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Financial Services Law Insights and Observations


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  • Treasury supports UK’s new Global Anti-Corruption Sanctions Regime

    Financial Crimes

    On April 26, U.S. Treasury Secretary Janet Yellen issued a statement in support of the UK’s new Global Anti-Corruption Sanctions Regime that will provide the UK with authority similar to that under the U.S. Global Magnitsky program, which targets human rights abusers and corrupt actors. Yellen noted that the UK’s new regime will provide opportunities for the two countries “to take complementary sanctions actions where appropriate,” and magnify the impact of each country’s respective sanctions. She further noted that “U.S. sanctions are more likely to compel changes in behavior and disrupt threatening activities when pursued in concert with our allies—carrying a more forceful economic impact by disrupting access to the international financial system—and sending a stronger message to malign actors by virtue of our solidarity.” Emphasizing that sanctions are just one tool to combat corruption, Yellen stressed that Treasury will support global efforts to, among other things, provide guidance to financial institutions and engage with “foreign and private sector partners to encourage reforms, ensure corrupt officials are held accountable, and see that vulnerabilities to corruption are addressed.”

    Financial Crimes OFAC Department of Treasury Of Interest to Non-US Persons UK Sanctions Anti-Corruption

  • German bank to pay $16.2 million for allegedly concealing corrupt hiring practices


    On August 22, a German-based bank entered into an administrative order with the SEC agreeing to pay $16.2 million to settle the SEC’s claims that it allegedly concealed corrupt hiring practices. According to the SEC, the bank allegedly violated U.S. laws—including the internal controls and books and records provisions of the FCPA—by offering jobs to relatives of Chinese and Russian government officials in an attempt to secure business or other benefits. Employees then created false books and records that concealed the practices and circumvented internal controls in place to prevent the activities. The SEC stated that the bank’s failure to properly enforce its written global anti-corruption policy allowed the bank to provide jobs in China and Russia from at least 2006 to 2014 based on how much business the candidate’s connections could bring to the bank.

    In entering into the administrative order, the SEC considered the company’s cooperation efforts and compliance efforts. Without admitting or denying wrongdoing, the bank agreed to pay a $3 million civil money penalty and more than $13.1 million in disgorgement and interest.

    Securities SEC FCPA Settlement Anti-Corruption China Russia

  • OFAC sanctions corruption network linked to Venezuela’s food subsidy program; DOJ charges two of same individuals for money laundering related to bribery

    Financial Crimes

    On July 25, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against two Colombian nationals responsible for “orchestrating a vast corruption network,” which has enabled former President Maduro and his regime “to significantly profit from food imports and distribution in Venezuela.” According to OFAC, the Colombian nationals created a network comprised of shell companies, business partners, and family members—all of whom have also been designated for their involvement in the network—that illicitly profited from their involvement in Venezuela’s food subsidy program as well as other contracts with the Venezuelan government. The sanctioned network—which also included Maduro’s three stepsons—allegedly “laundered hundreds of millions of dollars in corruption proceeds around the world.” As a result of the sanctions, “all property and interests in property of the individuals and entities designated today, and of any entities that are owned, directly or indirectly, 50 percent or more by those individuals or entities, that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC.” OFAC noted that its regulations “generally prohibit” U.S. persons from participating in transactions with the designated entities and individuals. OFAC also referred financial institutions to Financial Crimes Enforcement Network advisories FIN-2019-A002FIN-2017-A006, and FIN-2018-A003 for further information concerning the efforts of Venezuelan government agencies and individuals to use the U.S. financial system and real estate market to launder corrupt proceeds, as well as human rights abuses connected to corrupt foreign political figures and their financial facilitators.

    The same day, the DOJ announced charges, pursuant to an indictment filed in the U.S. District Court for the Southern District of Florida, against two of the same sanctioned Colombian nationals for money laundering and conspiracy to commit money laundering. The charges relate to the Colombian nationals’ alleged roles in laundering the proceeds of an illegal bribery scheme from bank accounts located in Venezuela to and through bank accounts located in the United States. The bribery scheme resulted in the transfer of approximately $350 million, and allegedly involved contracts to build low-income housing units and efforts to take advantage of Venezuela’s government-controlled exchange rates through the use of “false and fraudulent import documents for goods and materials.”

    Financial Crimes Department of Treasury OFAC Sanctions Venezuela Of Interest to Non-US Persons FCPA Anti-Corruption Anti-Money Laundering Bribery

  • SFO fines shipping and logistics company over $1 million for bribery scheme

    Financial Crimes

    On June 3, the UK Serious Fraud Office (SFO) announced that it had fined a shipping and logistics company £850,000 (approximately $1.08 million) for bribes paid to secure contracts in Angola. The SFO started investigating the company in September 2014 and announced in July 2016 that it had charged the company and seven individuals with making corrupt payments. The company pleaded guilty in 2017. The SFO found that executives had bribed an agent of the Angolan state oil company to obtain $20 million worth of shipping contracts.

    Financial Crimes UK Serious Fraud Office Anti-Corruption Bribery

  • UK SFO declines to prosecute individuals in British aviation company and British pharmaceutical company corruption investigations

    Financial Crimes

    The U.K.’s Serious Fraud Office (SFO) announced on February 22 that it was ending two long-running corruption-related investigations – one of a aviation company and the other of a pharmaceutical giant – without bringing charges against any individuals. 

    In 2017, the aviation company paid $650 million to settle an SFO investigation into a government kickbacks scheme. In connection with the resolution of the SFO’s charges, the aviation company admitted to bribing government officials in Russia, India, China, Nigeria, and elsewhere in exchange for contracts worth hundreds of millions of pounds. The aviation company also paid $170 million to resolve related charges brought by the DOJ, with the DOJ later charging five individuals for their alleged participation in the bribery scheme.

    Although the SFO announced in 2014 that the pharmaceutical company was under investigation, the SFO never disclosed the subject matter of that investigation. In its only announcements about the case, the SFO has noted simply that the investigation concerned the company’s “commercial practices.” In 2012, the pharmaceutical company had paid $3 billion in the U.S. to settle charges brought by U.S. prosecutors concerning alleged off-label marketing, and in 2014 was convicted in China of bribing doctors and hospitals to improve sales, but it remains unknown whether the SFO’s investigation related to one of these known issues or something different. 

    The SFO director explained in a public statement that the decision to decline prosecution of any individuals in connection with these investigations was because “there is either insufficient evidence to provide a realistic prospect of conviction, or it is not in the public interest to bring a prosecution in these cases.”

    Financial Crimes UK Serious Fraud Office Anti-Corruption DOJ Bribery Of Interest to Non-US Persons China

  • UK court convicts former power company executive

    Financial Crimes

    On December 19, a UK Court found former power company Global Sales Director guilty of conspiracy to corrupt in connection with his role in bribing Lithuanian officials to win lucrative power station contracts for the French power and transportation company. He will be sentenced on December 21.

    The conviction follows the guilty pleas of the company and two other individuals in the UK in connection with the company’s Lithuanian bribery scheme. According to the SFO, the companies paid Lithuanian politicians more than €5 million (~$6.3 million in today’s USD) in bribes to secure the contracts, valued at €240 million (~$304 million in today’s USD). The SFO also has charged the company and former executives for alleged corruption spanning Hungary, India, Poland, and Tunisia.

    In late 2014, the company and various subsidiaries agreed to pay a then-record $772 million fine in connection with FCPA violations spanning numerous countries. For prior FCPA Scorecard coverage of the company, please see here.

    Financial Crimes FCPA Bribery Anti-Corruption

  • Financial advisor pleads guilty to money laundering in Ecuadorian energy company case

    Financial Crimes

    On September 11, a Miami-based financial advisor pleaded guilty to one count of conspiracy to commit money laundering in connection with his role in making corrupt payments to officials of an Ecuador state-owned and state-controlled energy company. He is scheduled to be sentenced on Nov. 14 in the Southern District of Florida.

    He is the fourth individual, including two former officials of the company, to plead guilty in this case, which concerns efforts by an oil services contractor to make payments to the company's officials in an effort to retain existing contracts and win new business with the company. Another individual who was charged in the same indictment as him, has pleaded not guilty and is currently set to go to trial on October 15. His charges include one count of conspiring to violate the FCPA and one count of violating the FCPA.

    Financial Crimes Anti-Money Laundering Anti-Corruption FCPA

  • Colombia’s former anti-corruption chief pleads guilty to money laundering conspiracy related to foreign bribes

    Financial Crimes

    On August 14, the DOJ announced that Colombia’s former National Director of Anti-Corruption pleaded guilty to “participat[ing] in a conspiracy to launder money with the intent to promote foreign bribery.” A Colombian attorney also pleaded guilty to the conspiracy. According to the press release, the two men admitted that they “attempted to entice a bribe” from a Colombian politician who was facing a corruption investigation by the former director’s office by promising to provide statements made by cooperating witnesses in exchange for $34,500. Working undercover for the DEA, the politician paid the two men a $10,000 deposit of the bribe money during a June 2017 meeting in Miami. At that meeting, the two men were also recorded promising to obstruct the investigation in exchange for an additional $132,000 bribe. Cash from the deposit was found on the former director when he boarded his flight back to Colombia. The two men were arrested in Colombia and extradited to the U.S. in May 2018. Sentencing is scheduled for November 19, 2018.

    Financial Crimes DOJ Anti-Corruption

  • DOJ supervisor over fraud section addresses Global Forum on Anti-Corruption Compliance

    Financial Crimes

    On July 25, Deputy Assistant Attorney General Matthew Miner, who oversees the Fraud Section as well as other parts of the Criminal Division, spoke at ACI’s 9th Global Forum on Anti-Corruption Compliance in High Risk Markets. His speech focused on the DOJ’s efforts to combat global corruption, with a focus on merger and acquisition activity. Miner emphasized, among other things, the efforts the Department was taking to reduce global corruption, highlighting in particular the DOJ’s permanent enshrinement of the FCPA self-disclosure program. He pointed to a recent success of that program, the DOJ’s declination of prosecution against a commercial data company for hiring-related misconduct by its recently acquired China subsidiaries, previously discussed here. Miner also discussed the Department's recent “anti-piling on policy,” under which it gives credit for penalties paid to other enforcement authorities for the same misconduct. As an example of this policy, he noted how the Department credited 50 percent of the fine a French multinational banking and financial services company paid to French authorities for FCPA-related misconduct in a recent enforcement action.

    Miner asserted that the Department would like to do a better job providing guidance to companies facing FCPA risk through mergers and acquisitions, particularly when such activity is in high-risk industries and markets. He quoted from the DOJ’s 2012 Resource Guide, noting that in an acquisition, “a successor company’s voluntary disclosure, appropriate due diligence, and implementation of an effective compliance program may also decrease the likelihood of an enforcement action regarding an acquired company’s post-acquisition conduct when pre-acquisition due diligence is not possible.” Addressing pre-acquisition diligence, Miner stated that when an acquiring company encounters corruption issues during the diligence process, it should come to the Department for guidance through its FCPA Opinion Procedures before moving forward. Miner stated that not enough companies are taking advantage of this “tremendous resource.”

    Miner commented overall that with these policies and procedures, the Department hopes “to incentivize companies to invest in effective compliance programs and robust control systems to prevent misconduct and, in the event of a detected violation, to take full advantage of [the DOJ’s] enforcement approach.”

    Financial Crimes DOJ FCPA Anti-Corruption China

  • Canadian-based mining company settles SEC FCPA charge

    Financial Crimes

    The SEC fined a Canadian-based mining company $950,000 for its failure to implement and maintain adequate accounting controls at two subsidiaries in Ghana and the Islamic Republic of Mauritania. The company neither admitted nor denied the allegations. According to the SEC, the company acquired the subsidiaries in 2010 understanding that they lacked anti-corruption compliance programs. After three years of internal audits raising red flags, the company did implement adequate controls, however it did not maintain them. The SEC found that the company then awarded a contract to a sub-standard company preferred by Mauritanian officials, despite the company's internal bidding and tendering procedures. The company also failed to conduct required due diligence when it awarded a politically connected consultant a contract to facilitate government contracts.

    Financial Crimes SEC Anti-Corruption


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