Marubeni: FCPA Repeat Offender

by Michael Volkov

marubeniIn this era of aggressive FCPA enforcement, there are critics who have suggested that the Department of Justice should concentrate its prosecutions on individuals rather than imposing ever-increasing criminal fines on corporations. These critics claim that individual criminal prosecutions are the most effective means to deter criminal conduct.

The Justice Department’s prosecution of Marubeni Corporation, a Japanese company, for two separate FCPA bribery schemes provides an interesting case study on DOJ’s FCPA prosecution program. To date, no Marubeni individuals have been prosecuted in either case; however, several individuals from other companies have been prosecuted.

In the first case, filed on January 17, 2012, Marubeni agreed to a deferred prosecution agreement (DPA) under which Marubeni agreed to pay a criminal fine of $54.6 million for its role in the Bonny Island Project in Nigeria. For those of you new to the FCPA scene, the Bonny Island Project is one of the most notorious bribery schemes that has been prosecuted, resulting in the prosecution of member companies of the Bonny Island  joint venture and several individuals, including the infamous Jeffrey Tesler and Albert (“Jack”) Stanley.

The Bonny Island bribery scheme involved nearly $200 million in bribes paid to Nigerian National Petroleum Company officials during 1995 to 2004 to secure a series of six lucrative contracts involving Liquified Natural Gas facilities totaling nearly $6 billion.

Marubeni played a central role in the scheme funneling nearly $51 million in bribes to “lower level” Nigerian government officials, while Jeffrey Tesler’s company was responsible for paying bribes to higher level NNPC officials. Under the plea agreement, Marubeni faced a criminal fine range of $54.6 to $109.2 million. The government agreed to a fine of $54.6 million, the bottom of the guideline range, citing Marubeni’s agreement to undertake remedial measures and its agreement to cooperate (in the future).  As part of its remedial measures, Marubeni represented that it had implemented and will implement a compliance program meeting the elements set forth in the plea agreement.marubeni3

A little more than two years later, on March 19, 2014, the Justice Department announced a second FCPA settlement with Marubeni. This agreement, which is connected to the ongoing investigation of Alstom, related to Marubeni’s participation in bribery in securing a power project in Indonesia.  Interestingly, the Alstom investigation involves the ongoing prosecution of several individuals from Alstom, and the Indonesia power project is one of numerous incidents under investigation involving Alstom.

The facts of this case involve a consortium of major power companies, including Marubeni and Alstom, and two consultants who were hired to pay bribes to Indonesia government officials. Consultant A was retained to funnel bribes but was unsuccessful in securing guarantees for a $118 million project from the Indonesia state-owned electric company. Consultant B was retained to increase the bribes paid.  Several million dollars were paid in bribes and the power contract was secured.

This time Marubeni faced a different Department of Justice. The guideline fine range was $63.7 million to $127.4 million. Marubeni was forced to plead guilty to eight separate counts of FCPA criminal violations, one conspiracy count and seven separate substantive FCPA violations.

The guideline fine range was $63.7 to $127.4 million. The government and Marubeni agreed to an amount in the middle of the range — $88 million. DOJ specific ally cited the following reasons for the fine amount: (1) the nature and seriousness of the offense; (2) [Marubeni’s] failure to voluntarily disclose the conduct; (3) [Marubeni’s] refusal to cooperate with the Department’s investigation when given the opportunity to do so; (4) the lack of an effective compliance and ethics program at the time of the offense; (5) [Marubeni’s] failure to properly remediate; and (6) [Marubeni’s] history of prior criminal misconduct.

marubeni5Marubeni participated actively in two notorious bribery schemes. So far, no individuals from Marubeni have plead guilty or been charged with any violations arising from these two notorious bribery schemes. I suspect there is a lot more to the story but, at this time, Marubeni’s treatment can be cited by those who suggest that increased focus on individual prosecutions are needed, while I am sure there are others who would argue that forcing Marubeni to plead guilty to eight separate criminal counts was sufficient punishment to deter future violations.

We shall see who has the better argument in the days or years to come.

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.

© Michael Volkov, The Volkov Law Group | Attorney Advertising

Written by:

Michael Volkov

The Volkov Law Group on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.