Subscribe to our FinCrimes Update for news about the Foreign Corrupt Practices Act and related prosecutions and enforcement actions.
Contractor Pleads Guilty in Venezuela Oil Probe
On March 23, 2016, the DOJ announced that Abraham Jose Shiera-Bastidas pleaded guilty in a federal court in Texas to violating the FCPA and committing wire fraud by paying bribes to ensure that two companies won contracts and received other preferential treatment from Venezuelas state-owned oil company, Petroleos de Venezuela (Petroleos). Mr. Shiera-Bastidas was the owner of an oil-field supply company that supplied goods and services to Petroleos de Venezuela. Mr. Shiera-Bastidas was charged in December 2015 along with the owner of the other involved company, Mr. Roberto Enrique Rincon Fernandez. The charges against Mr. Rincon Fernandez are still pending and he has been detained pending his trial, which is scheduled for April. The judge also unsealed guilty pleas made by four other individuals in connection with the same probe into Petroleos. One of these individuals was an employee of Mr. Shiera-Bastidas company, while the other three individuals were former officials of Petroleos. Mr. Shiera-Bastidas is due to be sentenced in July and faces a maximum of five years in prison for each count. Previous FCPA Scorecard coverage on the Petroleos investigations can be found here.
Diagnostic Test Manufacturer Alere Discloses DOJ Investigation
On March 15, 2016, diagnostic test manufacturer Alere Inc. disclosed that the DOJ had requested documents related to the companys sales practices in Africa, Asia, and Latin America, and other matters related to the FCPA. The DOJs subpoena sought information about Aleres dealings with third parties, including government officials. The SEC is also investigating the companys revenue recognition practices in Africa and China, but the company did not disclose whether the two investigations are linked. Alere previously entered into to an agreement to be acquired by Abbott Laboratories, and the company said that it still expects the transaction to be completed by the end of 2016.
FIFA Seeks to Collect Millions as Victim in U.S. Case
On March 15, FIFA filed a Victim Statement and Request for Restitution (Statement) with the Department of Justice (DOJ) seeking a portion of the hundreds of millions of dollars that authorities could collect from the former FIFA employees who allegedly engaged in longstanding kickback and bribery schemes. In its Statement, FIFA asserts that the more than 40 defendants charged by the DOJ "grossly abused their positions of trust to enrich themselves," thereby causing significant harm to FIFA including financial losses and damage to FIFA's reputation. FIFA asserts that as the victim of the defendants' crimes, it is entitled to recover restitution under the Mandatory Restitution to Victims Act, 18 U.S.C. § 3663A. FIFA estimates its losses to be at least $28 million in salaries and benefits paid to the defendants, plus $10 million misappropriated as bribes. Time will tell if FIFA ultimately is deemed to qualify for restitution under the Act. Click here to view prior FCPA Scorecard posts on FIFA.
General Cable Increases Reserve for Potential Disgorgement to SEC for FCPA Violations
On February 10, General Cable Corp. disclosed in an 8-K that it had increased its already-accrued $24 million reserve to $28 million related to potential disgorgement the company anticipates having to pay the SEC for FCPA violations in Angola, Thailand, India, and Portugal. The 8-K stated that $28 million represented the estimated profit gained from transactions with FCPA implications, but that the disgorgement reserve may increase to $33 million because the company has also identified other transactions that may raise FCPA concerns. In September 2014, the fiber-optic cable manufacturer previously disclosed its internal investigation of payment practices with respect to employees of public utility companies in Angola, Thailand, India, and Portugal and stated that it was cooperating with the DOJ and SECs investigations into those practices.
Two Contractors Arrested in Venezuela Oil Probe
According to news reports, a DOJ spokesman has confirmed the December 20 arrest of two contractors in connection with an ongoing probe of Venezuelas state-owned oil company, Petroleos de Venezuela. One of the contractors, Roberto Rincon, is the owner of a Houston-based oil-field supply company. The other, Abraham Jose Shiera-Bastidas, is a Venezuelan national living in Florida. The indictment, filed in a Texas federal court, alleges violations of the FCPAs anti-bribery provisions as well as money laundering offenses, and seeks forfeiture of several Swiss bank accounts. The indictment alleges that between 2009 and 2014, Rincon and Shiera-Bastidas conspired to bribe Venezuelan officials in exchange for rigging the bidding panels that award contracts from Petroleos de Venezuela. The indictment identifies nine alleged bribes paid by Rincon and Shiera-Bastidas totaling $790,000.
Brazil Charges 12 Individuals in Connection with Petrobras Investigation
On December 21, Brazilian officials charged twelve individuals with corruption-related offenses in connection with a probe into the relationship between Petrobras and Dutch oilfield company SBM Offshore N.V. Those charged include several former SBM Offshore executives, former SBM Offshore sales agents, and several former Petrobras executives. News reports state that the charges center on $46 million in allegedly corrupt payments made between 1998 and 2012. On December 17, SBM Offshore issued a statement that referred to ongoing discussions with Brazils Comptroller Generals Office and Attorney Generals Office to reach a settlement agreement and to secure disclosure of information relevant to the ongoing investigation into Petrobras. Brazils actions follow SBM Offshores prior settlement with Dutch authorities over allegations that it bribed officials in Brazil, Angola, and Equitorial Guinea; SBM Offshore agreed to pay the Dutch Public Prosecutors Office $240 million as part of the settlement. The company also had announced the conclusion of the DOJs investigation into the matters resolved with the Dutch. Previous FCPA Scorecard coverage of SBM Offshore settlement and the Petrobas investigation can be found here and here.
Former SAP Executive Sentenced for Conspiracy to Bribe Panamanian Government Officials
On December 16, the U.S. District Court for the Northern District of California sentenced a former regional director of SAP International Inc. for his involvement in a conspiracy to bribe Panamanian government officials to obtain technology contracts. U.S. District Judge Charles R. Breyer sentenced Vicente Eduardo Garcia to 22 months in prison for his role in the bribery scheme. In August 2015, Garcia pleaded guilty to conspiracy to violate the FCPA, admitting that in 2009 he and others conspired to bribe two Panamanian government officials directly and a third official through an agent in order to obtain a contract to provide a Panamanian state agency with a technology upgrade package. Garcia and his co-conspirators used sham contracts and false invoices to conceal the bribes, and Garcia personally received over $85,000 for arranging the bribes. Garcia previously settled with the SEC and agreed to pay disgorgement of $85,965 plus prejudgment interest.
Former Russian Government Official Sentenced For Nuclear Energy Conspiracy Involving FCPA Violations
On December 15, a former Russian government official, Vadim Mikerin, was sentenced to 48 months in prison for conspiracy to commit money laundering in connection with $2 million in bribe payments he accepted to award government contracts with a Russian state-owned nuclear energy corporation. U.S. District Judge Theodore D. Chuang of the District of Maryland also ordered Mikerin, who resides in Maryland, to forfeit $2.1 million. Between 2004 and October 2014, Mikerin received bribe payments intended to improperly influence him in his role as a key official at a subsidiary of Russias State Atomic Energy Corporation and to secure improper business advantages for U.S. companies that did business with the subsidiary. Mikerin admitted that, in connection with the FCPA violations, he conspired with others to transmit approximately $2,126,622 from the United States to shell company bank accounts in Cyprus, Latvia and Switzerland. Mikerin also admitted to using consulting agreements and code words to conceal the bribes. Two of Mikerins co-conspirators Daren Condrey and Boris Rubizhevsky also pleaded guilty to conspiracy charges and are awaiting sentencing.
Former Direct Access Partners Executives Sentenced to Two Years in Prison
Two former executives of now-defunct Direct Access Partners LLC (DAP) were each sentenced to two years in prison for their roles in a bribery scheme involving Venezuelas state-owned economic development bank, Banco de Desarrollo Económico y Social de Venezuela (Bandes). On December 8, Tomas Clarke, the former Miami-based senior vice president of DAP, was sentenced to two years in prison and ordered to forfeit nearly $5.8 million for his role. On December 4, Ernesto Lujan, the former managing partner at DAPs Miami office, was sentenced to two years in prison and ordered to forfeit $18.5 million. The pair pleaded guilty in August 2013 in the U.S. District Court for the Southern District of New York to conspiracy to violate the FCPA, the Travel Act, and to commit money laundering, as well as substantive counts of these offenses. As described in a prior FCPA Scorecard post, DAP, a New York based broker-dealer, earned more than $60 million in commissions from trades placed by Bandes over a five year period. To obtain that business, DAP paid millions of dollars in bribes to a Bandes official, Maria De Los Angeles Gonzalez De Hernandez (Gonzalez), often routing them through third parties and offshore bank accounts in Switzerland and elsewhere. Clarke and Lujan are two of five former DAP executives to plead guilty in connection with this case. In March, two other former executives, including DAPs former CEO, were each sentenced to four years in prison. One other former executive, who pleaded guilty in August 2013, has yet to be sentenced. Gonzalez, who pleaded guilty in November 2013 in the U.S. District Court for the Southern District of New York to conspiracy to violate the Travel Act and to commit money laundering, as well as substantive counts of these offenses, also is awaiting sentencing.
Analogic Corp., Massachusetts-Based Imaging Company, Discloses Settlement Offer to End FCPA Investigations
In a quarterly securities filing made on December 9, Analogic Corp. (Analogic), a Massachusetts-based manufacturer of airport security equipment, disclosed that the SEC and DOJ have made separate proposals to end their FCPA investigations into the company (see pages 26-27) that would include payments totaling approximately $15 million. The company had previously announced in a September 2015 press release that it had offered the SEC $1.6 million to settle the SEC's FCPA investigation of the company. Analogic's 10-Q disclosed that the SEC rejected that offer. The company stated that it remains in discussion with the SEC and DOJ about settlement and is also discussing a settlement with the Danish government concerning a resolution of these matters. As described in a prior FCPA Scorecard post, Analogic previously reported that the DOJ and SEC had "substantially" completed their investigations of potential bribery involving transactions by the company's Danish subsidiary, BK Medical ApS. The transactions at issue involved distributors paying BK Medical more than was owed, and BK Medical then allegedly transferring the excess money to third parties identified by the distributors. At the time of its 2011 disclosure of the potentially problematic transactions, the company stated that it had not ascertained the ultimate beneficiaries or purpose of the transfers.
- Keisha Whitehall Wolfe to discuss “Tips for successfully engaging your state regulator” at the MBA's State and Local Workshop
- Max Bonici to discuss “Enforcement risk and trends for crypto and digital assets (Part 2)” at ABA’s 2023 Business Law Section Hybrid Spring Meeting
- Jedd R. Bellman to present “An insider’s look at handling regulatory investigations” at the Maryland State Bar Association Legal Summit