September 16, 2022

DOJ and SEC enter into FCPA resolutions with Brazil-based airline

On September 15, 2022, GOL Linhas Aéreas Inteligentes SA (GOL), the second-largest Brazilian domestic airline, agreed to pay more than $41 million to resolve bribery investigations by the US Department of Justice (DOJ), US Securities and Exchange Commission (SEC), and Brazilian enforcement authorities.

According to the DOJ and SEC filings, between 2012 and 2013 GOL conspired with others to pay approximately $3.8 million in bribes to Brazilian government officials to secure the passage of two pieces of legislation favorable to GOL (which concerned the reduction of certain payroll and fuel taxes).  To effectuate the scheme, a member of GOL’s Board of Directors caused GOL to enter into fraudulent third-party contracts with, and made payments to, entities connected to Brazilian officials (including an important Brazilian legislator).  GOL’s books and records falsely described these payments as “advertising expenses” and other legitimate expenses.

As a result of this conduct, GOL entered into a three-year deferred prosecution agreement (DPA) with the DOJ to resolve allegations that it had conspired to violate the anti-bribery and books and records provisions of the US Foreign Corrupt Practices Act (FCPA), and agreed to pay a $17 million criminal penalty, to continue to enhance its compliance program, and to provide periodic reports to the DOJ regarding remediation and the implementation of compliance measures for the term of the DPA.  The DOJ had initially sought a penalty of $87 million, which represented a 25% downward departure from the DOJ’s Sentencing Guidelines, and which reflected the DOJ’s findings that GOL (i) did not voluntarily self-disclose its misconduct, (ii) did fully cooperate with the DOJ’s investigation, and (iii) engaged in fulsome remediation (including “redesigning its entire anti-corruption compliance program”).  However, GOL established to the DOJ that it had an inability to pay any penalty greater than $17 million, and as a result the DOJ imposed only the $17 million penalty.  GOL also entered into a resolution with the SEC, pursuant to which GOL agreed to cease and desist from violations of the FCPA’s anti-bribery, books and records, and internal controls provisions, and to pay $24.5 million in disgorgement and prejudgment interest (the SEC order reflects a payment amount of $70 million, but notes that all but $24.5 million was “waived” due to GOL’s inability to pay).  Finally, the DOJ and SEC settlements both reflect that GOL agreed to pay approximately $3.4 million in penalties to Brazilian enforcement authorities in connection with the same conduct.  The DOJ and SEC each credited up to $1.7 million of GOL’s payments to them against GOL’s payment to Brazilian authorities, further reducing GOL’s required DOJ and SEC payments.

DOJ Press Release | Deferred Prosecution Agreement | Criminal Information | SEC Press Release | SEC Order