Fokker Services B.V.’s $21 million settlement with the United States over the violation of sanctions on Iran was delayed Wednesday by a federal judge who questioned the terms of the deal and whether the aerospace company voluntarily disclosed its wrongdoing.
U.S. District Judge Richard Leon in Washington set a hearing for July 24 for attorneys to address his misgivings about the size of the penalty levied on Fokker, the lack of criminal charges against individuals, inadequate court oversight and other elements of the accord. Leon must sign off on the deferred prosecution agreement before it can take effect.
“These are all components of the deal I have great concerns about,” Leon said.
The judge said he was also troubled by a report in Bloomberg News on Wednesday that raised questions about whether Fokker voluntarily disclosed in 2010 that it had sold aviation parts and services to Iranian clients. The report cited three people who claimed the government learned about the sanctions violations in 2008, two years before Fokker’s disclosure.
Prosecutors and the company said in court papers that Fokker’s disclosures sparked the inquiry and that the relatively lenient punishment the two sides agreed on was keyed to its forthright behavior.
The Bloomberg report “raises some questions about the accuracy of the government’s representations to the court,” Leon said.
Leon also asked the parties to file papers comparing how the proposed settlement with Fokker stacks up against other deferred prosecution agreements, including last year’s $1.9 billion accord with HSBC to resolve allegations the bank violated sanctions and money laundering laws.
Edward O’Callaghan, a partner at Clifford Chance and attorney for Fokker, declined to comment after the hearing.
Assistant U.S. Attorney Maia Luckner Miller, a prosecutor on the case, declined to comment, saying that she hadn’t seen the Bloomberg article.