The 2020 Corporate Rap Sheet
Phil Mattera for the Dirt
Diggers Digest
For all of his populist bluster, Donald Trump has done little during his four years in office to stem the power of big business.
He criticizes corporations only when he feels personally
slighted or when it fits into one of his many outlandish conspiracy theories.
Fortunately, career officials at regulatory agencies and career prosecutors at the Justice Department, as well as those at the state level, have continued doing their jobs.
The following is
a selection of significant cases resolved during 2020.
Opioid market abuses: The Justice Department announced an $8 billion global resolution of its criminal and civil investigations into abuses by Purdue Pharma LP. The company agreed to plead guilty to three felony counts and pay criminal fines and forfeitures of $5.5 billion and $2.8 billion in a civil settlement. Given that the company is going through bankruptcy, it is unclear how much of this will actually be paid.
Bogus bank accounts: As part of the ongoing prosecution of Wells Fargo for
pressuring employees to meet unrealistic sales goal by creating bogus accounts
without customer permission, the Justice Department announced that the bank would pay $3
billion to resolve criminal and civil charges. Wells was allowed to enter into
a deferred prosecution agreement to avoid a guilty plea.
Foreign bribery: Goldman Sachs and its Malaysian subsidiary admitted to conspiring to violate the
Foreign Corrupt Practices Act in connection with a scheme to pay over $1
billion in bribes to Malaysian and Abu Dhabi officials to obtain lucrative
business for Goldman Sachs, including its role in underwriting approximately
$6.5 billion in three bond deals for 1Malaysia Development Bhd. Goldman
Sachs agreed to pay more than $2.9 billion and disgorge $606 million as part of
a coordinated resolution with criminal and civil authorities in the United
States, the United Kingdom, Singapore, and elsewhere.
Emissions cheating: The Department of Justice, the Environmental
Protection Agency, and the California Air Resources Board announced a $1.5 billion settlement
with German automaker Daimler AG and its American subsidiary Mercedes-Benz USA,
LLC resolving alleged violations of the Clean Air Act and California law
associated with emissions cheating.
False claims and kickbacks: Novartis agreed to pay over $642 million in
separate settlements resolving claims that it violated the False Claims
Act. The first settlement pertained to the company’s alleged illegal use
of three foundations as conduits to pay the copayments of Medicare
patients. The second settlement resolved claims arising from the
company’s alleged payments of kickbacks to doctors.
Tax evasion: Bank Hapoalim of Israel agreed to pay a total of more than
$600 million in penalties to resolve criminal allegations by the Justice
Department that it conspired with U.S. taxpayers to hide assets and Income in
offshore accounts. The parent company entered into a deferred prosecution
agreement while its Swiss subsidiary pled guilty.
Illegal robocalls: Dish Network agreed to pay $210 million to resolve
a long-running federal-state lawsuit alleging that the company engaged in
illegal telemarketing through unwanted robocalls to thousands of people on the
Do Not Call registry.
Spoofing: The Commodity Futures Trading Commission and the
Justice Department announced that JPMorgan Chase would
pay $920 million to resolve civil and criminal allegations involving deceptive
conduct that spanned at least eight years and involved hundreds of thousands of
spoof orders in precious metals and U.S. Treasury futures contracts on the
Commodity Exchange, Inc., the New York Mercantile Exchange, and the Chicago
Board of Trade.
Predatory lending: Banco Santander’s U.S. arm agreed to pay $550 million to resolve
multistate litigation alleging that the bank, through its use of proprietary
credit scoring models to forecast default risk, knew that certain consumer
segments were likely to default, yet issued high-interest automobile loans to
them anyway.
Corruption: A criminal investigation of Commonwealth Edison
was resolved with a deferred prosecution
agreement under which ComEd agreed to pay $200 million and admit it arranged
jobs, vendor subcontracts, and monetary payments associated with those jobs and
subcontracts, for various associates of a high-level elected official for the
state of Illinois, to influence and reward the official’s efforts to assist
ComEd with respect to legislation.
Defrauding investors: SCANA Corp. and its subsidiary SCE&G agreed to settle a Securities and
Exchange Commission lawsuit charging them with defrauding investors by making
false and misleading statements about a nuclear plant expansion that was
ultimately abandoned. The company agreed to pay a $25 million penalty and
$112.5 million in disgorgement.
Mortgage abuses: Nationstar Mortgage, which does business as Mr.
Cooper, agreed to pay $86.8 million to resolve
federal and multistate allegations that the mortgage servicer engaged in
unlawful practices in the wake of the 2008 financial crisis. The settlement
addressed alleged misconduct regarding servicing transfers, property
preservation, loan modifications, and other issues, which in some cases led to
improper foreclosure or borrowers being locked out of their homes.
Labor relations violations: CNN agreed to pay $76 million in backpay,
the largest monetary remedy in the history of the National Labor Relations
Board, to resolve a case that originated in 2003 when CNN terminated a contract
with Team Video Services and hired new employees to perform the same work
without recognizing or bargaining with the two unions that had represented the
TVS employees.
Additional details on these cases
can be found in Violation Tracker. Some will appear next
week in an update to the database that will increase the number of its cases to
444,000 and the penalty total to $650 billion.