Russia Sanctions Open Door to Whistleblowers

Many firms that previously profited off of trade with Russia may be tempted to violate the newly-imposed U.S. sanctions arising out of opposition to the Russian annexation of the Crimea.  Whistleblowers with knowledge of those violations can expose the fraud and earn a whistleblower reward for doing so.

The Foreign Corrupt Practices Act, which outlaws bribes of foreign officials by domestic and overseas employees of corporations, also prohibits violating sanctions, and rewards those who report it.

To see how this might play out, one can look at previous disputes between the United States and other nations.  In 2012, for example, the Wall Street Journal reported that an anonymous tipster called out technology giant NCR Corporation for allegedly violating U.S. sanctions against Syria. “If the SEC gets involved and finds wrongdoing after a whistleblower complaint, a tipster stands to gain as much as 30% of any monetary sanction the agency recovers,” reported the Journal.

And how might this add up?  In 2013 the SEC slapped a $252 million fine on Weatherford Services, Ltd., $100 million of which was for its alleged trade sanctions violations, reports Steptoe & Johnson, LLP.

Russia Calling

When most people think of Russian trade, aside from Russian oil and gas exports to countries other than the U.S., they draw a blank.  But the U.S., especially Illinois and Texas, have extensive exposure to the Russian economy.

Joe Cahill of Crain’s Chicago Business reports that Illinois-based Boeing, Abbott Laboratories, Caterpillar, Deere and McDonald’s all have “strong ties and high hopes in Russia.”  Two years ago Caterpillar CEO Douglas Oberhelman said he saw a “tremendous opportunity to increase U.S. exports to Russia” in testimony to Congress, and that Russia “ranks among our top 10 export destinations” with 2 billion in export sales over the previous five years,” wrote Cahill.

Cahill also cites the Business Roundtable in noting that “Illinois exports to Russia totaled $717 million in 2011, second only to Texas.”

U.S. trade sanctions against Russia might tempt corporate managers to cut corners on their legal obligations to comply with U.S. foreign policy.  If so, their alleged malfeasance could prove lucrative to employees willing to blow the whistle on the fraud.

Loevy & Loevy’s experienced whistleblower attorneys can help you determine if you have a whistleblower claim and secure a whistleblower award for exposing fraud.


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