Criminal fines are levied on citizens and organizations and are a part of the law and order system in any nation, but the extent of the fine levied can depend on the seriousness of the crime or felony committed by the person or the organization.
Quick Answer for Who paid the largest criminal fine in history?’
TEPCO, a Japanese energy utility, paid the largest criminal fine in history. Multiple cases stemming from the Fukushima nuclear tragedy in 2001 compelled the court to impose criminal penalties of 11 trillion Yen or nearly $90 billion US dollars.
Now let us discuss some massive fines which were imposed on some of the well-known companies
Among some of the largest criminal fines paid by a person or organization, one of the most significant cases in the recent past is of the American multinational pharmaceutical company Pfizer. Pfizer violated the laws and paid a sum of $2.3 billion as a fine for committing fraud.
The British multinational oil and gas company BP had to pay a sum of $4 billion for the case involving the explosion of the drilling rig Deepwater Horizon in 2010, making it one of the largest criminal fines in history.
Keep reading to find out more about the cases and the people/organizations who paid the highest criminal fine in history.
Case I – Pfizer Inc – $2.3 Billion
While there had been many cases where companies and individuals had been charged with huge fines, the fine charged against the American multinational pharmaceutical company Pfizer is regarded as the largest criminal fine in recent times.
The name Pfizer became a very popular and familiar one during the time of the pandemic. The company was truly a godsend when it became one of the pioneers in developing a successful vaccine against the deadly COVID-19 pandemic.
But as their name became more and more famous people started to bring up the past history of the company which shed light on the infamous lawsuit that was filed against Pfizer in 2009.
The American multinational pharmaceutical company Pfizer and its subsidiary company Pharmacia & Upjohn Company Inc had to pay a fine of $2.3 billion in light of their civil and criminal allegations which accused the company of false claims and illegally promoting the use of four of their drugs.
The lawsuit is regarded as the largest civil fraud settlement in the world and is the largest fine paid by a company in the recent past. Even though Pfizer is not the one who paid the largest criminal fine in history, it is the largest criminal fine ever imposed on anyone in the United States for any matter.
Why did Pfizer pay $2.3 Billion as a fine?
According to the law in the United States, a drug should have the approval of the Food and Drug Administration ( FDA approval) before it can be made available in the market.
Only such drugs with certification are made available to patients. Also, the drug will be approved for a specific use, and by law, this means that the medication can be prescribed by a licensed medical practitioner for any use, including off-label use, if the company that manufactures the drug does not have this permission.
They cannot advertise or market the drug for anything other than the approved purpose.
Both Pfizer and Pharmacia & Upjohn Company Inc, the subsidiary company of Pfizer pleaded guilty to the accused charges.
They accepted the charge which accused the companies of violating the Food, Drug, and Cosmetic Act. One of the anti inflammatory drug Bextra which was developed by Pfizer was approved by the Food and Drug Administration and was introduced in the market as an anti-inflammatory drug.
But rather than marketing the drug for its intended purpose, the company illegally promoted the drugs for different uses and doses which were not approved by FDA.
These uses and dosages were specifically declined by the FDA owing to safety concerns. The drug was finally called off from the market by Pfizer in 2005.
As the company pled guilty to the charge of defrauding or misleading its clients, it had to pay a total of $1.195 billion for the settlement. It is regarded as the largest healthcare fraud settlement in the history of the United States.
“Along with Pfizer, their subsidiary company Pharmacia & Upjohn also was charged with a fine of $105 million, which makes up a total of $1.3 billion. “
Pfizer additionally needed to pay a sum of $1 billion in order to settle the allegations under the civil False Claims Act for illegally promoting four drugs that were manufactured by the company.
These four drugs are Bextra, anti psychotic drug Geodon, Lyrica, which is an antiepileptic drug, and finally Zyvox, which is an antibiotic.
The case had a very significant impact on different sectors in the United States. It directly put the credibility of TRICARE, the health care system of the Department of Defense under question and it also affected the Postal Service too.
The heavy fine that was imposed on the company was one of the biggest fraud settlements and was also described as a warning for pharmaceutical companies that try to put profit before customers. The lawsuit was thought to increase the integrity of the marketing of the pharmaceutical industry.
Case – II – BP P.L.C. – $4 billion
The fine charged against the British multinational oil and gas company BP is hands down one of the highest recorded criminal fines in history.
The reason behind the fine was the explosion of a semi-submersible drilling unit called Deepwater which was owned and operated by Transocean, which is the world’s largest offshore drilling contractor and was drilling for BP.
The Deepwater Horizon oil spill occurred in the Gulf of Mexico, specifically in the Macondo Prospect oil field. The oil field is located 65 kilometers off the Louisiana coast. The blowout that resulted in the explosion of the drilling rig also caused an oil well fire, which subsequently led to an offshore oil spill.
It eventually led to the deaths of 11 workers, and another 17 were reported as injured in the accident. The accident is considered one of the largest accidental marine oil spills in the world and is also seen as one of the largest industrial environmental disaster in the history of the United States.
As the range of damage caused by the case was massive, it became a topic of discussion worldwide. In 2022, BP filed a $40 billion lawsuit against three different companies, accusing them of the reason behind the explosion.
BP accused the rig owner, Transocean, the cementer, Halliburton, and finally, Cameron, who was the blowout preventer manufacturer. Each company agreed to pay the settlement through different methods but none of the companies was ready to take responsibility for the accident.
The year 2014 marked a significant turn of events in the case when United States District Judge Carl Barbier stated that BP was guilty in the case and was charged with civil and criminal penalties, committing the crime of gross negligence and willful misconduct under the Clean Water Act. The court allotted 67% of the blame for the spill to BP, 30% to Transocean, and 30% to Halliburton.
The Fine and additional charges
While the fine charged against BP for being responsible for the incident was $4 billion, it is estimated that the company paid almost $54 Billion as a settlement to the governments of different states which were affected by the incident like Alabama, Florida, Louisiana, Texas, and Mississippi.
A detailed financial report that was published by the Journal of Corporate Accounting and Finance shows that the ultimate cost of the oil spill case was approximately $145.93 billion.
Along with the huge fine, the two highest-ranking supervisors of the company were charged with manslaughter and obstruction of Congress charges.
“Apart from the criminal fine of $4 billion, the company also had to pay off other charges and fines. As the oil spill contributed to a major environmental hazard that heavily affected marine and wildlife habitats, BP was sued by different states on the matter and was advised to pay a total sum of $18.7 billion. “
The amount was supposed to be divided between four states and the money will be used for extensive cleaning initiatives.
Case III – The highest Criminal Fine Ever in History – TEPCO – $90 billion
The answer to the question “Who paid the largest criminal fine in history’ is the Japanese electric company TEPCO. The multiple lawsuits associated with the Fukushima nuclear disaster, which took place in 2001, forced the court to order a criminal fine of 11 trillion yen, which is approximately $90 billion American dollars.
Even though natural causes like tsunamis and earthquakes were the prime cause of the disaster, an inquiry into the nuclear reactor plant made it clear that the plant was not equipped with the needed or prescribed measures laid out by the government to avoid such situations.
Experts argue that if the plant was equipped with proper standards, then the extent of the disaster could have been much less than the actual ones.
The statement of one of the plaintiffs in the case said that the damage caused by the nuclear power plant has caused extensive irreversible damage to both human lives and also the environment.
As the extent of the damage caused was very high, a large amount of radioactive toxic had been released into the environment and it has left stretches of land uninhabitable for human life which forced tens of thousands of people to relocate.
As the waste is radioactive nuclear waste, the cleanup will take years and will also cost billions, before the land becomes habitable.
The disaster which occurred on March 11, 2011, took place as a result of the tsunami generated by an earthquake. The disaster is reported to have taken the lives of almost 18,000 people who live on the northern coast of Japan.
As the earthquake struck, three of the six reactors in the Fukushima nuclear power plant had a meltdown. The tsunami also flooded the backup generators. The disaster is regarded as the worst nuclear disaster in history after the Chornobyl disaster. The long-term effect of the radiation is still unclear.
The fine charged against the firm includes the compensation to be distributed to the people affected by the severe disaster and also to help clean up the waste that has polluted land and turned it uninhabitable.
Tokyo Electric Power Company Holdings, Inc, is a Japanese electric utility holding company. The company has its headquarters in Tokyo and also has two other offices operating in Washington D.C and London.
The company was founded in 1883 and the major area of operation included the capital city of Japan, Tokyo, and other areas like Kanagawa, Saitama, Chiba, Gunma, and a few more.
The company is regarded as the largest electric utility in Japan and also the 4th largest electric utility in the world.
Following the Fukushima disaster in 2011, the company gave rise to the ‘Nuclear Reform Special Task Force with an aim to reform the company’s safety measures, disaster prevention methods, and other features like the risk communication method.
The initiative which is led by the president is on the lookout to avoid history from repeating itself and also to provide a better safeguard for the company at the time of any possible environmental disasters in the future.
Who Paid The Largest Criminal Fine In History – Conclusion
Criminal fines are a part of our legal system and are levied on people and organizations as a measure to let them know the extent of the crime committed by them. While there have been many companies that have been charged with heavy fines throughout history, the above-mentioned cases are some of the largest criminal fines paid by any organization throughout history.
While there are cases where people commit mistakes or fraud knowingly, there are also cases where an accident occurs due to minute negligence, which has turned out to be fatal.
These large amounts of fines are also a reminder for the other companies to not repeat the past and to ensure their own and others’ safety in their operations.
Frequently Asked Questions
Who paid the largest criminal fine in history?
The largest criminal fine in history was paid by the Japanese electric utility holding company TEPCO.
What was the amount paid by TEPCO as a fine?
TEPCO has to pay a fine of $90 billion.
Who paid the largest criminal fine in the United States?
The largest criminal fine in the United States was paid by the pharmaceutical company Pfizer.