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The DOJ announced on Thursday, April 19, that a former Venezuelan official had pleaded guilty to one count of conspiracy to commit money laundering. The charge arose from Cesar David Rincon Godoy’s role in a bribery scheme involving bribes paid by the owners of U.S. companies to Venezuelan government officials to secure energy contracts and payments on outstanding invoices. As the former general manager of the procurement subsidiary of the Venezuelan state-owned energy company, Petroleos de Venezuela S.A. (PDVSA), Rincon had solicited and accepted bribes. The judge entered a personal money judgment of $7,033,504.71. As a government official receiving the bribes, Rincon could not be charged himself with FCPA offenses (which are targeted at those paying the bribes). Related charges against four other individuals remain pending, including charges of conspiracy to violate the FCPA; 11 individuals have already pleaded guilty in the PDVSA cases.
For prior coverage of the PDVSA enforcement actions, please see here.
On June 16, the DOJ announced that Roberto Enrique Rincon Fernandez, the owner of several U.S.-based energy companies, had pleaded guilty to bribery charges related to a scheme to corruptly secure energy contracts from Venezuela's state-owned oil company, Petroleos de Venezuela (Petroleos). This stems from the previously reported December 2015 charges against Mr. Rincon and Jose Shiera-Bastidas, the owner of an oil-field supply company. According to admissions made by Rincon, he worked with Shiera to submit bids for equipment and services to Petroleos. Beginning in 2009, Rincon and Shiera agreed to pay bribes to Petroleos purchasing analysts to ensure that their companies were placed on Petroleos bidding panels, which enabled the companies to secure lucrative energy contracts. Rincon also admitted to making bribe payments to other Petroleos officials to ensure that his companies were placed on Petroleos-approved vendor lists and given payment priority over other vendors with outstanding invoices. Previous FCPA Scorecard coverage on the Petroleos investigations can be found here.
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.
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.
On March 27, Benito Chinea, the former CEO of now-defunct Direct Access Partners LLC (DAP), and another DAP employee were each sentenced to four years in prison, fined $40,000, and ordered to forfeit a total of more than $6 million for their role in a bribery scheme involving Venezuelas state-owned economic development bank, Banco de Desarrollo Económico y Social de Venezuela (Bandes). 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. The pair previously pleaded guilty last December in the U.S. District Court for the Southern District of New York to conspiracy to violate the FCPA and the Travel Act. Several other DAP employees also pleaded guilty to similar charges in 2013, and Gonzalez herself pleaded guilty to conspiracy to violate the Travel Act and to commit money laundering. The SEC also brought an enforcement action against Chinea and several other DAP employees; that action was stayed pending resolution of the criminal matters.
On May 7, the DOJ charged two employees of a U.S. broker-dealer and a senior official in Venezuela's state economic development bank for their alleged roles in what the DOJ describes as a "massive international bribery scheme." According to an unsealed criminal complaint, the DOJ accuses the broker-dealer employees and the foreign official of violating the FCPA by conspiring to pay $5 million in bribes to the foreign official in exchange for her directing the economic development bank's trading business to the broker-dealer, which yielded millions more in mark-ups and mark-downs for the broker-dealer. The government alleges that commissions paid on the directed trades were split with the foreign official through monthly kickbacks and that some of the trades executed for the bank had no discernible business purpose. To further conceal the scheme, the government claims, the kickbacks often were paid using intermediary corporations and offshore accounts, the assets of which the government is pursuing through a separate civil forfeiture action. On the same day, the SEC announced a parallel civil action against the two broker-dealer employees and two other individuals who allegedly participated in and profited from the scheme. The investigations and subsequent criminal and civil charges stemmed from a routine periodic SEC examination of the broker-dealer. The DOJ warned others in the financial services industry, particularly brokers, about engaging in similar activities, and the SEC's conduct in this case suggests its examiners are focused on conduct that potentially violates the FCPA.
- United States of America v. Clarke et al. Complaint
- Securities and Exchange Commission v. Clarke et al. Complaint