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Foreign Corrupt Practices Act & Anti-Corruption

Former Owner of Pennsylvania Financial Consulting Group Charged with Bribery

Russia Chestnut Group

On January 6, a federal grand jury in Pennsylvania returned a 14-count indictment charging the former owner of the Chestnut Group financial consulting companies with bribing an official of the European Bank for Reconstruction and Development (EBRD).  EBRD is a multilateral development bank owned by 64 sovereign nations that "fosters transition to market economies in countries from central and eastern Europe to central Asia and the southern and eastern Mediterranean." According to the indictment, Dmitrij Harder, a Russian national, paid $3.5 million in bribes to the sister of the EBRD official in order to influence the official's actions on financing applications submitted by two separate clients of the Chestnut Group.  The indictment alleges that the two clients, both of which conducted oil-and-gas operations in Russia, retained Chestnut Group "despite its relatively small size, distant location from the EBRD, and unproven track record as a financial advisor."  The EBRD approved the two applications.  Thereafter, the Chestnut Group made payments to the EBRD official's sister, who was retained as a consultant but actually provided no services to the Chestnut Group. The indictment alleges violations of the Foreign Corrupt Practices Act, the Travel Act, the money laundering statute and conspiracy.  Mr. Harder's attorney has disputed the charges in media reports.