Schnitzer Steel - Schnitzer Steel Industries Inc. (DOJ)
October 16, 2006
SSI International Far East, Ltd.; Si Chan Wooh
The DOJ stated, in not pursuing its criminal case after the deferred prosecution agreement, that, "when companies voluntarily disclose FCPA violations and cooperate with Justice Department investigations, they will get a real, tangible benefit. In fact, Schnitzer Steel's cooperation in this case was excellent, and I believe that the disposition announced today reflects that fact."
Managers of government-owned and private steel production companies.
Schnitzer Steel Industries, Inc. (Schnitzer Steel) is a publicly traded company with its headquarters in Portland, Oregon. From 1995 to 2006, Schnitzer Steel maintained SSI International, located in Tacoma, WA. SSI International managed SSI International Far East, Ltd. (SSI Korea), another wholly-owned subsidiary of Schnitzer Steel, in Seoul, South Korea. SSI Korea facilitated the sale of scrap metal by Schnitzer Steel from the United States and acted as a broker for the sale of scrap metal by Japanese suppliers to steel producers in China and South Korea.
From 1995 to 2004, SSI Korea made payments to officers and employees (managers) of government-owned and private steel production companies in China and South Korea to induce them to purchase scrap metal. The payments were made to foreign officials primarily in the form of commissions, refunds, and gratuities via off-book foreign bank accounts.
SSI Korea agreed to plead guilty to violating the anti-bribery and accounting provisions of the FCPA and pay a $7.5 million penalty. Schnitzer Steel entered into a three-year deferred prosecution agreement and agreed to maintain a compliance monitor for three years.
Schnitzer Steel entered into a 3-year deferred prosecution agreement with the Department of Justice. Ultimately, Schnitzer was not charged with a crime. SSI International, a wholly-owned subsidiary of Schnitzer Steel Industries, Inc., was subject to $7,500,000 of sanctions.