Enforcement Action

 

Docket or Case Number:    N/A

Court:    N/A

Initiation Date:    06/29/2017  Information

Prosecuting Agency:    US Department of Justice

Name of Prosecuting Attorneys:   

  • Nicola J. Mrazek, Senior Litigation Counsel, FCPA Unit, Fraud Section, Criminal Division
  • Daniel Kahn, Chief, FCPA Unit, Fraud Section, Criminal Division

Assisting Agencies:    N/A

Type of Action:    DOJ Criminal Proceeding

Origin of the Proceeding:    Voluntary disclosure

Whistleblower:    Unknown

Case Status:    Resolved


Summary

CDM Smith, Inc. was a privately held engineering and construction firm incorporated and headquartered in Boston, Massachusetts.

CDM Smith India Private Limited was a wholly-owned subsidiary of CDM Smith in India.

From about 2011 to 2015, employees of CDM Smith’s internal division for Indian operations as well as employees of CDM Smith India paid bribes to officials at the National Highways Authority of India (“NHAI”), which was India’s state-owned highway management agency, as well as to local officials in the Indian state of Goa. Senior management of CDM Smith India approved and participated in the bribery scheme. In all, CDM Smith paid approximately $1.18 million in bribes in India in order to secure contracts for highway construction supervision and design from NHAI and for a separate water project in the state of Goa. These contracts resulted in over $4 million in profits to CDM Smith.

On June 29, 2017, the DOJ issued a declination letter to CDM Smith pursuant to its FCPA Pilot Program. In declining to prosecute CDM Smith, the DOJ cited the company’s voluntary self-disclosure of the misconduct, thorough cooperation, extensive remediation, and agreement to disgorge the profits associated with the misconduct. CDM Smith disgorged just over $4 million.

Country(ies) involved:    India

Sanction to Bribe Ratio:    $4,037,138 / $1,180,000 = 342.13 %

Sanction to Revenue Ratio:    N/A

Sanction to Profit Ratio:    $4,037,138 / $4,037,138 = 100.00 %

Number of Related Enforcement Actions (Including This Enforcement Action):    1

Country(ies) involved:    India

Total $ Bribery Payments:    $1,180,000

Total $ Revenue Generated from Bribery:    N/A

Total $ Profit Earned or Expenses Avoided from Bribery:    $4,037,138

Total $ Monetary Sanctions:    $4,037,138

Sanction to Bribe Ratio:    $4,037,138 / $1,180,000 = (342.13 %)

Sanction to Revenue Ratio:    N/A

Sanction to Profit Ratio:    $4,037,138 / $4,037,138 = (100.00 %)

Name:    CDM Smith, Inc.

Place of Incorporation:    United States

HQ Country(ies):    United States

Entity Type:    Private Company

FCPA Claims:    Anti-Bribery, Primary, Domestic Concern (15 U.S.C. § 78dd-2)

Related Claims:    N/A

Statutory Basis for FCPA Jurisdiction:    Domestic Concern

Period of Bribery:   2011 - 2015

Total Bribery Payments:    $1,180,000

Total Revenue Generated from Bribery:    N/A

Total Profit Earned or Expenses Avoided from Bribery:    $4,037,138

Country(ies) involved:    India

Officials Potentially Influenced (Name; Title; Organization): 

  • Name N/A, Officials; Indian state of Goa
  • Name N/A, Officials; National Highways Authority of India

Defendant-Related Entities Involved in the Misconduct:    N/A

Third-Party Intermediary:   

  • Fraudulent subcontractors , Contractor/Sub-Contractor

Type of Bribe:   Money

Cash, Wire or Check:    No Available

Purpose of Bribe:    Obtain/retain business

TRANSACTION OVERVIEW
Bribery in India

Period of Bribery:   2011 – 2015

Total Bribery Payments:    $1,180,000

Total Revenue Generated from Bribery:    N/A

Total Profit Earned or Expenses Avoided from Bribery:    $4,037,138

Country(ies) involved:    India

Officials Potentially Influenced (Name; Title; Organization):  

  • Name N/A, Officials; National Highways Authority of India;
  • Name N/A, Officials; Indian state of Goa;

Defendant-Related Entities Involved in the Misconduct:    N/A

Third Party Intermediary:    Fraudulent subcontractors - Contractor/Sub-Contractor

Type of Bribe:   Money

Cash, Wire or Check:    No Available

Purpose of Bribe:    Obtain/retain business

Misconduct by Subsidiary?  Yes


Parent(s):   CDM Smith, Inc.

Subsidiary:  CDM Smith India Private Limited

  • Percentage of Ownership:    100.00 %
  • Direct or Indirect Ownership:    Unknown
  • Parent Had Knowledge of Sub’s Bribery?:    No
  • Subsidiary Expressly Alleged to Be Parent's Agent:    No
  • Parent Liable for Sub Misconduct?:    No

M&A Negotiated or Completed During Misconduct, Investigation, or Resolution?     No

N/A

Mitigating Factors Referenced by the Government (Company Defendants):

Defendant Self-Report Cooperation Voluntary Remedial Measures Misconduct Limited to Low Level Individuals Other factors
CDM Smith, Inc.    

Aggravating Factors Referenced by the Government (Company Defendants):

Defendant Insufficient Cooperation Insufficient Remedial Measures
CDM Smith, Inc.    

Total Monetary Sanctions for the Action:    $4,037,138

Case Status:    Resolved


Disposition:    Declination with Disgorgement

Date of Disposition:    06/29/2017

CDM Smith, Inc.

—  Total Monetary Sanctions for Defendant:    $4,037,138

—  Organizational Probation:    None

—  Compliance Obligation:    No

—  Reporting Obligation:    No Applicable

—  Admission of Guilt/Acceptance of Responsibility:    Yes

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