Criminal Prosecutions of Individuals Outside the FCPA

Michael Volkov
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When you look outside the FCPA arena and examine DOJ criminal prosecutions in healthcare, antitrust, tax, fraud, and other white-collar areas, there is no shortage of cases against individual violators. I am perplexed, to say the least, why DOJ cannot aggressively prosecute individuals for FCPA crimes in the same manner that prosecutors bring cases against doctors, executives and other individuals for a variety of criminal offenses.

Five Physicians Plead Guilty in New Jersey

In New Jersey, five doctors recently plead guilty to criminal offenses arising from a test-referral scheme with a clinical laboratory. The five doctors admitted taking bribes in a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (“BLS”).

Four doctors plead guilty to one count of accepting bribes in violation of the Travel Act. One doctor plead guilty to 11 counts, including charges of bribery conspiracy, Anti-Kickback violations, Travel Act, honest services wire fraud and money laundering conspiracy.

Two doctors accepted cash payments from BLS totaling $175,000, and expenses for paid strip club trips, including lap dances and sex acts, in exchange for referral of their patients’ blood specimens to BLS, equal to approximately $1.7 million in revenues.

One doctor accepted $200,000 in bribe payments from BLS, in exchange for $1,400,000 in patient referrals to BLS for lab services.

Another doctor accepted monthly bribe payments of $3,200, totaling approximately $104,000 from BLS, in exchange for $1.3 million in patient referrals to BLS for lab services.

The fifth doctor accepted monthly bribe payments of $80,000, in exchange for more than $930,000 in patient referrals to BLS for lab services.

The federal investigation has resulted in 50 convictions – 36 of them doctors – in connection with the bribery scheme, which resulted in more than $100 million in payments to BLS from Medicare and private insurance companies.

For its role in this massive bribery scheme, BLS pleaded guilty and forfeited all of its assets. BLS no longer operates.

Three Senior Executives Charged with Antitrust Offenses

The Justice Department charged three executives from Wallenius Wilhelmsen Logistics, a Norwegian shipping company, for their participation in a conspiracy to rig bids and fix prices on shipping services for international cargo.

DOJ has charged a total of 11 executives in the investigation. Four of the 11 have plead guilty and are facing prison terms at sentencing. Others have not been apprehended.

Last year, in July 2016, Wallenius Wilhelmsen agreed to pay a fine of $98.9 million for its role in a conspiracy to fix prices on ocean shipping services for car and other vehicles. Three other companies in the conspiracy plead guilty and paid $230 million in total.

The three executives charged conspired with their competitors to allocate customers and routes for the shipment of cars, truck, construction equipment and agricultural machinery. The conspiracy was hatched at a golf course in Baltimore, Maryland, where they set prices and agreed not to compete against each other.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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