DOJ Offers Declination With Disgorgement in US Biomed Company's FCPA Case
The U.S. declined to prosecute Minnesota-based Lifecore Biomedical’s alleged violations of the Foreign Corrupt Practices Act after the medical device company voluntarily disclosed the violations and cooperated with the government’s investigation, DOJ said in a Nov. 16 declination letter.
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The agency said it offered the declination “despite the bribery committed” by employees of the company and its former U.S. subsidiary Yucatan Foods, who paid $14,000 in bribes to at least one Mexican government official to secure a wastewater discharge permit. They also paid a third-party service provider about $310,000 to “prepare fraudulent manifests purporting to show the provider had delivered wastewater to a municipal water company for disposal,” DOJ said, and knew a portion of the fee was used to bribe local Mexican government officials “to sign the manifests to help make them appear legitimate.”
DOJ said Lifecore took several steps to qualify for a declination under the agency’s Corporate Enforcement and Voluntary Self-Disclosure Policy, including a voluntary self-disclosure of the violations within three months of discovering the violation and within hours after an internal investigation “confirmed” the misconduct. Lifecore also cooperated with DOJ, fired the Yucatan officer involved in the bribe, “substantially” improved its compliance program and internal controls, and agreed to “disgorge the costs it avoided having to pay as a result of the bribery scheme.” That included disgorging $406,505 worth of duties it owed Mexican authorities.
The letter follows recent changes to DOJ’s policies for assessing corporate compliance programs, including one that allows companies with “aggravating” factors to qualify for a declination if they provide DOJ with “extraordinary” cooperation (see 2301190031 and 2306020042).