On November 16, 2023, the U.S. Department of Justice (DOJ) issued a letter to Lifecore Biomedical, Inc., formerly known as Landec Corporation, under the agency's Foreign Corrupt Practices Act (FCPA) Corporate Enforcement Policy. This letter was a "declination with disgorgement," [link] indicating that the DOJ decided not to prosecute Lifecore despite identified misconduct.
The situation involved FCPA violations by Lifecore’s former subsidiary, Yucatan Foods. It was found that employees and agents of Yucatan Foods had engaged in bribery, specifically paying bribes to Mexican government officials to secure a wastewater discharge permit.
Despite these findings, the DOJ declined to prosecute Lifecore, acknowledging the company's proactive measures. During Lifecore’s pre-acquisition due diligence of Yucatan and Tanok, at least one Yucatan officer involved in the misconduct (the “Yucatan Officer”) took affirmative steps to conceal the misconduct from Lifecore and its auditor. After Lifecore learned of the misconduct during post- acquisition integration, it initiated an internal investigation that led to the voluntary self-disclosure to the Criminal Division described below.
Lifecore Biomedical had voluntarily self-disclosed the corruption scheme to the DOJ within three months of initiating an internal investigation. The company also quickly took steps to rectify the misconduct. This response and remediation played a crucial role in the DOJ's decision to issue a declination with disgorgement rather than pursuing prosecution [DOJ Letter]