Subscribe to our FinCrimes Update for news about the Foreign Corrupt Practices Act and related prosecutions and enforcement actions.
On November 22, the U.S. government filed a superseding indictment against a Macau real estate developer and his assistant in connection with their alleged involvement in an international bribery scheme. The superseding indictment included new charges that both men violated the FCPA in connection with alleged payments to then-UN ambassadors from Antigua and the Dominican Republic in exchange for official actions to benefit the defendants’ real estate company. The bribery charges contained in the original October 2015 indictment concerned only domestic bribery charges brought under 18 U.S.C. § 666, and not the FCPA.
It is not clear why the U.S. government chose to add the FCPA charges now as opposed to bringing them in the original indictment. First, there did not appear to be any FCPA jurisdictional hurdles in the original indictment. Moreover, one of the alleged bribe recipients named in both the original indictment and superseding indictment – the then-UN ambassador from Antigua – is and always was a “foreign official” under the FCPA. The UN has been designated a public international organization, and individuals associated with these organizations are “foreign officials” under the FCPA.
As a follow up to its March 2016 reporting about the Unaoil bribery scandal, the Huffington Post recently published an interview with a former Unaoil employee who has admitted to paying bribes to a manager in Libya’s state-owned oil company in order to win a government contract. Lindsey Mitchell, a former Unaoil manager, told the Huffington Post and the Australian newspaper The Age that in the summer of 2009 he was summoned to a meeting with a production manager at Waha, a subsidiary of the Libyan National Oil Company. At the meeting, the production manager provided Mitchell with details relating to an upcoming bid for a $45 million Libyan government contract. Huffington Post reports that “[t]he next morning, Mitchell called Ata, Cyrus and Saman Ahsani, the father and two sons who ran Unaoil. They were pleased. That afternoon, Martin Abram, a Unaoil manager, met Mitchell at the Unaoil staffhouse to deliver an envelope full of cash” which Mitchell delivered to the Waha manager. A few days later, Mitchell resigned. It is unclear whether Unaoil ever won the contract though the manager told Mitchell that “he expected a 5-10 percent kickback ― about $2-4 million ― if Unaoil won the contract.” According to the interview, Mitchell has recently been cooperating with U.S., U.K., Australian, and Canadian law enforcement authorities. Unaoil has denied Mitchells’ allegations and denies paying bribes to foreign officials in order to win deals for its multinational clients. Previous Scorecard coverage on the Unaoil investigations can be found here.
On December 20, the DOJ and the SEC announced separate enforcement actions against a major U.S. agribusiness firm and one of its foreign subsidiaries. In the DOJ action filed in the U.S. District Court for the Central District of Illinois, a foreign subsidiary of the U.S. corporate parent pleaded guilty to a single count of conspiracy to violate the anti-bribery provisions of the FCPA, and agreed to pay $17.8 million in criminal fines. The plea resolved the government's allegations that the subsidiary paid bribes through intermediary firms to Ukrainian government officials in exchange for over $100 million in value-added tax (VAT) refunds. The plea agreement with the DOJ was accompanied by a non-prosecution agreement with the U.S. parent to resolve claims that the company failed to implement internal controls sufficient to prevent and detect FCPA violations. Under that agreement, the company must periodically report on its compliance efforts, and continue implementing enhanced compliance programs and internal controls. The SECs parallel civil enforcement action resolved charges that the parent firms lack of sufficient anti-bribery compliance controls, which contributed to FCPA violations by foreign subsidiaries that generated over $33 million in illegal profits. The U.S. parent corporation consented to entry of a judgment that requires the company to disgorge the illegal profits plus $3 million in interest. The judgment also permanently enjoins the parent company from violating the relevant parts of the Exchange Act and requires compliance reporting for a three-year period.
- Daniel P. Stipano to discuss “Connecting the dots on your CDD program” at the ABA/ABA Financial Crimes Enforcement Conference
- Daniel P. Stipano to discuss “Beneficial Ownership: You have questions – We have quick answers” at the ABA/ABA Financial Crimes Enforcement Conference
- Moorari K. Shah to discuss "Legal & regulatory issues – Next wave of regulatory policy" at the Marketplace Lending & Alternative Financing Summit
- Daniel P. Stipano to discuss "Risk management in enforcement actions: Managing risk or micromanaging it" at an American Bar Association webinar
- Kari K. Hall and Christopher M. Walczyszyn to speak on the "Understanding updates to Regulation CC to ensure effective check processing" at a National Association of Federal Credit Unions webinar
- APPROVED Webcast: Periodic reporting made easier
- Daniel P. Stipano to discuss "A 20/20 view on 2020’s legislative and regulatory outlook" at the ACAMS Anti-Financial Crime and Public Policy Conference