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On April 20, Dmitrij Harder, the former owner and president of two Pennsylvania consulting companies (referred to as the Chestnut Group) pleaded guilty to violations of the FCPA. Harder pleaded guilty to two counts of violating the FCPA by bribing an official at the European Bank for Reconstruction and Development (“EBRD”) before U.S. District Judge Paul S. Diamond of the Eastern District of Pennsylvania. The EBRD was a development bank based in London that was owned by approximately 65 sovereign nations and provided financing for development projects in Eastern Europe. On March 2, Judge Diamond ruled that the FCPA covered EBRD as a public international organization, rejecting one of Harder’s key defenses at his upcoming trial.
Between 2007 and 2009, Mr. Harder was alleged to have paid approximately $3.5 million in bribes to an EBRD official in exchange for the EBRD’s approval of applications for financing from two of the Chestnut Group’s corporate clients. The Chestnut Group earned approximately $8 million in “success fees” as a result of the two deals, which provided the Chestnut Group’s clients with nearly $300 million in investments and loans.
Mr. Harder’s sentencing is scheduled for July 21, 2016. He faces up to 10 years in prison. In a related action, the EBRD official, Andrey Ryjenko, and his sister, Tatjana Sanderson, were charged by the United Kingdom’s Crown Prosecution Service and are pending trial.
On February 8, 2013, a federal judge denied the motion to dismiss of several Magyar Telekom executives facing civil FCPA allegations, holding that the SEC had adequately alleged personal jurisdiction because the defendants' alleged conduct was “designed to violate” U.S. securities laws and thus was “directed toward the United States.” On February 22, the Defendants filed a motion to certify the order for interlocutory appeal to the Second Circuit, which was denied on procedural grounds without prejudice to re-file.
The SEC has posted a complete list of FCPA enforcement actions. Click here to view the list at www.sec.gov.
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