many others.
Back in 2013, federal prosecutors targeted Novartis for allegations that it offered kickbacks to doctors and illegal co-payment support to Medicare patients to boost its drug sales. Seven years on, the company agreed to a US$729m settlement. On the same day, Connecticut-based company Alexion also agreed to pay the Securities and Exchange Commission US$21.4m to resolve charges that it had violated the Foreign Corrupt Practices Act. The investigation related to allegations that foreign officials in Turkey and Russia had been bribed, and that the company had failed to maintain accurate books and records at its subsidiaries in Brazil and Colombia.
In late July, former deputy group director Henry Foo Yung Thye of the Land Transport Authority was charged with corruption involving £1.24m in loans from contractors and sub-contractors between 2014 and 2019. A little later in the year, on 28 August 2020, Herbalife agreed to pay the SEC and Department of Justice US$123m in penalties and disgorgement to resolve bribery allegations relating to its expansion of its business in China.
More recently, on 8 October 2020, Unaoil’s former partner, Basil Al Jarah, was sentenced to three years and four months’ imprisonment for paying in excess of US$17m in bribes to dishonestly secure approximately US$1.7bn worth of contracts in post-occupation Iraq. Mr Al Jarah pleaded guilty to five offences of conspiracy to give corrupt payments in relation to projects. Later that month, the Singaporean authorities ordered Goldman Sachs to pay US$122m for its involvement in a money laundering and bribery scandal. This represents the largest payment made to the country’s authorities by a financial institution for a crime-related matter.
In the final months of 2020, further corruption news emerged. Six oil executives, all of whom worked for Citgo (a U.S. refining company owned by Venezuela’s state oil firm), were jailed after being found guilty of corruption by a court in Venezuela. Citgo’s former president, Jose Pereira, was sentenced to over 13 years in prison and given a US$2m fine; the others (vice-presidents of the company at the time) received sentences of between eight and 10 years. It has been reported that the men plan to appeal their sentences, with critics of the sentences describing them as ‘political prisoners’.
As 2020 saw the conclusion of a number of corruption investigations, the world has simultaneously seen an increase in corrupt activity as fraudsters have sought to capitalise upon the opportunities brought about by the COVID-19 pandemic (read more about these here). It is therefore likely that 2021 will see a rise in investigations and enforcement action as the authorities seek to hold individuals and businesses involved in corrupt activity to account.