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Waste management company hit with $90 million in fines over bribery in South America

By Hugh Fort in Business News, posted April 22, 2022

Stericycle has agreed to pay $84 million to resolve investigations over the bribery of officials in South America.

The firm is an international waste management provider which has been investigated by authorities in the US and Brazil over bribing officials in Brazil, Mexico and Argentina for the past three years.

Court documents show Stericycle, based in Lake Forest, Illinois, entered into a three-year deferred prosecution agreement (DPA) with the Department of Justice.

This is in connection with two counts of conspiracy to violate the anti-bribery provision of the Foreign Corrupt Practices Act (FCPA) and the FCPA’s books and records provision.

Stericycle agreed to pay $52.5 million to the Justice Department and $28.2 million to the SEC.

The company will also pay $9.3 million to the Brazilian authorities to resolve the investigations by the Controladoria-Geral da União (CGU) and the Advocacia-Geral de União (Attorney General’s Office).

It will also pay $28 million to resolve a parallel investigation by the U.S. Securities and Exchange Commission (SEC).

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, said: “Stericycle today accepted responsibility for its corrupt business practices in paying millions of dollars in bribes to foreign officials in multiple countries.

“The company also maintained false books and records to conceal corrupt and improper payments made by its subsidiaries in Brazil, Mexico, and Argentina.

"Today’s resolution demonstrates the Department of Justice’s continuing commitment to combating corruption and protecting the international marketplace.”

Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division added: “Today’s resolution with Stericycle shows that the FBI and our international law enforcement partners will not allow corruption to permeate domestic or international markets.

“The consequences of violating the FCPA are clear: Companies that bribe foreign officials for business advantage will be held accountable.”

What was Stericycle doing?

According to the company's admissions and court documents, Stericycle conspired to pay $10.5 million in bribes to officials in the south American nations to retain business and other advantages for the company.

The company earned at least $21.5 million in profits from the scheme.

The corruption happened between 2011 and 2016 and involved hundreds of bribes made to officials at government agencies and instrumentalities in Brazil, Mexico, and Argentina.

An executive from Stericycle’s Latin America division directed employees in the three countries to pay bribes - usually in cash - calculated as a percentage of the underlying contract payments from government customers.

The officials in the three countries kept track of the bribes using spreadsheets and described the bribes through code words and euphemisms.

As part of its agreement, Stericycle has agreed to cooperate with the Department of Justice over any ongoing and future criminal investigations over the matter.

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The company also failed to voluntarily and timely disclose the conduct which triggered the investigation and the nature, seriousness, and pervasiveness of the offense.

Stericycle has also agreed to pay disgorgement and prejudgment interest totaling approximately $28 million to resolve an investigation by the SEC.

In related proceedings in Brazil, the company has agreed to resolve investigations by the CGU and the Attorney General’s Office.

What does Stericycle say?

Cindy J. Miller, president and chief executive officer at Stericycle said: "Resolving this legacy matter represents another important milestone in Stericycle's business transformation journey.

"Over the past several years, we have focused on fully remediating the issues identified during the investigation. This includes instituting new policies, procedures and internal controls and building a culture of compliance, integrity and accountability that aligns with our core values across our entire global operation."

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