Common Actions for Bribery and Corruption

Legal Elements of Bribery and Corruption

▪ This section addresses: • Legal avenues for recovery • Common actions for bribery and corruption • Legal elements of a cause of action • Corruption offenses in several countries • Ensuring that proceeds, property, and assets are retained to satisfy a judgment • Jurisdiction • Employee rights during fraud investigations • Privacy issues

▪ Civil action: • Evaluating the potential for recovery • Types of civil remedies ▪ Criminal actions: • Offenses of a public nature • Brought by the government

▪ Corruption: • Bribery • Conflict of interest • Breach of contract • Economic extortion • Breach of fiduciary duty

▪ Laundering, acquisition, possession, or use of illegal proceeds: • Money laundering • Structuring violations • Engaging in monetary transactions using property derived from unlawful activities

▪ Misrepresentation fraud ▪ Misappropriation or diversion of funds or property: • Conversion • Larceny • Embezzlement • Misappropriation

▪ Facilitating crimes: • Collusion • Smuggling • Forgery • Conspiracy • Falsifying documents • Aiding or abetting • Accounting crimes crimes • Tax fraud (tax evasion) • Obstruction of justice

▪ A cause of action is established by proving all of the elements of the underlying claim. ▪ The elements of any legal offense specify what must be shown to prove the claim. ▪ Examiner must be able to match the facts and circumstances of a specific loss to one or more legal causes of action.

▪ Increased legislation criminalizing the bribery of foreign (not just domestic) officials ▪ Introduction of corporate liability for bribery offenses ▪ Increased sanctions and penalties, in addition to fines and imprisonment ▪ Extraterritoriality ▪ Extension of legislation to cover agents and intermediaries

▪ Many countries have laws that specifically address corruption. ▪ The following are just a few examples.

▪ Anti-Kickback Act of 1986 ▪ Racketeer ▪ Sherman Antitrust Act Influenced and ▪ Bribery of public officials Corrupt Organizations Act ▪ Bank bribery ▪ Foreign Corrupt ▪ Conflicts of interest Practices Act ▪ Mail fraud and wire fraud ▪ State criminal anti- ▪ Federal statutes relating corruption statutes to false claims and statements

▪ The UK Bribery Act creates three categories of offenses: • General commercial bribery offenses • Bribing a foreign public official • A corporate offense of failure to prevent bribery

▪ Prevention of Bribery Ordinance, Chapter 201 of the Laws of Hong Kong, identifies the following as offenses: • Soliciting or accepting any “advantage” by a prescribed officer (government officials) • Offering any “advantage” to a public servant (government officials and other employees of public bodies)

▪ Law No. 31 of 1999, Eradication of the Criminal Act of Corruption, as amended by Law No. 20/2001, criminalizes active and passive bribery in the public sector.

▪ Procedures that preserve and protect the victim’s ability to recover vary by case and by jurisdiction. ▪ Some examples include: • Prejudgment attachment • Prejudgment writ of possession (replevin) • Notice of lis pendens • Temporary restraining orders and preliminary injunctions

▪ Jurisdiction is the power of a court to hear, decide, and enforce legal matters. ▪ Jurisdiction is the subject matter or persons over which lawful authority may be exercised by a court. ▪ To hear and decide a case, a court must have jurisdiction over the parties and subject matter involved and proper venue.

▪ Determining the proper court requires a three-part test: • Does the court hear cases of the type in question? • Does the court have the authority to exercise its power over a particular defendant or piece of property? • Does the claim arise within the court’s venue?

▪ Employees have certain rights during fraud examinations, and examiners must be aware of such rights. ▪ Before beginning any fraud examination, it is important for the fraud examiner to determine the employee’s rights.

▪ Fraud examiners must ensure that the rights of individuals are protected during an investigation. ▪ Organizations must be thoroughly knowledgeable about the rights that are available to their employees.