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According to the DOJ, on March 25 a Hong Kong executive, Chi Ping Patrick Ho, was sentenced in the SDNY to a 36-month prison sentence. Ho headed up CEFC China Energy Company Limited and was sentenced “for his role in a multi-year, multimillion-dollar scheme to bribe top officials of Chad and Uganda in exchange for business advantages.”
Ho was convicted of money laundering, violating the FCPA, and conspiracy after a week-long trial in December 2018. The DOJ alleged that starting in the fall of 2014, Ho used his US-based NGO to cover up a scheme in which Ho offered $2 million in cash to Idriss Déby, the President of Chad, concealed in gift boxes, in exchange for CEFC receiving oil rights from the government; the President rejected the bribe. In Uganda, the DOJ alleged that Ho gave $1,000,000 in cash payments to Sam Kutsea, the Foreign Minister of Uganda, and Yoweri Museveni, the President of Uganda.
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.
On October 11, Assistant Attorney General Brian A. Benczkowski issued a memorandum to the DOJ’s Criminal Division that revises the framework for assessing when DOJ will require a corporate monitor as part of a resolution.
Under the revised framework, Criminal Division attorneys must now consider whether the company’s “remedial measures” or changes to “corporate culture” are enough to protect against future misconduct. For instance, “[w]here misconduct occurred under different corporate leadership” that has since left the company, a monitor may not be needed. Criminal Division attorneys must also consider not just the monetary costs to the company of imposing a corporate monitor, but also the burden to the company’s operations, and should impose a monitor only when a “clear benefit” would outweigh the costs and burdens.
As AAG Benczkowski remarked in a speech given the day after the memorandum was issued, the new corporate monitor policy is based on the “foundational principle” that “the imposition of a corporate monitor is never meant to be punitive,” and a corporate monitor ultimately “will not be necessary in many corporate criminal resolutions.”
The memorandum also refines the monitor selection process with the goal of, as AAG Benczkowski described in his speech, ensuring “that the process is fair,” that the “best candidate” is selected, and that “even the perception of any conflicts of interest” is avoided.
DOJ unseals charges against former Venezuelan government officials for money laundering and FCPA violations in Petroleos scheme
On February 12, the DOJ unsealed charges against five former Venezuelan government officials for their involvement in a money laundering scheme at Venezuela’s state-owned energy company Petroleos de Venezuela (Petroleos). The five defendants—Luis Carlos De Leon Perez (De Leon), Nervis Gerardo Villalobos Cardenas (Villalobos), Cesar David Rincon Godoy (Cesar Rincon), Alejandro Isturiz-Chiesa, and Rafael Ernesto Reiter Munozare (Reiter)—are each charged with conspiracy to commit money laundering. De Leon and Villalobos are also charged with conspiracy to violate the FCPA.
De Leon, Villalobos, Cesar Rincon, and Reiter were arrested in Spain in October 2017 on arrest warrants based on an indictment filed in the Southern District of Texas last August. Cesar Rincon has been extradited from Spain, while the others are pending extradition.
The indictment alleges that the five defendants possessed significant influence within Petroleos, which permitted them to solicit PDVSA vendors for “bribes and kickbacks in exchange for providing assistance to those vendors in connection with their PDVSA business.” The Petroleos vendors included residents of the U.S. and vendors who owned U.S.-based businesses. According to the indictment, two Petroleos vendors, Roberto Enrique Rincon Fernandez and Jose Shiera-Bastidas, transferred more than $27 million to accounts in Switzerland that were connected to De Leon and Villalobos. Rincon and Shiera previously pleaded guilty in the Southern District of Texas to FCPA charges related to the bribery of Petroleos officials.
The charges are part of an ongoing investigation by the DOJ and ICE-HSI into bribery at Petroleos, which has resulted in charges against fifteen individuals, ten of whom have pleaded guilty. Previous FCPA Scorecard coverage of the Petroleos investigation can be found here.
Florida Energy Company Owner Pleads Guilty to Conspiracy to Violate the FCPA in Venezuelan Bribery Scheme
On October 11, the DOJ announced that Fernando Ardila Rued – a co-owner of several Florida-based energy companies – pleaded guilty to FCPA charges that he conspired to bribe foreign officials in exchange for obtaining contracts from Venezuela’s state-owned energy company, Petroleos de Venezuela S.A. (PDVSA). In his plea, Ardila admitted to conspiring with two other individuals – Abraham Jose Shiera Bastidas and Roberto Enrique Rincon Fernandez – from 2008 through 2014 to bribe PDVSA purchasing analysts through cash payments and other entertainment in order to win contracts for Shiera and Rincon’s companies. Ardila is the tenth individual who has pleaded guilty in connection with the PDVSA scheme.
This investigation has been a collaboration between the DOJ, ICE-HSI, and IRS-Criminal Investigation Division. Previous FCPA Scorecard coverage of the PDVSA investigation can be found here.
- Daniel P. Stipano to moderate "Washington update" at the Puerto Rican Symposium of Anti Money Laundering
- Melissa Klimkiewicz to discuss "Private flood insurance updates" at the Mortgage Bankers Association Servicing Solutions Conference & Expo
- Jonice Gray Tucker and H Joshua Kotin to discuss regulatory compliance issues in the fintech industry at Protiviti's Risk & Compliance Innovation Roundtable
- APPROVED Checkpoint Webcast: CFL overview
- Amanda R. Lawrence and Sherry-Maria Safchuk to discuss "California privacy rule" on an NAFCU webinar
- Sasha Leonhardt to discuss "MLA & SCRA" on a NAFCU webinar
- Daniel P. Stipano to discuss "Pathway of the SARs: Tracking trajectories of suspicious activity reports from alerts to prosecution" at the ACAMS International AML & Financial Crime Conference
- Daniel P. Stipano to discuss "Which bud’s for you? A deep-dive into evolving marijuana laws" at the ACAMS International AML & Financial Crime Conference
- Brandy A. Hood to discuss "RESPA 8 (TRID applied compliance)" at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference
- Michelle L. Rogers to discuss "Major litigation" at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference
- John P. Kromer to discuss "Navigating the multi-state fintech regulatory regime" at the American Conference Institute Legal, Regulatory and Compliance Forum on Fintech & Emerging Payment Systems
- Jonice Gray Tucker to discuss "Leveraging big data responsibly" at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference
- Hank Asbill to discuss "Critique of direct examination; Questions and answers" at the American Bar Association Section of Litigation Anatomy of a Trial: Murder Trial of Ziang Sung Wan
- Hank Asbill to discuss "What judges want from trial lawyers" at the American Bar Association Section of Litigation Anatomy of a Trial: Murder Trial of Ziang Sung Wan
- Steven R. vonBerg to speak at the "Conference super session" at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference