Stericycle, headquartered in Illinois, ran an international waste management network, focused primarily on medical, industrial, and maritime waste as well as document destruction. Stericycle's securities were registered with the SEC and publicly traded on the NASDAQ under the ticker “SRCL.” Stericycle’s Latin America division (“Stericycle LATAM”) was responsible for overseeing the operations of Stericycle’s subsidiaries in Mexico, Brazil, Argentina, Chile, and Puerto Rico.
Medam S.A. de C.V., together with other affiliated entities (collectively, “Stericycle Mexico”), was a wholly owned subsidiary of Stericycle and headquartered in Mexico City, Mexico. Stericycle Mexico was under the direction and control of Stericycle LATAM, and its books, records, and accounts were consolidated into the financial statements of Stericycle.
Stericycle Gestao Ambiental Ltda., together with other affiliated entities (collectively, “Stericycle Brazil”), was a wholly owned subsidiary of Stericycle and headquartered in Recife, Brazil. Stericycle Brazil was under the direction and control of Stericycle LATAM, and its books, records, and accounts were consolidated into the financial statements of Stericycle.
Habitat Ecologico S.A., together with other affiliated entities (collectively, “Stericycle Argentina”), was a wholly owned subsidiary of Stericycle and headquartered in Buenos Aires, Argentina. Stericycle Argentina was under the direction and control of Stericycle LATAM, and its books, records, and accounts were consolidated into the financial statements of Stericycle.
According to the documents in this case, from at least 2012 to 2016, Stericycle paid millions of dollars in the form of hundreds of bribe payments to obtain and maintain business from government customers in Brazil, Mexico, and Argentina, as well as to obtain authorization for priority release of payments owed under government contracts. The improper payments were not accurately reflected in Stericycle’s books and records, and Stericycle failed to have sufficient internal accounting controls in place to detect or prevent the misconduct. In all, Stericycle earned profits of approximately $22.2 million based on the scheme.
In a settled administrative proceeding initiated on April 20, 2022, the SEC ordered Stericycle to cease and desist violations of the antibribery, books and records, and internal controls provisions of the FCPA. Under the terms of the settlement, Stericycle agreed to pay disgorgement of $22,184,981 plus prejudgment interest of $5,999,258.80 and to retain an independent compliance monitor for a term of two years. The SEC agreed to offset up to $4,196,719 of the disgorgement for disgorgement paid to Brazilian authorities in concurrent enforcement actions. The SEC noted Stericycle's cooperation and remediation.
In a related proceeding, the DOJ filed a two count information on April 14, 2022, in the Southern District of Florida against Stericycle alleging conspiracies to violate the antibribery and books and records provisions of the FCPA. On April 18, the company entered into a deferred prosecution agreement with the DOJ. Under the terms of the settlement, Stericycle accepted responsibility for the misconduct, agreed to pay a fine of $52.5 million, and agreed to further implement enhanced anticorruption compliance policies and controls, which included the imposition of an independent compliance monitor for a term of two years. The DOJ agreed to offset up to $17.5 million of the total criminal penalty for fines paid in concurrent Brazilian enforcement actions. In entering a DPA with the company, the DOJ noted Stericycle's thorough cooperation and remediation, but the company received no credit for voluntarily disclosing the misconduct.
