A Barcelona-based media firm entered into a non-prosecution agreement with the DOJ related to the alleged bribery of Caribbean Football Union ("CFU") World Cup officials and related soccer federations. Concurrently, the U.S.-based subsidiary of the media firm pleaded guilty to criminal charges relating to the bribery of CFU officials. The plea by the U.S. subsidiary follows individual guilty pleas by former executives of the U.S. subsidiary. These actions are part of an investigation led by the U.S. Attorney's Office for the Eastern District of New York, the New York Field Office of the FBI, and the Los Angeles Field Office of the IRS into corruption in international soccer.
According to the Plea Agreement with the U.S. subsidiary, senior executives of US Imagina, LLC paid more than $6.5 million in bribes to high-ranking CFU soccer officials and several soccer federations to gain media and marketing rights to the federations' World Cup qualifier matches. In May 2015, an indictment was unsealed that alleged several executives were participating in the CFU World Cup bribery scheme. For several months after the indictment was unsealed, Barcelona-based parent company Imagina Media Audiovisual SL ("Imagina Media") allegedly failed to conduct an internal investigation into the matter. Only after a superseding indictment and the guilty pleas of two former executives did the parent company Imagina Media retain counsel to conduct an internal investigation.
Pursuant to the non-prosecution agreement, Imagina Media (i) admitted to and accepted responsibility for the alleged conduct, (ii) promised to continue cooperating with the investigation into corruption in international soccer, and (iii) agreed to implement internal controls and a corporate compliance program to detect and deter violations of applicable anti-corruption laws. According to the non-prosecution agreement, Imagina Media did not receive full cooperation credit, because (i) the company did not voluntarily disclose the misconduct, (ii) its cooperation was "reactive, instead of proactive" and (ii) it delayed in investigating the initial allegations. In addition, Imagina Media agreed to pay a criminal penalty of $12,883,320 that was imposed upon its subsidiary in the criminal case.
Commentary / Jodi Avergun
Hewing closely to the FCPA Enforcement Policy guidelines, the declination letter demonstrates with mathematical precision the value of voluntary disclosure, full cooperation and timely remediation. Where the Policy allows a discount of up to 50% of the bottom of the range of the sentencing guidelines for companies that fully cooperate, remediate and voluntarily disclose, here, Imagina received only a 10% discount from that range. The lack of voluntary self-disclosure is the obvious reason for the relatively small discount from the sentencing fine range, reminding companies once again that the DOJ will reward voluntary self-reporting with steeper discounts from the sentencing guidelines, and companies that choose not to self-report will not be so-rewarded. Here, the decision not to disclose cost the company approximately $3.58 million in non-tax-deductible fines—a not insignificant sum—while full cooperation and more timely remediation could have netted the company an additional $2.15 million reduction.
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