Former Stericycle Finance Director Charged in $10M Foreign Bribery Scheme

A former finance director of Stericycle Inc.'s Latin America division, Abraham Cigarroa Cervantes, has been indicted for his alleged involvement in a complex scheme to funnel over $10 million in bribes to foreign officials across Brazil, Mexico, and Argentina. This indictment sheds light on a multi-year effort to secure business advantages for the international waste management company through illicit means.

According to court documents unveiled by the Department of Justice (DOJ), Cervantes, aged 51 and hailing from Mexico, alongside accomplices, orchestrated a scheme spanning from 2011 to 2016. The alleged modus operandi involved orchestrating numerous bribe payments to government officials in the aforementioned countries, aimed at procuring and retaining business contracts and gaining undue advantages for Stericycle, a U.S.-based company listed on the securities exchange.

The indictment outlines a meticulous process wherein employees at Stericycle's offices in Mexico, Brazil, and Argentina purportedly facilitated bribe payments, predominantly in cash. These payments were reportedly calculated as a percentage of contract payments associated with government clients. To obfuscate the illicit nature of these transactions, Cervantes and co-conspirators purportedly maintained false records and accounts, misrepresenting bribe payments as legitimate business expenses within Stericycle's financial records.

Furthermore, the indictment alleges that Cervantes and his associates employed various methods to conceal the nature of the transactions, including the use of code words and euphemisms, as well as falsified Sarbanes-Oxley certifications and business unit representation letters. These efforts aimed to portray a facade of compliance while perpetuating the illegal activities.

Cervantes now faces serious charges, including one count of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) and one count of conspiracy to violate the FCPA's books and records provisions. If convicted, he could face a maximum penalty of five years in prison for each count.

This development comes on the heels of Stericycle's admission, in April 2022, of engaging in bribery activities in Mexico, Brazil, and Argentina, in violation of the FCPA. The company entered into a deferred prosecution agreement with the DOJ's Fraud Section, agreeing to a resolution that included a substantial financial penalty exceeding $84 million, alongside coordinated efforts with the Securities and Exchange Commission and Brazilian authorities.

The announcement of Cervantes's indictment was made by Principal Deputy Assistant Attorney General Nicole M. Argentieri, U.S. Attorney Markenzy Lapointe for the Southern District of Florida, and Assistant Director in Charge James Smith of the FBI New York Field Office.

This indictment underscores the Justice Department's commitment to combatting corruption and holding individuals and corporations accountable for engaging in illegal conduct, irrespective of their geographic location or corporate stature. As the legal proceedings unfold, the implications of this case are likely to reverberate throughout the international business community, underscoring the imperative of ethical business practices and compliance with anti-corruption laws.

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