Business Crimes Hotline

MARYLAND

Lawyer Charged with Obstruction and False Statements

The DOJ charged Lauren Stevens, a Vice President and Associate General Counsel at GlaxoSmithKline, with obstructing an official proceeding, concealing and falsifying documents, and multiple counts of making false statements.

Federal law prohibits promoting drugs for uses other than those that have been approved. According to the indictment, the FDA asked the pharmaceutical company for information about its promotion of a particular drug in an effort to determine whether it had marketed the drug “off-label.” The government alleges that, in response, Stevens sent letters to the FDA denying that the company had marketed the drug improperly. According to the indictment, however, she knew at the time that the drug had been promoted for unapproved uses. Specifically, the government claimed that she knew of numerous payments to physicians to tout unapproved uses of the drug. In addition to these misrepresentations, the government alleged that Stevens withheld documents, even after the FDA specifically asked for them and Stevens agreed to provide them.

Stevens faces 20 years on each obstruction charge and five years on the false statement counts.

VIRGINIA

Principal of Life Settlement Fund Pleads Guilty to $100 Million Fraud

A principal of the A&O entities, Brent Oncale, pleaded guilty to conspiracies to commit mail fraud and money laundering.

A&O was a group of businesses that marketed over $100 million investments in life settlements. Out of the fraud, there were more than 800 victims who lost a total of over $50 million. The indictment alleged that Oncale admitted having made misrepresentations to investors about the use of investors' funds and the risks of the offerings. In addition, he admitted that he did not inform investors that most of their money would be used for purposes other than purchasing and maintaining A&O's life settlements portfolio. Oncale faces a maximum penalty of five years in prison and a $250,000 fine for each count.

WASHINGTON, DC

Panalpina and Its Customers Settle FCPA Charges

On Nov. 4, 2010, the DOJ charged global freight forwarding company Panalpina World Transport (Holding) Ltd. with conspiring to violate and violating the anti-bribery provisions of the FCPA. Panalpina, Inc. (the U.S. subsidiary of Panalpina World Transport) was also charged with conspiring to violate the books and records provisions of the FCPA and aiding and abetting books and records violations.

In the filed documents, the Panalpina companies admitted that they took part in a scheme to bribe an array of foreign officials on behalf of oil and gas customers that resulted in at least $27 million in payments in Angola, Brazil, and Kazakhstan, among other countries. The scheme was intended to ease local regulations related to the import of goods.

To resolve the charges, Panalpina World Transport entered into a deferred-prosecution agreement and Panalpina, Inc. pleaded guilty. The criminal penalties to be paid by the two entities total $70.56 million. At the same time, Panalpina, Inc. settled a civil action with the SEC, agreeing to pay $11.3 million in disgorged profits.

The DOJ also settled FCPA cases against a number of Panalpina customers. SNEPCO (the Nigerian subsidiary of Royal Dutch Shell plc) entered into a deferred prosecution agreement to resolve charges based on approximately $2 million in payments made with the knowledge that Panalpina would use at least some portion of the money to bribe Nigerian officials to ease imports into the country. Under that agreement, SNEPCO will pay a $30 million criminal penalty.

Transocean, Inc. (the Cayman subsidiary of offshore drilling services and equipment provider Transocean Ltd.) will pay a criminal penalty of $13.44 million, pursuant to a deferred-prosecution agreement resolving charges based on $90,000 in bribes paid to freight forwarding agents in Nigeria to Nigerian customs officials.

Tidewater Marine, Inc. (a Cayman subsidiary of offshore service and supply vessel operator Tidewater, Inc.) will pay a criminal penalty of $7.35 million under the deferred-prosecution agreement based on charges related to $160,000 in bribes paid to tax inspectors in Azerbijan and $1.6 million in bribes paid to Nigerian customs officials.

Pride International, Inc. entered into a deferred-prosecution agreement and its French subsidiary, Pride Forasol, S.A.S., pleaded guilty to resolve FCPA charges based on payments totaling $800,000 to government officials in Venezuela, India, and Mexico. Under the resolutions, the companies will pay a total criminal penalty of $32.625 million. The DOJ noted Pride's substantial assistance in the investigation of Panalpina. Finally, the DOJ also entered into a non-prosecution agreement with Noble Corporation under which it will pay a $2.59 million criminal penalty. Noble admitted payments of $74,000 to a freight forwarding agent, some of which employees knew would be used as bribes to Nigerian customs officials.

MARYLAND

Lawyer Charged with Obstruction and False Statements

The DOJ charged Lauren Stevens, a Vice President and Associate General Counsel at GlaxoSmithKline, with obstructing an official proceeding, concealing and falsifying documents, and multiple counts of making false statements.

Federal law prohibits promoting drugs for uses other than those that have been approved. According to the indictment, the FDA asked the pharmaceutical company for information about its promotion of a particular drug in an effort to determine whether it had marketed the drug “off-label.” The government alleges that, in response, Stevens sent letters to the FDA denying that the company had marketed the drug improperly. According to the indictment, however, she knew at the time that the drug had been promoted for unapproved uses. Specifically, the government claimed that she knew of numerous payments to physicians to tout unapproved uses of the drug. In addition to these misrepresentations, the government alleged that Stevens withheld documents, even after the FDA specifically asked for them and Stevens agreed to provide them.

Stevens faces 20 years on each obstruction charge and five years on the false statement counts.

VIRGINIA

Principal of Life Settlement Fund Pleads Guilty to $100 Million Fraud

A principal of the A&O entities, Brent Oncale, pleaded guilty to conspiracies to commit mail fraud and money laundering.

A&O was a group of businesses that marketed over $100 million investments in life settlements. Out of the fraud, there were more than 800 victims who lost a total of over $50 million. The indictment alleged that Oncale admitted having made misrepresentations to investors about the use of investors' funds and the risks of the offerings. In addition, he admitted that he did not inform investors that most of their money would be used for purposes other than purchasing and maintaining A&O's life settlements portfolio. Oncale faces a maximum penalty of five years in prison and a $250,000 fine for each count.

WASHINGTON, DC

Panalpina and Its Customers Settle FCPA Charges

On Nov. 4, 2010, the DOJ charged global freight forwarding company Panalpina World Transport (Holding) Ltd. with conspiring to violate and violating the anti-bribery provisions of the FCPA. Panalpina, Inc. (the U.S. subsidiary of Panalpina World Transport) was also charged with conspiring to violate the books and records provisions of the FCPA and aiding and abetting books and records violations.

In the filed documents, the Panalpina companies admitted that they took part in a scheme to bribe an array of foreign officials on behalf of oil and gas customers that resulted in at least $27 million in payments in Angola, Brazil, and Kazakhstan, among other countries. The scheme was intended to ease local regulations related to the import of goods.

To resolve the charges, Panalpina World Transport entered into a deferred-prosecution agreement and Panalpina, Inc. pleaded guilty. The criminal penalties to be paid by the two entities total $70.56 million. At the same time, Panalpina, Inc. settled a civil action with the SEC, agreeing to pay $11.3 million in disgorged profits.

The DOJ also settled FCPA cases against a number of Panalpina customers. SNEPCO (the Nigerian subsidiary of Royal Dutch Shell plc) entered into a deferred prosecution agreement to resolve charges based on approximately $2 million in payments made with the knowledge that Panalpina would use at least some portion of the money to bribe Nigerian officials to ease imports into the country. Under that agreement, SNEPCO will pay a $30 million criminal penalty.

Transocean, Inc. (the Cayman subsidiary of offshore drilling services and equipment provider Transocean Ltd.) will pay a criminal penalty of $13.44 million, pursuant to a deferred-prosecution agreement resolving charges based on $90,000 in bribes paid to freight forwarding agents in Nigeria to Nigerian customs officials.

Tidewater Marine, Inc. (a Cayman subsidiary of offshore service and supply vessel operator Tidewater, Inc.) will pay a criminal penalty of $7.35 million under the deferred-prosecution agreement based on charges related to $160,000 in bribes paid to tax inspectors in Azerbijan and $1.6 million in bribes paid to Nigerian customs officials.

Pride International, Inc. entered into a deferred-prosecution agreement and its French subsidiary, Pride Forasol, S.A.S., pleaded guilty to resolve FCPA charges based on payments totaling $800,000 to government officials in Venezuela, India, and Mexico. Under the resolutions, the companies will pay a total criminal penalty of $32.625 million. The DOJ noted Pride's substantial assistance in the investigation of Panalpina. Finally, the DOJ also entered into a non-prosecution agreement with Noble Corporation under which it will pay a $2.59 million criminal penalty. Noble admitted payments of $74,000 to a freight forwarding agent, some of which employees knew would be used as bribes to Nigerian customs officials.