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Pharmaceuticals /Medical Devices /Health
Lake Forest, Illinois, United States
Nationality of Foreign Officials: Argentina, Brazil, Mexico
Summary of Allegations:
The SEC and DOJ are reportedly investigating Stericycle's compliance with the Foreign Corrupt Practices Act and other anticorruption laws with respect to the Company’s operations in Latin America.
Mauricio Gomez Baez, an employee of Stericycle who worked as the Senior Vice President of Stericycle LATAM allegedly paid approximately US$10.5 million in bribes to Mexican, Brazilian, and Argentinian officials between 2011 and 2016 to obtain government contracts for medical waste collection for Stericycle.
Abraham Cigarroa Cervantes, a former finance director of the Latin America division of Stericycle, Inc. allegedly caused hundreds of bribes to be paid to government officials in Brazil, Mexico, and Argentina. Cervantes and his co-conspirators allegedly tracked bribe payments through spreadsheets, and described the bribes through code words and euphemisms. False books, records, and accounts that did not accurately and fairly reflect transactions and dispositions of Stericycle's assets were used to conceal the corrupt payments. Cigarroa allegedly submitted and maintained falsified Sarbanes-Oxley certifications and business unit representation letters falsely attesting that the books, records, and accounts were accurate.
Approximate Alleged Payments to Foreign Officials: US$10.5 million
Business Advantage Allegedly Obtained: government contracts for medical waste collection
Agencies: United States: Department of Justice, United States: Securities and Exchange Commission
Results: Compliance Monitor, Criminal Penalty, Deferred Prosecution Agreement
Year Resolved: 2022
Compliance Monitor:
Ongoing: No
Details:
On August 11, 2017, Stericycle revealed it had received a subpoena from the SEC “relating to the Company’s compliance with the Foreign Corrupt Practices Act ('FCPA') or other foreign or domestic anti-corruption laws with respect to… the Company’s operations in Latin America” and that “[t]he Department of Justice has notified the Company that it is investigating this matter in parallel with the SEC.”
On 25 February 2022, Stericycle disclosed that is currently working on an agreement with the DOJ and SEC. The company said it would pay nearly $81 million in total to the DOJ and the SEC to resolve FCPA probes. The agreement is still subject to final approval by the company's board, as well as the DOJ and the SEC.
On 18 April 2022, Stericycle entered into a three-year deferred prosecution agreement with the DOJ in connection with the company's criminal charges of conspiracy to violate the anti-bribery provision of the FCPA, as well as the books and records provisions. The DOJ set a criminal penalty of $52.5 million, the department has agreed to credit up to one-third of the criminal penalty against fines the company pays to authorities in Brazil in related proceedings. The company has also agreed to pay approximately $28 million to resolve a parallel investigation by the U.S. Securities and Exchange Commission (SEC) and will engage an independent compliance monitor for two years.
Agencies: United States: Department of Justice
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
On 9 February, 2024, the DOJ filed a single count information against Baez alleging a conspiracy to violate the antibribery provisions of the FCPA. A superseding information was filed on 13 February, 2024, and a plea hearing is scheduled for 27 February, 2024.
Agencies: United States: Department of Justice
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
On 19 March, 2024, the DOJ announced that a federal grand jury in the Southern District of Florida returned an indictment charging Abraham Cigarroa Cervantes, a former finance director of Stericycle Inc., for his role in an alleged bribery scheme. Cervantes is charged with one count of conspiracy to violate the FCPA anti-bribery provisions and one count of conspiracy to violate the FCPA's books and records provisions.