Beginning in about 1998 and going to about 2009, Archer Daniels Midland Company ("ADM"), a corporation organized under the laws of Delaware and headquartered in Illinois, had several subsidiaries that were engaged in a variety of practices that violated the FCPA in Ukraine and Venezuela.
Between 2002 and 2008 in Ukraine, ADM's subsidiaries (Alfred C. Toepfer, International G.m.b.H. in Germany and Alfred C. Toepfer, International (Ukraine) Ltd. in Ukraine) paid approximately $22 million in bribes through intermediaries to secure the release of value-added tax (VAT) refunds of approximately $100 million. The payments were then concealed by improperly recording the transactions in accounting records as insurance premiums and other purported business expenses. ADM had insufficient anti-bribery compliance controls and made approximately $33 million in illegal profits as a result of the bribery by its subsidiaries.
In Venezuela between approximately 1998 and 2009, ADM's subsidiaries (ADM Latin America and ADM de Venezuela Compania Anomina) engaged in a scheme to provide kickbacks to various customers of the subsidiaries. ADM Latin America and ADM Venezuela woud sell commodities to customers at an inflated price. Then the amount of overpayment was funneled back to bank accounst of employees of the customers.
The misconduct went unchecked by ADM for several years because of its deficient and decentralized system of FCPA oversight over its subsidiaries. However, a subsequent internal investigation by ADM revealed the scheme, and ADM self-reported the results of the investigation to the SEC and DOJ.
On December 20, 2013, ADM entered into a Non-Prosecution Agreement with the DOJ related to violations of the internal controls provisions of the FCPA. The NPA was based on the following factors: (a) the Company's timely, voluntary, and thorough disclosure of the conduct; (b) the Company's extensive cooperation with the Department, including conducting a world-wide risk assessment and corresponding global internal investigation, expanding the scope of the investigation where necessary to ensure the review was effective and thorough, making numerous presentations to the Department on the status findings of the internal investigation, voluntarily making current and former employees available for interviews, voluntarily producing documents to the Department, and compiling relevant documents by category for the Department; (c) the Company's early and extensive remedial efforts already undertaken at its own volition, and the agreement to undertake further enhancements to its compliance program; and (d) the Company's agreement to provide annual, written reports to the Department on its progress and experience in monitoring and enhancing its compliance policies and procedures. ADM agreed to pay a monetary penalty of $9,450,000, however, any criminal penalties imposed by the Court on Alfred C. Toepfer, International (Ukraine) Ltd. in connection with its guilty plea and plea agreement will be deducted from the $9,450,000 penalty.
In a related action, Alfred C. Toepfer, International (Ukraine) Ltd. entered into a plea agreement with the DOJ. Under the terms of the agreement, Alfred C. Toepfer, International (Ukraine) Ltd. pleaded guilty to the conspiracy charge and agreed to pay a monetary fine of $17,771,613 plus a mandatory assessment of $400. This fine represented an approximately 30% reduction from the bottom of the guidelines sentencing range, which the DOJ agreed was appropriate due to ACTI Ukraine's "(1) the Defendant's timely, voluntary, and thorough disclosure of the conduct; (b) the Defendant's extensive cooperation with the Department; and (c) the Defendant's early, extensive, and unsolicited remedial efforts already undertaken and those still to be undertaken."
