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.
According to its May 19 securities filing, Embraer S.A., a Brazilian manufacturer of commercial jets, has entered into discussions with DOJ to resolve a FCPA probe launched by the Department in 2010. The governments investigation stems from allegations, previously covered here, that Embraer sales executives bribed various Dominican individuals who, in exchange, influenced legislators in the Dominican Republic to approve a $92 million contract and financing agreement for aircraft. In its filing, the company stated that a resolution of the investigation would result in fines and other sanctions by the DOJ. The Brazilian governments criminal case against the eight Embraer S.A. sales executives is still ongoing.
According to media reports, the Brazilian government has filed a criminal complaint against eight Embraer SA executives, alleging bribery of foreign officials. This is one of the first criminal prosecutions that Brazil has undertaken against its citizens for foreign bribery. The complaint alleged that Embraer sales executives agreed to pay a $3.5 million bribe to a retired Dominican Air Force colonel and then-director of special projects for the Dominican Republics armed forces, who in exchange influenced legislators to approve a $92 million contract and financing agreement for aircraft. The deal provided the Dominican Republic with eight Embraer Super Tucanos, which is an attack support aircraft. The complaint indicated that part of the bribe was to be paid to a Dominican senator, but the senator was not named in the complaint. The executives attempted to make the payments through three shell companies, but Embraers compliance department blocked the full transfer in 2009. The rest of the bribe payments were concealed by booking them as consulting fees to a middleman in a separate deal with Jordan that never happened. The complaint charges the Embraer executives with corruption in international transactions, which carries a maximum sentence of eight years in prison, and money laundering. According to The Wall Street Journal, who reviewed the complaint that was filed under seal, the U.S. DOJ and the U.S. SEC assisted the Brazilian prosecutors by providing evidence from the U.S. agencies investigations. In 2011, Embraer disclosed that it was under investigation in the United States for potential violations of the FCPA, and those investigations are ongoing.