FCPA Defense Lawyer

An investigation under the Foreign Corrupt Practices Act usually begins inside a company rather than with a knock at the door. A routine audit flags an unusual consulting payment, a departing employee raises a concern, a due diligence review before an acquisition finds something in a subsidiary’s records, or a foreign authority opens its own inquiry and the information travels. From there the matter can widen quickly, because these cases turn on documents that already exist and on witnesses spread across several countries. Individuals inside the company often learn that they are personally exposed only after the company has already retained its own counsel, whose client is the company. Charges under 15 U.S.C. § 78dd-1 reach issuers and the people who act for them, and they usually arrive alongside a civil enforcement matter. Law Offices Of SRIS, P.C. defends federal white collar matters, including individuals drawn into corporate investigations. Call (888) 437-7747 to request a consultation.

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What 15 U.S.C. § 78dd-1 Prohibits

15 U.S.C. § 78dd-1 makes it unlawful for an issuer, or for a person acting on the issuer’s behalf, to use the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, a payment, a promise to pay, or an authorization of the payment of money or of anything of value to a foreign official, to a foreign political party or an official of one, or to a candidate for foreign political office. The purpose element completes the prohibition: the payment must be intended to influence an official act or decision, to induce an act or omission in violation of a lawful duty, to secure an improper advantage, or to induce the recipient to use influence with a foreign government, in order to assist in obtaining or retaining business or in directing business to any person.

Two points about that structure matter in practice. The provision reaches offers and promises, so no money needs to change hands for the conduct to be complete. And “anything of value” is not limited to cash: travel and entertainment beyond what a business purpose supports, employment or internships for a relative of an official, gifts, and charitable contributions directed by an official have all been treated as things of value. The word doing the most work is “corruptly”, which requires a wrongful intent to influence the recipient in the recipient’s official capacity.

Who the Provision Reaches

Section 78dd-1 is the issuer provision. It applies to companies with a class of securities registered under the federal securities laws or otherwise required to file reports, and it applies to the officers, directors, employees, and agents of such an issuer, as well as to stockholders acting on the issuer’s behalf. That scope is worth stating precisely, because people often assume the Act reaches any American company anywhere. Other provisions of the same statutory scheme reach domestic concerns and certain persons acting within the United States; this page addresses the issuer provision, which is the one the sheet of authorities for this page identifies.

The practical consequence is that liability runs to individuals as well as to the company. A manager who approved a payment, a finance employee who processed it, a sales lead who arranged it through a third party, and a director who authorized a structure can each face personal exposure even where the company resolves its own matter. Individual exposure is also the reason a person interviewed in a corporate internal investigation should obtain separate advice before the interview rather than after it.

Third Parties, Agents, and the Knowledge Standard

Most FCPA matters involve an intermediary rather than a direct payment. A local agent, distributor, customs broker, consultant, or joint venture partner receives a commission, and part of it moves onward. The statute anticipates this. It reaches a payment to any person where the payer knows that all or a portion of it will be offered or given, directly or indirectly, to a foreign official or to the other covered recipients.

Knowledge is defined broadly in the provision itself. A person acts knowingly with respect to a circumstance where the person is aware that the circumstance exists or is substantially certain to occur, and awareness of a high probability of the circumstance is enough unless the person actually believed it did not exist. That standard is why conscious avoidance is such a common government theory: the argument is not that the defendant knew, but that the defendant saw the warning signs and chose not to look. The defense answers it with what the person actually did, which is where due diligence records, contract terms, audit rights, training, and questions asked and answered become the substance of the case.

The Statutory Exception and the Affirmative Defenses

Section 78dd-1 carries an exception for a facilitating or expediting payment made to secure the performance of a routine governmental action. The category is narrower than most people assume. Routine governmental action refers to ordinary, non-discretionary functions of the kind a clerk performs, and it expressly does not include a decision to award new business or to continue business with a party. A payment to secure a favorable decision falls outside the exception no matter how it is described internally.

The provision also supplies two affirmative defenses. The first applies where the payment was lawful under the written laws and regulations of the foreign official’s country, which is a demanding test because written law rarely authorizes such payments even where local practice tolerates them. The second applies where the payment was a reasonable and bona fide expenditure, such as travel and lodging, directly related to the promotion, demonstration, or explanation of products or services, or to the execution or performance of a contract with a foreign government or agency. Both are affirmative defenses, which means the defendant carries the burden on them, and both depend on documentation created at the time rather than on explanations offered afterward.

Parallel Criminal and Civil Enforcement

An FCPA matter involving an issuer generally proceeds on two tracks. The Department of Justice pursues criminal liability. The Securities and Exchange Commission pursues civil enforcement against issuers and individuals, and a separate set of accounting requirements obliges issuers to keep accurate books and records and to maintain a system of internal accounting controls. Those accounting provisions are frequently the easier case for the government, because they do not require proof of a bribe, only that the records or the controls fell short.

Foreign authorities may be investigating the same conduct at the same time, and information sharing between agencies is routine. For an individual, this means that statements made in one forum can appear in another, that a company’s decision to disclose voluntarily and cooperate can shift the exposure toward individuals, and that the timing of interviews, document productions, and any resolution needs to be managed with all of the proceedings in view.

How Mr. Sris and the Firm’s Of Counsel Attorneys Approach FCPA Matters

The work is documentary and it begins with position. The first questions are whether the client is a subject, a witness, or a custodian of records, what the company has already produced, and whether the client sat for an internal interview before getting separate advice. From there the defense reconstructs the transaction: who engaged the third party, what diligence was performed, what the contract required, what approvals existed, and what the client actually saw.

Northern Virginia companies with international operations, including technology firms and contractors doing business with foreign ministries and state-owned entities, generate exactly the fact patterns these cases turn on. The defense of an individual in that setting means separating the client’s conduct from the company’s, establishing what the client knew rather than what the organization collectively knew, and pressing the corrupt-intent and knowledge elements, which are considerably harder to prove against a person than a paper trail first suggests.

Frequently Asked Questions

Does the FCPA apply to a company that is not publicly traded?

15 U.S.C. § 78dd-1, the provision addressed on this page, is the issuer provision, and it applies to companies with securities registered under the federal securities laws or otherwise required to file reports, together with their officers, directors, employees, agents, and stockholders acting on their behalf. Other provisions of the same statutory scheme address domestic concerns and certain persons acting within the United States. Which provision applies is a threshold question in any matter, and it should be answered before anything else.

Does a payment have to be made for the conduct to be a crime?

No. The provision reaches an offer, a promise to pay, and an authorization of payment as well as a payment itself. That is why emails discussing what might be arranged can matter as much as bank records. It is also why a plan abandoned before any money moved is not automatically outside the statute, and why the intent behind the communication becomes the central issue.

What is a facilitating payment?

It is a payment to expedite or secure a routine governmental action, meaning an ordinary function that an official performs without discretion. The exception is narrow and expressly excludes decisions about awarding new business or continuing existing business. Companies that relied on this exception in the past have often found that the payments they classified this way did not fit it, so the classification an internal policy used is not the answer.

Can a person be liable for a payment made by a local agent?

Yes, where the knowledge standard is satisfied. Awareness of a high probability that part of a commission would be passed to an official can be enough, unless the person actually believed it would not. This is why what the client did about warning signs matters so much: diligence performed, questions asked, contract protections, and audit rights are the record that answers a conscious-avoidance theory.

Is it a defense that the payment was normal practice in that country?

Local custom is not a defense. The statutory defense asks whether the payment was lawful under the written laws and regulations of the foreign official’s country, which is a far higher bar than showing that everyone does it. The other statutory defense covers reasonable and bona fide business expenditures such as travel and lodging directly related to promoting products or performing a contract, and both defenses depend on records made at the time.

Should I sit for the company’s internal investigation interview?

Get separate advice first. Counsel conducting an internal investigation represents the company, not the employee, and what an employee says can be given to the government. Fee advancement, indemnification, and the employee’s own exposure all need to be understood before the interview. Employees frequently agree to these interviews out of loyalty and only later discover that their answers became the government’s evidence.

What penalties does 15 U.S.C. § 78dd-1 carry?

This page states no maximum term, no fine ceiling, no alternative fine measure, and no limitations period for this provision, because the firm publishes statutory numbers only where a verified source supplies them and none is available here. In practice the advisory Sentencing Guidelines calculation and the statutory sentencing factors determine an individual outcome far more than the ceiling does. Ask counsel to confirm the current penalties against the text of the statute.

Working With Law Offices Of SRIS, P.C.

FCPA exposure for an individual is not the same problem as the company’s exposure, and it is frequently made worse by steps taken before separate counsel is involved. Law Offices Of SRIS, P.C. defends federal white collar matters, including individuals drawn into corporate investigations, and works the knowledge and corrupt-intent elements that are hardest for the government to prove against a person.

Mr. Sris, Owner and Founder of Law Offices Of SRIS, P.C., is a former prosecutor and is admitted in Virginia, Maryland, the District of Columbia, New Jersey, and New York. The firm has been practicing since 1997. Mr. Sris and the firm’s Of Counsel attorneys handle criminal defense matters across those jurisdictions, which matters in federal practice because a single investigation frequently reaches conduct, witnesses, and records in more than one state. Mr. Sris brings a background in accounting and information systems from George Mason University, applied to complex financial and technology-related cases.

The firm serves Northern Virginia from 1655 Fort Myer Dr, Suite 700, Room 719, Arlington, VA 22209 and central Virginia from 7400 Beaufont Springs Drive, Suite 300, Room 395, Richmond, VA 23225. By appointment. Call (888) 437-7747 to schedule. Request a consultation. Reach our location at (888) 437-7747.

This page provides general information about federal FCPA matters under 15 U.S.C. § 78dd-1 and does not create an attorney-client relationship. Case results depend on a variety of factors unique to each case. Results may vary.

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A FCPA case is one part of public corruption & bribery work, and our page on bribery of a public official defence covers the wider process.