## Facts

- Beam Suntory Inc. (Beam) was a large alcoholic-beverage company with a wholly owned subsidiary in India (Beam India).
- The alcoholic-beverage business in India was heavily regulated, and companies often needed government approvals for product licensing, label registrations, and distribution-related permissions.
- The United States alleged that, to obtain regulatory advantages and facilitate distribution and sales, Beam India made routine improper payments to Indian government officials.
- According to the government, Beam India used third parties to pass funds to officials, and those funds were supplied by Beam through false or inflated invoices that disguised the payments.
- The government alleged bribes to foreign officials totaling more than one million Indian rupees.
- The government also alleged that Beam failed to implement and maintain adequate internal accounting controls, which limited its ability to monitor and enforce anti-corruption requirements.
- Before acquiring Beam India, Beam allegedly did not conduct reasonable due diligence that would have detected the corruption risks and control weaknesses.
- In or around November 2010, a global accounting firm conducted a compliance review of Beam India, reported a significant probability of wrongdoing, and recommended additional review and control work; Beam did not take steps in response.
- In January 2011, Beam consulted a U.S. law firm, which recommended follow-up on the accounting firm’s work; Beam did not follow through.
- In February 2011, Beam consulted an Indian law firm to expand the compliance work. The engagement was overseen by a Beam employee with no training or experience in anti-corruption compliance.
- Internal communications reflected concern that the review should not impose a compliance regime viewed as inconsistent with local customer expectations and business practices.
- After interviewing Beam India senior management, the Indian law firm confirmed the need for further diligence and stronger anti-corruption policies. Beam asked the U.S. law firm to review the Indian firm’s report; the U.S. firm largely confirmed the findings. Beam still did not implement measures in response.

## Issues

1. Whether the facts described in the Information and statement of facts supported a charge that Beam participated in a conspiracy to violate the FCPA through corrupt payments to foreign officials made via third parties.
2. Whether routing funds through false or inflated invoices and recording them inaccurately supported allegations tied to the FCPA’s books-and-records and internal-controls requirements.
3. Whether Beam’s repeated failure to act on audit and counsel warnings supported the government’s allegation that Beam lacked adequate internal accounting controls relevant to FCPA compliance.
4. Whether a negotiated deferred prosecution agreement was an appropriate vehicle to resolve the criminal Information, conditioned on payment, cooperation, and compliance reporting.

## Decision

- The United States filed a one-count criminal Information in the Northern District of Illinois charging Beam with conspiracy under 18 U.S.C. § 371, predicated on alleged violations of the FCPA’s anti-bribery provisions and the accounting provisions (books-and-records and internal accounting controls).
- Beam entered into a deferred prosecution agreement (DPA) with the Department of Justice under which the prosecution would be deferred for a three-year term if Beam satisfied the agreement’s requirements.
- Beam agreed to a criminal monetary penalty of $19,572,885 and to ongoing obligations that included cooperation and periodic reporting about its anti-corruption compliance program during the DPA term.
- The DPA and accompanying statement of facts set out the alleged India-related improper-payment scheme, the use of third parties and inaccurate invoicing to conceal payments, and Beam’s failure to act after multiple compliance reviews and legal advice warned of likely misconduct.
- The resolution proceeded through the DPA framework rather than litigation of the FCPA allegations in a contested judicial opinion.

## Legal Principles

- A corporation may be charged under 18 U.S.C. § 371 with conspiracy to commit FCPA offenses when the government alleges an agreement to make corrupt payments to foreign officials and overt acts in furtherance of that agreement.
- Payments routed through third parties and concealed through false or inflated invoices may support FCPA allegations, including both anti-bribery theories and accounting-based theories tied to inaccurate books-and-records.
- Allegations that a company lacked adequate internal accounting controls may be supported by facts showing repeated red flags and documented warnings from outside reviewers and counsel, coupled with inaction.
- A deferred prosecution agreement can resolve an FCPA-related criminal Information by deferring prosecution for a set term and conditioning dismissal on payment, cooperation, compliance-related obligations, and ongoing reporting, without a merits ruling after trial.

## Conclusion

United States v. Beam Suntory Inc., No. 20 CR 745 (2020) involved DOJ allegations that Beam’s India subsidiary paid bribes to Indian officials through third parties funded by false or inflated invoices, alongside failures in internal accounting controls and pre-acquisition diligence; the case was resolved through a three-year deferred prosecution agreement requiring a $19.6 million penalty, cooperation, and compliance reporting rather than a contested court decision on the FCPA allegations.
