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Foreign Corrupt Practices Act & Anti-Corruption

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  • Micronesian official charged with money laundering conspiracy after guilty plea to bribery by Hawaiian executive

    On February 11, the Department of Justice (DOJ) unsealed conspiracy to commit money laundering charges against a Micronesian government official alleged to have taken bribes to secure engineering and project management contracts from the government of the Federated States of Micronesia (FSM). The charges follow the recent guilty plea by Frank James Lyon, a Hawaiian executive, to a charge of conspiracy to bribe the Micronesian official in violation of the FCPA. 

    According to the DOJ, Master Halbert was a government official in the FSM Department of Transportation, Communications and Infrastructure who administered FSM’s aviation programs. Between 2006 and 2016, Lyon’s Hawaii-based engineering and consulting company allegedly paid around $440,000 in bribes in the form of cash, vehicles, and entertainment to FSM officials, including Halbert, to obtain and retain contracts with the FSM government valued at nearly $8 million. The complaint unsealed on Monday contains specific examples of requests by Halbert to Lyon for cash gifts and a 2014 Chevy Silverado. According to Lyon’s guilty plea, he fulfilled Halbert’s requests and sent wire transfers and the automobile internationally for Halbert’s personal use.

    DOJ Anti-Money Laundering Bribery

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  • Former Petrofac oil-services sales executive pleads guilty in U.K. to bribery charges

    On February 6, the U.K. SFO announced that a former sales executive, David Lufkin, of an oil-services company, Petrofac PLC, had pleaded guilty in the U.K. to 11 counts of bribery regarding payments made in exchange for winning oil-services contracts in Iraq and Saudi Arabia. Lufkin – a British citizen and the former global head of sales for a subsidiary of Petrofac – pleaded guilty to participating in payments of more than $6 million to agents to win contracts worth more than $4 billion in Iraq and Saudi Arabia. The SFO’s investigation of Petrofac regarding suspected bribery and money laundering, which was announced in May 2017, is ongoing, but no other officers or employees are currently charged.

    UK SFO Bribery Anti-Money Laundering

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  • Former insurance executives charged with laundering bribes to Barbados Minister of Industry

    On January 28, DOJ announced charges against the former chief executive and a former senior vice president of a Barbados-based insurance company, Insurance Corporation of Barbados Limited (ICBL). The indictment alleges that the ICBL executives, Ingrid Innes and Alex Tasker, participated in a scheme to launder approximately $36,000 in bribes to the then-Minister of Industry of Barbados in exchange for his assistance in securing government contracts for ICBL. According to the indictment, the bribes were laundered through a United States bank account in the name of a dental company located in New York. The former Minister of Industry, Donville Inniss, was arrested in August 2018 and the indictment against him referenced, but did not name, his alleged co-conspirators. The superseding indictment against the three co-defendants and another still unnamed former insurance executive was unsealed on January 18, 2019. Prior Scorecard coverage of the arrest and indictment of the former Minister of Industry can be found here.

    ICBL voluntarily self-disclosed the case to DOJ and received a declination letter from DOJ for its cooperation pursuant to the FCPA Corporate Enforcement Policy. The declination letter required ICBL to disgorge $93,940.19 in profits received through the conduct at issue. The declination was based, in part, on ICBL’s termination of all executives and employees involved in the alleged misconduct and in helping DOJ identify the culpable individuals. Prior Scorecard coverage of the declination letter can be found here.

    DOJ Financial Crimes Anti-Money Laundering Bribery FCPA Corporate Enforcement Policy

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  • Treasury Department sanctions Venezuelan TV mogul over Venezuelan bribery scheme

    On January 8, the Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned Venezuelan individuals and companies, including billionaire news network Globovision owner Raul Gorrin Belisario and former Venezuelan National Treasurer Claudia Patricia Diaz Guillen, for their participation in a bribery scheme involving bribes to members of the Venezuelan government. According to the Treasury Department, OFAC designated or blocked seven individuals, including Diaz and Gorrin, and 23 entities, including Globovision, pursuant to Executive Order 13850, for their roles in bribing the Venezuelan Office of the National Treasury in exchange for the right to conduct illicit foreign currency exchanges in Venezuela.

    As a result of the designation, all property and interests in property of the designated individuals and entities “subject to or transiting U.S. jurisdiction are blocked,” and any U.S. transactions with them are prohibited. However, two Globovision companies owned by Gorrin and his business partner will be permitted to continue to conduct U.S. business for a one-year period. This period is intended to allow the Venezuelan-based Globovision news network to continue operating while Gorrin and his business partner divest their holdings in the company.

    As FCPA Scorecard previously reported, Gorrin was indicted under seal in August for conspiracy to violate the FCPA, conspiracy to commit money laundering, and nine counts of money laundering.

    FCPA Enforcement Action OFAC Anti-Money Laundering Bribery

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  • NY-based financial institution and various individuals charged in Malaysia

    On December 17 and 19, press reports indicate Malaysian prosecutors filed criminal charges against a New York-based financial institution and numerous individuals, including former executives of the financial institution, in connection with their alleged roles in a multi-billion bribery and money laundering scheme involving Malaysia sovereign wealth fund 1Malaysia Development Berhad (1MDB). 

    Malaysian prosecutors charged the financial institution with making false and misleading statements when raising money for 1MDB. Among individuals, Tim Leissner, a former participating managing director of the financial institution, and Ng Chong Hwa (also known as Roger Ng), a former managing director, also were charged. These charges follow the U.S. government’s investigation and charges related to the same 1MDB scheme.

    As detailed in prior FCPA Scorecard coverage, Leissner pleaded guilty in November to Conspiracy to Violate the FCPA and Conspiracy to Commit Money Laundering and agreed to forfeit $43.7 million. The DOJ charged NG with similar offenses and, according to press reports, is fighting extradition to the United States.

    According to press reports, in response to the filing of the criminal charges in Malaysia, the financial institution stated: “Under the Malaysian legal process, the firm was not afforded an opportunity to be heard prior to the filing of these charges against certain Goldman Sachs entities, which we intend to vigorously contest. These charges do not affect our ability to conduct our current business globally.” 

    The DOJ has not charged or reached a resolution with the financial institution, which previously announced that it was cooperating with the DOJ’s and all regulators’ investigations. The announcement of the Malaysian charges suggests that the U.S. DOJ and Malaysian prosecutors may not be coordinating efforts.

    FCPA Enforcement Action FCPA DOJ Anti-Money Laundering

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  • Former officer of Venezuela oil company pleads guilty to obstruction

    On December 10, a former procurement officer of Petroleos de Venezuela S.A. (PDVSA), Venezuela’s state-owned and state-controlled energy company, pleaded guilty to one count of obstructing an investigation into bribes paid by the owner of U.S.-based companies to Venezuelan government officials in exchange for securing additional business with PDVSA and payment priority on outstanding issues. Alfonso Eliezer Gravina Munoz (Gravina), who previously worked for PDVSA in Houston, Texas, pleaded guilty to one count of conspiracy to obstruct an official proceeding. 

    The charge stems from a guilty plea Gravina entered on December 10, 2015, to one count of conspiracy to launder money and one count of making false statements on his federal income tax return. Under the terms of a plea agreement in that case, Gravina agreed to cooperate with the investigation by being interviewed by the United States, and to providing “truthful, complete and accurate information” to government agents and attorneys. In the latest plea, though, Gravina admitted that after his earlier plea, he concealed facts about bribes paid to PDVSA by a target of the investigation, referred to as Co-Conspirator 1 in the indictment. Additionally, Gravina informed Co-Conspirator 1 that U.S. government authorities were investigating Co-Conspirator 1, and provided Co-Conspirator 1 with information about the investigation, including the topics discussed in Gravina’s meetings with the government. Consequently, Co-Conspirator 1 destroyed evidence and attempted to flee the country in July 2018. Gravina is scheduled to be sentenced on Feb. 19, 2019.

    Bribery Anti-Money Laundering

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  • Co-conspirators sentenced in Venezuelan bribery scheme involving Venezuelan TV mogul

    Two co-conspirators of billionaire news network Globovision owner Raul Gorrin Belisario were sentenced this week as part of the DOJ’s recently unsealed prosecution of a bribery scheme involving over $1 billion paid in bribes to members of the Venezuelan government. According to the DOJ, Gorrin was indicted under seal in August for conspiracy to violate the FCPA, conspiracy to commit money laundering, and nine counts of money laundering. Two co-conspirators, Florida resident and former Venezuelan National Treasurer Alejandro Andrade Cedeno, and Chicago resident and former owner of Banco Peravia Gabriel Arturo Jimenez Aray, each pleaded guilty under seal to one count of conspiracy to commit money laundering, and were sentenced in federal court earlier this week.

    According to Gorrin’s indictment, he allegedly bribed members of the Venezuelan government—including Andrade—in exchange for the right to handle the government’s foreign currency exchange transactions, and then acquired a bank in order to launder the bribe money and other illicit proceeds. To do so, Gorrin allegedly moved money from Switzerland to accounts in Florida and New York and used it to purchase luxury items such as “jets, a yacht, multiple champion horses, and numerous high-end watches.”

    In December 2017, Andrade pleaded guilty to one count of conspiracy to commit money laundering, admitting to taking bribes in exchange for helping his co-conspirators—including Gorrin—by choosing them to conduct currency exchanges at favorable rates to the Venezuelan government. As part of his plea, Andrade agreed to cooperate and pay a forfeiture money judgment of $1 billion through the forfeiture of “real estate, vehicles, horses, watches, aircraft, and bank accounts.” On November 27, 2018, U.S. Southern District of Florida Judge Robin L. Rosenberg sentenced Andrade to 10 years in prison, the maximum under his plea deal.

    In March 2018, Chicago resident and former owner of Banco Peravia Gabriel Arturo Jimenez Aray took a similar plea deal, pleading guilty to one count of conspiracy to commit money laundering, admitting to helping Gorrin and others acquire and then launder money through Banco Peravia.  On November 29, 2018, Jimenez was sentenced to 3 years in prison.

    The Miami Herald has also reported that Gorrin’s personal banker is Matthias Krull, formerly of Julius Baer Panama, who was sentenced last month for his role in another money laundering scheme involving Venezuela’s Petroleos de Venezuela S.A. (PDVSA). Coverage of the PDVSA prosecutions is available here.

    DOJ Anti-Money Laundering Bribery

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  • Oil company executives found guilty in U.K. of money laundering

    According to the U.K Serious Fraud Office (SFO), the former CEO and CFO of Afren, Plc., an oil and gas exploration and production company, were sentenced in the UK on October 29 for their parts in a kickback scheme in Nigeria. The former CEO was sentenced to up to six years in prison, and the CFO to up to five years. The executives, Osman Shahenshah and Shahid Ullah, were found to have recommended that Afren enter a $300 million deal with an oil field partner in Nigeria without telling the company’s Board that they would personally receive 15% of the deal’s value from the partner. They then laundered more than $45 million, using some of the proceeds to buy luxury Caribbean real estate. The SFO thanked the U.S. DOJ for its assistance with the investigation.

    UK Serious Fraud Office Anti-Money Laundering

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  • U.S. announces charges and guilty plea stemming from Malaysian development fund scheme

    The DOJ unsealed two indictments and a guilty plea related to the sprawling 1Malaysia Development Berhad (1MDB) fraud on November 1 in the Eastern District of New York. Malaysian financier Low Taek Jho (also known as Jho Low) and former banker Ng Chong Hwa (also known as Roger Ng) were charged with conspiring to launder billions of dollars embezzled from 1MDB, Malaysia’s investment development fund, and conspiracy to violate the anti-bribery provisions of the FCPA. Ng was also charged with conspiring to violate the FCPA by circumventing the internal accounting controls of a U.S. financial institution, which underwrote $6 billion in bonds issued by 1MDB. Ng was a managing director at the bank. Tim Leissner, another former banker at the same financial institution, pleaded guilty to the same charges. Leissner has been ordered to forfeit $43.7 million.

    Low, Ng, Leissner, and others allegedly conspired to bribe Malaysian and Abu Dhabi officials to obtain business for the financial institution, including the 1MDB bond deals. They also allegedly conspired to launder the proceeds through purchasing luxury New York real estate, artwork, and financing major Hollywood films, such as The Wolf of Wall Street.

    For prior coverage of the 1MDB scheme, please see here.

    DOJ Anti-Money Laundering Bribery FCPA

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  • Former PDVSA procurement officer pleads guilty

    On October 30, 2018, a Texas businessman, Ivan Alexis Guedez, who was a former procurement officer for PDVSA, pleaded guilty to conspiracy to launder the bribe payments he and his co-conspirators at PDVSA received for directing PDVSA business to a Miami-based supplier. The scheme involved false invoices, false e-mail addresses, and shell companies with a Swiss bank account.

    For prior coverage of PDVSA actions, please see here.

    International Anti-Money Laundering

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