Deborah L. Gramiccioni, Trial Attorney, Fraud Section, Criminal Division
Amy E. Potter, Assistant United States Attorney
US Assisting Agencies:
U.S. Securities and Exchange Commission
Foreign Enforcement Action/Investigation:
Unknown
Foreign Assistance:
Unknown
Origin of the Proceeding:
Voluntary disclosure
Whistleblower:
Unknown
Case Status:
Resolved
Summary
SSI International Far East, Ltd. ("SSI Korea") was a wholly-owned subsidiary of Schnitzer Steel Industries, Inc. ("Schnitzer Steel"), which was a publicly-traded company organized under the laws of Oregon with offices in Oregon, California and Washington. Schnitzer Steel was engaged in the vertically-integrated businesses of metals recycling, automobile parts, and steel manufacturing. SSI Korea was organized under the laws of the Republic of Korea ("South Korea"). SSI Korea assisted in the sale of scrap metal by Schnitzer to customers in South Korea and in the People's Republic of China and acted as a broker for the sale of scrap metal by Japanese suppliers to steel producers in South Korea. SSI Korea was managed by SSI International, Inc., a wholly-owned subsidiary of Schnitzer Steel in Tacoma, Washington.
From at least as early as 1995 through about August 2004, SSI Korea conspired with Schnitzer Steel to authorize and make payments, principally by means of cash "commissions" and "refunds," to officers and/or employees of government-owned and private steel production companies in China and South Korea to induce those companies to purchase scrap metal from Schnitzer Steel at advantageous prices. The corrupt payments totaled more that $1.8 million.
On October 16, 2006, the DOJ filed a four count Information in the District of Oregon against SSI Korea alleging (1) conspiracy to violate the anti-bribery and books & records provisions of the FCPA and conspiracy to commit wire fraud, (2) violations of the anti-bribery provisions of the FCPA, (3) wire fraud, and (4) aiding and abetting a known FCPA books & records violation. On the same date, SSI Korea entered into a plea agreement with the DOJ. Under the terms of the agreement, SSI Korea pleaded guilty to all four counts and agreed to pay a fine of $7.5 million plus a mandatory assessment of $400. Also on the same date, parent company Schnitzer Steel entered into a Deferred Prosecution Agreement with the DOJ. Under the terms of that agreement, Schnitzer Steel admitted and acknowledged its responsibility for the actions of SSI Korea and agreed to continue to implement and enhance its compliance programs and procedures, including the appointment of an independent monitor.
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