Border Bribes and Cartel Nexus: Compliance Lessons from Scoular’s $10 Million FCPA Resolution

On July 17, 2026, the U.S. Department of Justice (“DOJ”) announced the first Foreign Corrupt Practices Act (“FCPA”) deferred prosecution agreement (“DPA”) of 2026, highlighting DOJ’s heightened focus on cross-border trade with Mexico and transnational criminal organizations (“TCOs”). Specifically, the Scoular Company (“Scoular” or the “Company”), an agricultural supply chain company headquartered in Omaha, Nebraska, agreed to pay more than $10 million to resolve charges that it conspired to violate the FCPA. According to the announcement, from 2013 to 2019, Scoular employees directed Mexican customs brokers to bribe agricultural officials to allow trainloads of corn and other products to cross the US–Mexico border despite failed inspections. The scheme involved more than $400,000 in bribes, allowed the Company to avoid over $6.5 million in fees and costs, and disguised the bribes as “reinspection fees” on broker invoices. Crucially, DOJ determined that part of the bribe money ultimately benefited individuals associated with cartel operations at the border, without the Company’s knowledge, framing the case as both an anticorruption and national security matter. The resolution highlights DOJ’s enforcement priorities, its focus on corporate cooperation, and steps companies can take to avoid exposure when engaged in cross-border trade.

This prosecution echoes a prior FCPA resolution against Guatemalan telecommunications provider Comunicaciones Celulares S.A. (“Comcel”) and its parent company, Millicom International Cellular S.A., in November 2025. That prosecution, which we previously covered in our Legal Update, involved a multi-year, pervasive bribery scheme targeting Guatemalan officials to secure and retain telecommunications business advantages. As part of that $118 million FCPA DPA, DOJ specifically noted in the resolution that the scheme involved the use of narcotrafficking proceeds to fund a portion of the illicit bribe payments.

Notably, in both resolutions, it did not matter to DOJ whether or not the companies knew that the bribe payments would fund narcotrafficking and cartel operations.

A Scheme That Hid Systemic Bribery

Scoular relied on multiple customs brokers to help move rail shipments into Mexico, which, under Mexican law, are inspected for impurities. According to DOJ, when inspections identified dirt or soil, Scoular employees authorized brokers to pay bribes to Mexican officials so that shipments could proceed rather than addressing the underlying compliance issues. Brokers billed these payments back to Scoular as “reinspection fees” or similar descriptions. Employees discussed shipments and the related payments via WhatsApp and other messaging platforms. Over time, these modest, transaction-level payments became an embedded operating model, repeated train-by-train for years.

Resolution Terms and DOJ Cooperation Credit

Scoular entered into a three-year DPA in the Western District of Texas, facing one count of conspiracy to violate the FCPA’s anti-bribery provisions (15 U.S.C. § 78dd-1 et seq.). The total financial obligation exceeded $10 million, consisting of a $9,769,521 criminal penalty and $414,351 in forfeiture. Despite the national security implications and cartel nexus, the resolution did not include an independent compliance monitor. Instead, Scoular committed to implementing a compliance program to prevent and detect FCPA violations, continuing cooperation with DOJ during the DPA term, and periodic self-reporting on remediation during the three-year DPA term. DOJ determined a monitor was unnecessary given Scoular’s remediation efforts and the state of its compliance program at resolution. This outcome is consistent with the current administration’s recalibrated approach to monitorships, and signals that companies investing in meaningful and demonstrable remediation before resolution can avoid the cost and operational burden of monitorships, even in matters involving critical national security issues.

The Company received a 25% reduction below the minimum penalty recommended under the US Sentencing Guidelines, highlighting the significance of cooperation and remediation on penalty outcomes, even without voluntary self-disclosure. The cooperation included conducting an internal investigation with detailed factual presentations to DOJ, identifying individuals involved, producing documents (despite early deficiencies), and securing counsel for employees. Remediation included increasing compliance sensitivity through enhanced business engagement, implementing findings from external compliance and anticorruption risk assessments, restructuring the compliance function with senior leadership oversight, eliminating customs brokers tied to suspect fees, strengthening risk-based monitoring with software tools, updating the Code of Conduct and key policies, enhancing third-party screening and audit rights provisions, revising financial controls, and providing targeted anticorruption training. DOJ noted that Scoular did not voluntarily disclose the misconduct, making it ineligible for additional mitigation of penalties under DOJ’s Corporate Enforcement and Voluntary Self-Disclosure Policy. In a related prosecution, an El Paso customs broker, who, along with his brokerage team, served as a third-party intermediary in the scheme, pleaded guilty to FCPA conspiracy in October 2025 and was sentenced to 18 months’ imprisonment.

Third-Party Intermediaries: Customs Brokers as High-Risk Gatekeepers

The case reinforces DOJ’s longstanding view that customs brokers and freight forwarders are high-risk intermediaries. Here, brokers arranged bribes to Mexican agricultural officials at Scoular employees’ direction, masked the payments as legitimate inspection fees, and enabled reimbursement of more than $400,000 in disguised bribes while avoiding over $6.5 million in costs. Two lessons stand out. First, licensing does not equal low risk. Even legally required customs brokers can be corruption conduits due to routine interactions with officials and control over local processes that headquarters cannot easily verify. Second, due diligence is ongoing, not one-time only. Initial screening at onboarding is necessary but insufficient; effective third-party management requires risk-based approvals, anticorruption and audit rights clauses in contracts, intermediary training, invoice testing and transaction monitoring, periodic recertification and audits, and thoughtful offboarding when concerns arise.

National Security and Cartel Risk: A New Dimension of FCPA Enforcement

A striking feature of this resolution is DOJ’s national security framing. Prosecutors emphasized that a portion of the corrupt payments “ultimately benefitted people who helped operate a cartel” at the US–Mexico border, even though Scoular personnel were unaware of that connection. US officials publicly stated that “nothing crosses into or out of Mexico without the approval and payment to Mexican drug cartels” and that American businesses engaging in cross-border trade bear “a significant amount of responsibility” not to benefit cartels or threaten national security. This framing aligns with DOJ’s 2025 FCPA Guidelines, which prioritize cases where corruption facilitates cartels or TCOs, and suggests that even indirect or unknown benefit to cartels can elevate FCPA case seriousness.

For businesses, the implications are significant. The announcement of this resolution shows DOJ views the US–Mexico border as high-risk, a hotspot for cartel activity, illicit finance, and national security threats. As a result, companies operating at the border should assume heightened scrutiny. Cartel or TCO exposure is not limited to direct government interactions; it can be embedded in logistics providers, customs brokers, subcontractors, and transportation routes with undisclosed cartel ties. Perhaps most importantly, “we didn’t know” may not be a defense. The resolution suggests DOJ will examine whether companies operating in high-risk regions maintained appropriate third-party diligence, monitoring, and compliance controls, particularly where corruption risks intersect with cartel or TCO activity. Companies may therefore face heightened scrutiny based not only on what they knew, but also on whether their controls were adequate to identify and mitigate those risks.

Key Takeaways for Companies Engaged in Cross-Border Trade

Businesses operating in Mexico, at border crossings, or in other high-risk corridors should reassess their compliance postures. Key steps include:

• Reevaluate Third-Party Risk Management
• Conduct enhanced anticorruption and sanctions-focused due diligence on customs brokers, freight forwarders, and other intermediaries interacting with government agencies.
• Include audit rights, robust invoicing and documentation requirements, and clear termination triggers in contracts.
• Regularly update due diligence, recertify higher-risk intermediaries, and maintain thorough records of both diligence and transactions.

• Strengthen Payment and Invoice Controls
• Because payments embedded in routine logistics and customs processes can create significant FCPA risk, require that any fees purportedly linked to regulatory processes be tied to a specific shipment and government agency, benchmarkable against official fee schedules, and supported by credible documentation of services rendered.
• Use data analytics to monitor transaction data (amount, timing, frequency, counterparties, and outcomes) to detect recurring, unexplained fees. Ordinary transaction data can become a powerful anticorruption control when systematically monitored.

• Integrate National Security and Cartel/TCO Risk into Compliance
• Treat border zones and cartel-dominated regions as elevated-risk environments across anticorruption, sanctions, anti-money laundering, trade compliance, and physical security.
• Conduct joint risk assessments across functions rather than siloed reviews.
• Document the “story” of your risk-based approach, including assessments, mitigations, escalation decisions, and any changes to operations.

• Control Off-Channel Communications
• Map where and how messaging apps like WhatsApp are used with third parties and officials; informal messaging apps can become de facto business systems when used to direct intermediaries, approve payments, or resolve customs problems.
• Clearly prohibit government interactions, payment approvals, and sensitive decisions on uncontrolled platforms; routine logistics coordination may be acceptable, but substantive decisions should happen only in systems that create proper records.
• Implement solutions and procedures to preserve and retrieve business communications when required, and enforce policies consistently when employees leave, change devices, or refuse access. DOJ’s reliance on WhatsApp messages in this matter is part of an ongoing trend, and companies should assume off-channel communications will be scrutinized.

• Prepare for Detection and Escalation
• Ensure internal audit, finance, and compliance have the tools and authority to flag irregular payments and escalate potential misconduct.
• Test controls in practice, not just on paper, and remediate gaps promptly.

• Plan for Voluntary Self-Disclosure
• Incorporate DOJ’s Corporate Enforcement and Voluntary Self-Disclosure Policy into incident response protocols.
• Establish clear decision-making processes for when and how to disclose, recognizing that delayed or non-disclosure may significantly increase penalties.

In an enforcement environment that increasingly links cross-border bribery to cartels and TCOs, companies cannot afford to treat customs brokers, border operations, and off-channel communications as peripheral compliance concerns. These areas are now central to FCPA and national security enforcement.