Beam Suntory Inc. ("Beam"), formerly known as Beam Inc. and Beam Global Spirits & Wine Inc., was headquartered in Illinois and produced and sold distilled beverages worldwide. Beam's securities were registered with the SEC and traded on the New York Stock Exchange until April 2014 when the company was taken private and delisted from the exchange.
Beam Global Spirits & Wine (India) Private Limited ("Beam India") was acquired by Beam in 2006. Beam India imported and distributed Beam's products throughout India. During the relevant time period, Beam India was a wholly owned subsidiary of Beam.
According to the documents in this case, from the time Beam acquired the Indian business in 2006 to 2012, Beam India paid bribes and made other improper payments to various Indian government officials in order to obtain business in the Indian market. Most of the corrupt payments were made through third-party sales promoters and distributors, who paid government officials to secure orders of Beam products at government-controlled depots and retail stores, obtain prominent placement of Beam products in government retail stores, acquire and renew label registrations and licenses, and enable the distribution of Beam spirit products from Beam India’s Behror bottling facility to warehouses in other states throughout India. Executives at Beam and Beam India knew about and authorized the payments.
On October 21, 2020, the DOJ filed a single count Information in the Northern District of Illinois against Beam alleging a conspiracy to violate the anti-bribery, books and records, and internal controls provisions of the FCPA. On October 23, 2020, the company entered into a deferred prosecution agreement with the DOJ. Under the terms of the settlement, Beam agreed to pay a criminal fine of $19,572,885, which represented a 10% reduction off the bottom end of the U.S. Sentencing Guidelines range, and to self-report on the status of the company's enhanced anti-corruption compliance policies and procedures to the DOJ for a term of three years. The DOJ noted Beam's partial cooperation and remediation, but the company received no credit for voluntarily disclosing the misconduct because it first came to the attention of the agency by way of an email from a former Beam employee. The DOJ also noted the parallel enforcement action brought in 2018 by the SEC but the DOJ did not credit any portion of the penalty paid to the SEC because Beam did not seek to coordinate a parallel resolution with the department.
In a related administrative proceeding settled on July 2, 2018, the SEC issued a cease and desist order against Beam. Under the terms of the settlement, the SEC ordered Beam to cease and desist violations of the books and records and internal controls provisions of the FCPA and ordered the company to pay over $8.1 million in disgorgement, interest, and monetary penalties. The SEC noted Beam's voluntary disclosure of the misconduct as well as the company's cooperation and remedial efforts.
