The Louis Berger Group, Inc., a subsidiary of global engineering and construction company, Berger Group Holdings, Inc., recently brought an action against former executive Richard J. Hirsch who pled guilty to violations of the Foreign Corrupt Practices Act (FCPA) in 2015.
The suit raises breach of fiduciary duty claims against Hirsch stemming from his involvement with the payment of over a half-million dollars in bribes to Vietnamese officials between 1999 and 2004. In 2015, after a four year investigation by the Department of Justice, following a voluntary disclosure by Louis Berger, Hirsh pled guilty to violations of the FCPA and Luis Berger agreed to pay a $17.1 million penalty. Louis Berger now seeks to recoup not only its $17 million penalty and $50,000 in legal fees, but an undisclosed amount for loss of reputation and other injuries to the company.
The stakes continue to rise for individuals who violate the FCPA. Not only has the Department of Justice announced a new focus on individual liability, this recent action demonstrates that executives may be personally liable to the companies who defend them throughout their criminal proceedings. For individuals and companies a like, meaningful FCPA policies which include strong personal educational components remain an absolute necessity as liability continues to increase.