In the annals of legal history, there are cases that capture the imagination, leaving us in awe of the sheer magnitude of consequences that individuals or entities face for their actions. One such question that has piqued the curiosity of many is, “Who Paid the Largest Criminal Fine in History?” In this article, we embark on a journey to uncover the answers to this intriguing question. Join us as we delve into the details, explore the circumstances, and shed light on the consequences faced by the party in question.
Naming the Highest Fine Is Complicated
Determining the company with the largest-ever criminal fine can be complex. These fines often include criminal penalties, civil fees, and mandated payments.
Christopher Morvillo, a Manhattan-based white-collar criminal defense lawyer, emphasizes that the colossal figures in the media may not solely constitute criminal fines. They can encompass civil penalties, disgorgement (profits surrendered), and victim restitution.
Considering the overall financial obligations, including criminal and civil fines, restitution, and fees, Tokyo Electric Power Company (TEPCO) stands out. TEPCO, which operated the Japanese power plant involved in the 2011 Fukushima nuclear disaster, faced over $450 billion in compensation claims. Although triggered by an earthquake and tsunami, the Fukushima Nuclear Accident Independent Investigation Commission (NAIIC) attributed the catastrophe to human factors, opening the door to criminal liability. A substantial portion of these claims appears to have been settled
The Biggest Criminal Fines in History: Top 9 Payees Revealed
Let’s delve into the top 9 entities that paid the largest criminal fines in history, shedding light on the reasons behind these substantial penalties.
1. TEPCO – $45 Billion: A Costly Nuclear Tragedy
Nine years after the Fukushima Daiichi nuclear plant disaster, TEPCO was ordered to pay staggering fines. The Fukushima disaster, triggered by an earthquake and tsunami, resulted in a partial core meltdown and significant radiation exposure in the surrounding region. Japan’s parliament conducted an extensive review, holding TEPCO primarily responsible for the man-made disaster. Initial claims against TEPCO totaled trillions of Japanese yen (equivalent to hundreds of billions of U.S. dollars) before being capped at around $45 billion. In July 2022, a Tokyo district court ordered four TEPCO executives to pay 13 trillion yen (approximately 95 billion USD) for their roles in the crisis.
2. B.P. – $4.5 Billion: The Deepwater Horizon Disaster
In 2010, the Deepwater Horizon oil rig disaster unfolded, releasing over 210 million gallons of oil into the Gulf of Mexico. BP, the rig’s operator, took five months to stop the oil flow, making it the largest marine spill in history. The financial consequences for BP were immense, starting with a $20 billion payment to create a Gulf Coast Claims Facility. In, BP agreed to a historic $18.7 billion environmental fine, making the total fines and penalties paid by BP exceed $54 billion.
3. Volkswagen – $14.7 Billion: The Emissions Scandal
In 2016, Volkswagen faced a monumental $14.7 billion fine from the Environmental Protection Agency. This penalty stemmed from the revelation that many of VW’s vehicles in the U.S. were equipped with software designed to cheat emissions tests. In reality, these cars emitted pollution levels up to 40 times the legal limit. VW had to recall and retrofit these vehicles, making this the largest global civil settlement involving an automaker accused of misconduct.
4. GlaxoSmithKline – $3 Billion: Unlawful Promotion
In 2012, pharmaceutical company GlaxoSmithKline agreed to the largest healthcare fraud settlement in history. The company pleaded guilty to violating the Civil False Claims Act and the Federal Food, Drug, and Cosmetic Act (FFDCA). This stemmed from illegal practices related to drugs like Avandia, Wellbutrin, Lamictal, Zofran, Paxil, Advair, Imitrex, Flovent, Valtrex, and Lotronex. GSK’s combined criminal and civil penalties exceeded $3 billion.
5. Pfizer – $2.3 Billion: False Claims
Pfizer made history by paying a $2.3 billion criminal fine for misrepresenting its pain medicine, Bextra. This drug was linked to an increased risk of heart attack and serious skin reactions. Pfizer admitted to the charges and withdrew Bextra from the market.
6. Bank of America – $16.65 Billion: The Financial Crisis Fallout
Amid the 2008 financial crisis, caused in part by subprime mortgage lending, Bank of America found itself at the center of investigations by the United States Department of Justice and the Securities and Exchange Commission. Bank of America’s culpability largely stemmed from companies it had acquired, including Countrywide Financial and Merrill Lynch. The bank settled with the Department of Justice, paying a $16.6 billion fine, the largest criminal fine ever imposed on a financial institution. Collectively, banks implicated in the financial crisis have paid over $250 billion in fines.
7. British Airways – $230 Million: Security Failure
In 2019, British Airways received a record $230 million fine due to a website failure that compromised the personal information of approximately 500,000 customers. The airline was criticized for inadequate security measures, allowing unauthorized access to customer data.
8. Facebook – $5 Billion: A Privacy Breach
In 2019, Facebook, now known as Meta Platforms, received a $5 billion fine from the Federal Trade Commission (FTC) for violating a 2012 order regarding user privacy and the use of personal information. This marked a significant increase compared to previous privacy-related fines. The settlement also established a committee tasked with safeguarding consumer data and ensuring transparent privacy policies.
9. Equifax – $700 Million: Data Breach Negligence
Equifax faced a $700 million fine for a massive 2017 data breach. The company was accused of failing to secure its network adequately, allowing hackers to steal sensitive data from 147 million individuals. This settlement included a fund to aid consumers affected by the data breach.
Industries Facing the Toughest Penalties
Several industries feature prominently on the list of entities paying substantial criminal fines. The pharmaceutical industry is notably high on the list, with many fines approaching or surpassing those set by GlaxoSmithKline. Companies like Pfizer, Johnson & Johnson, Eli Lilly, and Abbott Laboratories have faced fines exceeding $1 billion for various infractions, including kickbacks to physicians and off-label drug promotion.
The financial services sector, the energy industry, and public utilities also find themselves frequently entangled in significant legal penalties. While the automotive industry typically faces smaller fines, Volkswagen’s “Dieselgate” scandal deserves mention, as it settled with the Department of Justice for $14.7 billion in 2016. Although not all of this sum was categorized as fines, it remains one of the costliest settlements in history.
Do Criminal Fines Keep Getting Bigger?
A notable trend emerges when examining the largest criminal fines in history: all have been imposed during the 21st century. This period has witnessed an unprecedented increase in the size of fines. Christopher Morvillo, a former prosecutor, and current defense attorney, underscores this shift. Governments aim to deter corporate misconduct through substantial fines, as companies cannot be imprisoned. Therefore, massive fines serve as a means to compel companies to act ethically.
However, the pendulum may now be swinging in the opposite direction. As of January 2023, the U.S. Department of Justice has revised its corporate enforcement policies, offering incentives to companies that self-disclose internal wrongdoing. This policy change could lead to significantly reduced fines for companies that cooperate with investigations and reveal wrongdoing within their organizations.
In summary, the landscape of corporate criminal fines is complex and evolving. The record-breaking fines of the 21st century underscore the gravity of corporate misconduct, with industries like pharmaceuticals, finance, and energy frequently making headlines for their transgressions. As the regulatory landscape continues to evolve, corporations must navigate a shifting terrain where cooperation with authorities may offer substantial benefits in terms of reduced fines.
Who Paid the Largest Criminal Fine in History?
The largest criminal fine in history was paid by Tokyo Electric Power Company (TEPCO), totaling around $45 billion. This fine was a result of the Fukushima Daiichi nuclear plant disaster.
What was the Deepwater Horizon disaster’s financial impact on BP?
BP, the operator of the Deepwater Horizon oil rig, faced a total financial impact exceeding $54 billion due to the disaster. This included a $4.5 billion criminal fine.
Why did Volkswagen receive a $14.7 billion fine?
Volkswagen received a $14.7 billion fine from the Environmental Protection Agency for equipping their vehicles with software designed to cheat emissions tests, leading to excessive pollution levels.
What was the largest healthcare fraud settlement in history, and which company was involved?
GlaxoSmithKline (GSK) was involved in the largest healthcare fraud settlement in history, paying over $3 billion for illegal practices related to multiple drugs.
Which company paid a $2.3 billion criminal fine for misrepresenting its pain medicine, Bextra?
Pfizer paid a $2.3 billion criminal fine for misrepresenting its pain medicine, Bextra, which was linked to an increased risk of heart attack and serious skin reactions.