On February 18, a jury in the U.S. District Court for the Western District of Pennsylvania returned a guilty verdict against, Charles Hobson, a former executive of Corsa Coal Corporation (“Corsa”) for violations of the Foreign Corrupt Practices Act (“FCPA”), wire fraud, and, money laundering.  The convictions arose from an alleged scheme to pay a third-party sales agent approximately $4.8 million in “commissions,” a portion of which were used to bribe government officials in Egypt in connection with obtaining $143 million in contracts with an Egyptian state-owned and state-controlled company, Al Nasr Company for Coke and Chemicals (“Al Nasr”).   The Government presented evidence at trial that the defendant authorized inflated commission payments to the third-party agent, laundered payments through bank accounts in the United States and the United Arab Emirates, and secretly received approximately $200,000 in kickback payments as part of the scheme.  Although the facts of the prosecution are typical of many past FCPA enforcement actions, it helps to shed light on current FCPA enforcement trends since the President issued Executive Order 14209, “Pausing Foreign Corrupt Practices Act Enforcement To Further American Economic and National Security”.  The lessons learned carry important compliance lessons and underscore best practices for all U.S. companies and government contractors.

Key Compliance Takeaways

  • FCPA and Anti-Corruption Compliance Risk Remains:  The trial and conviction of Mr. Hobson affirms that the U.S. Department of Justice (“DOJ”) will continue to enforce the FCPA consistent with the revised factors outlined in DOJ’s June 9, 2025 “Guidelines for Investigations and Enforcement of the Foreign Corrupt Practices Act (FCPA).” This was the third FCPA criminal trial since the issuance of the new guidance which directed DOJ prosecutors to consider specific factors including whether the conduct (1) impeded competition for U.S. companies; (2) negatively impacted U.S. national security including corruption “occur[ing] in sectors like defense, intelligence, or critical infrastructure”, or (3) involved serious individual misconduct including “substantial bribe payments, proven and sophisticated efforts to conceal bribe payments, fraudulent conduct in furtherance of the bribery scheme, and efforts to obstruct justice.”

Based on a consideration of these factors, the DOJ decided to proceed with the prosecution of Mr. Hobson and the defendants in two other recent trials:

  • The September 2025 conviction of Carl Alan Zaglin, a Georgia businessman, for orchestrating hundreds of thousands of dollars in bribes through an intermediary to secure a $10 million contract from the Honduran government for the supply of law enforcement uniforms and supplies.
  • The December 2025 conviction of Ramon Alexandro Rovirosa Martinez, a Texas businessman, for a scheme to pay $150,000 in bribes to employee of a Mexican state-owned oil company and its subsidiary to obtain and retain contracts worth approximately $2.5 million.

In contrast, the DOJ and U.S. Securities and Exchange Commission dismissed actions with prejudice against two executives of a public company who allegedly authorized a $2 million payment to one or more government officials for the issuance of a construction permit necessary to complete the development of the company’s own office campus in India.  This suggests a trend of the U.S. Government focusing its enforcement efforts on conduct that disadvantages U.S. businesses—particularly in procurement opportunities—and involves substantial evidence of corrupt intent by specific individuals.

  • FCPA and Anti-Corruption Compliance Risk Will Outlive this Administration: Even where conduct may not meet this Administration’s current FCPA priorities, the statute of limitations for substantive FCPA violations is five years while the period for a violation of the statute’s “books and records” provisions is six years.  Accordingly, unlawful conduct occurring today in violation of the statute may still be subject to criminal or civil enforcement under a future Administration with different enforcement priorities.  Moreover, outside of the FCPA and its focus on bribery of foreign government officials, the DOJ continues to have other statutes at its disposal to target foreign corruption—including purely commercial bribery—such as the U.S. Travel Act, 18 U.S.C. § 1952, wire fraud, and anti-money laundering statutes.

In light of this, adhering to best practices for compliance can lower risk related to the FCPA and related anti-corruption statutes, including:

  • Monitoring Third Party Relationships: Partnering with third parties in a foreign jurisdiction is a common practice for government contractors particularly in the defense sector. Critically, due diligence obligations on third parties do not end, and the compliance risk does not dissipate, after the agent is onboarded.  Companies are expected to implement risk-based processes for managing third parties and cannot be “willfully blind” to warning signs such as commission payments disproportionate to the services rendered and payments flowing to undisclosed third parties to off-shore accounts. Where “red flags” are present companies should investigate promptly and be prepared to suspend or terminate the third-party relationship.
  • Managing High-Risk Relationships with State Owned Entities: Government contractors who work with foreign governments or state-owned enterprises face heightened risks and should devote their limited compliance resources accordingly.
  • Understanding that DOJ Retains Substantial Discretion to Enforce FCPA: While the Hobson case was the just third FCPA trial of the new Administration, there have only been approximately twenty-six FCPA trials in total since the enactment of the statute in 1977. Thus, more than 10 percent of all FCPA trials ever have occurred in just the last six months. But rather than signaling any increase in FCPA enforcement generally, it simply reflects a trend that started under the prior Administration of prioritizing individual accountability. The practical import of so few trials over the last five decades is that there is still relatively little case law interpreting the statute which continues to provide DOJ with broad discretion in how it interprets its contours.
  • Mitigating Corporate Liability Through Self-Disclosure, Cooperation, and Remediation: In contrast to Mr. Hobson, who faces the prospect of a substantial prison sentence, his employer, Corsa, obtained a declination of criminal prosecution in March 2023 and agreed to pay $1.2 million in disgorgement of unlawful profits.  According to the declination letter, Corsa’s more favorable resolution was a product of (1) an effective internal investigation in response to evidence of employee misconduct; (2) timely voluntary disclosure; and (3) robust remediation.
  • Establishing and Maintaining an Effective Compliance Program: Ultimately, the best way to avoid an FCPA or anti-corruption violation and/or mitigate legal exposure if a violation occurs is an effective compliance program. The best compliance programs are risk-based and integrate compliance resources strategically into the business itself without excessive burden or disruption. It is equally critical front line employees—not just senior leadership—have a full appreciation of these risks and procedures through regular role-based training.

FCPA prosecutions will pose a continuing risk to government contractors, especially where contractor’s work impacts national security. Fluet’s Litigation + Investigations and Government Contracts Practices are actively monitoring the Government’s enforcement efforts and stand ready to provide timely, strategic, and actionable compliance advice and defense.