On April 20, 2022, Stericycle Inc., a global medical waste management company based in Illinois, agreed to pay more than $84 million as part of a coordinated foreign bribery resolution that resolved parallel investigations by authorities in the US and Brazil. According to the court documents and the company’s own admissions, the company made hundreds of bribe payments totaling to $10.5 million between 2011 and 2016 in an effort to obtain and retain business in Brazil, Mexico, and Argentina. The DOJ stated that the company earned at least $21.5 million in profits through the scheme. In each of the three jurisdictions, Stericycle reportedly tracked the bribes using spreadsheets that identified the government customers who received bribes and used code words such as “CP” [commission payment] and “alfajores” [a popular cookie] to refer to the bribe payments. The scheme also involved the creation of false and misleading accounting documents and fake transactions with third parties in order to conceal the funds used to pay the bribes. The company had previously disclosed the investigation, and in August 2021 had reported it was in preliminary settlement negotiations.
As part of its settlement with the US Department of Justice, Stericycle entered into a three-year deferred prosecution agreement in which it acknowledged (1) conspiring to violate the anti-bribery provision of the Foreign Corrupt Practices Act and (2) conspiring to violate the FCPA’s books and records provisions. Under the DPA, Stericycle must pay a criminal penalty of $52.2 million, which reflects a 25 percent discount off of the bottom of the applicable Sentencing Guidelines fine range. The company received the discount because, although it did not voluntarily and timely disclose the misconduct, it fully cooperated with the DOJ’s investigation and engaged in “extensive remedial measures.” According to the DOJ, because Stericycle has not yet fully implemented or tested its enhanced compliance program, an independent compliance monitor was imposed for a period of two years, followed by a year of self-reporting to the DOJ. Under the terms of the DPA, the DOJ agreed to apply a $9.3 million credit for any payments made by Stericycle to resolve the investigations by Brazil’s Controladoria-Geral da União (Comptroller) and the Advocacia-Geral de União (Attorney General). The DOJ will apply an additional $8.2 million credit if the company reaches a resolution with a third Brazilian enforcement authority, which was not identified in the DPA.
In a related settlement, Stericycle agreed to pay nearly $28.2 million in disgorgement and prejudgment interest to the Securities and Exchange Commission for FCPA violations related to the bribery scheme. Specifically, the SEC’s cease-and-desist order stated that Stericycle violated the FCPA’s anti-bribery, books and records, and internal controls provisions. The SEC agreed to offset “up to approximately $4.2 million” of the disgorgement with any disgorgement paid to Brazilian authorities.