Kathleen Hamann Quoted in Law360: Toyota Thai Bribery Probe Marches On, FCPA Deal Likely

Excerpted from the June 7, 2022 edition of Law360

Thailand’s judicial branch continues to investigate claims that Toyota Motor Thailand (TMT) may have bribed Thailand Supreme Court justices “to overturn a judgment in a bid to erase a tax debt of 11 billion baht ($320 million) for allegedly dodging import taxes on Prius car parts.”

In March 2021, Toyota Motor Corp. informed investors that the US Department of Justice and the US Securities and Exchange Commission were investigating “possible anti-bribery” violations in the company’s Thai subsidiary, that could result in civil or criminal penalties. 

A further review sought to determine whether TMT violated the Foreign Corrupt Practices Act (FCPA) or the US Bribery Act, “by making payments to outside law firms or consultants that may have been passed or shared with Thai judges, court advisers, or others in an effort to secure a favorable outcome in the Prius tax case.” A review by Thai officials confirmed an $18 million payment TMT made to a small law firm that “Toyota and US investigators suspect was used as a conduit for judicial bribes.”

By voluntarily disclosing the misconduct and fully cooperating and conducting remediation, Toyota could be eligible for a 50% fine reduction. However, the $18 million payment in “suspected bribe money and the seniority of the alleged bribe recipients could derail such a large reduction.”

Firm white-collar attorney Kathleen Hamann, a former prosecutor in DOJ’s FCPA unit, said, “It’s too serious of an offense,” and that “there are factors in the DOJ policy that can scuttle a company’s chances of reduced fines if the offense is too grave.” Kate added, “You’re talking about a really serious amount of money to a very senior judicial official … the crime was complete when the offer is made.”

When final, the investigation “could either show that the conduct was the work of a few rogue employees, a company behavior, or a global problem. It could also theoretically show no wrongdoing.” Kate added, “Were they evading internal controls? Did they lie to people above them? Or were there a bunch of people who were in on this and it went on for years and years? All of these factors come into play on all the pieces of a resolution.”

The complete article by Frank G. Runyeon can be found in the June 7, 2022 edition of Law360.