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  • Second executive pleads guilty to FCPA violations in a German engineering company case involving bribes in Argentina

    Financial Crimes

    On March 15, a former executive of a German engineering company subsidiary, pleaded guilty in the U.S. District Court for the Southern District of New York to conspiracy to violate the Foreign Corrupt Practices Act, including conspiracy to commit bribery, falsify corporate books and records, circumvent internal controls, and commit wire fraud. According to the DOJ press release, the executive “admitted that he and his co-conspirators concealed the illicit payments through various means, including using shell companies associated with intermediaries to disguise and launder the funds.” He was indicted with seven others in 2011.

    He was part of a decade-long scheme during which the company paid tens of millions of dollars in bribes to Argentine government officials to secure a contract to create national identity cards. A subsidiary of the company was awarded a contract worth more than $1 billion to provide the ID cards in 1998. The Argentine government ended the project in 2001. Since then, the company and its employees have faced prosecutions and enforcement actions around the world as a result of the bribes and related conduct. The company pleaded guilty in the U.S. to violating the books and records provisions of the FCPA in 2008 for its conduct, and subsidiaries in Argentina and other countries pleaded guilty to similar crimes. The company also paid $350 million to resolve an SEC case and paid a fine of $800 million to resolve charges brought by the Munich Public Prosecutor’s Office.

    Prior FCPA Scorecard coverage of the case can be found here, here, here, and here.

    Financial Crimes DOJ FCPA Bribery

  • Maryland-based company enters deferred prosecution agreement for violations of FCPA antibribery provisions

    Financial Crimes

    On March 13, a Maryland federal court unsealed bribery-related charges filed in January 2018 against a Maryland-based company (part of a French industrial supplier), as well as a three-year deferred prosecution agreement filed on March 12. The government alleges that the company conspired to violate the FCPA by arranging and paying bribes to Russian officials to obtain uranium transportation contracts between 2004 and 2014. Pursuant to the deferred prosecution agreement, the company agreed to pay a $2 million criminal fine, adopt a compliance program, and provide periodic reporting to DOJ. According to the agreement, the company received credit for its substantial cooperation with the investigation and for its remedial actions, including firing all employees involved in the criminal conduct.

    As previously covered here, in 2015 three individuals entered into guilty pleas in this matter: a former Russian official based in Maryland; a former co-president of the company; and an alleged intermediary between the company and the Russian official. Most recently and as covered here, the other former co-president of the company, was charged in an 11-count indictment, unsealed in January 2018, alleging numerous violations of the FCPA and conspiracy to violate the FCPA.

    Financial Crimes DOJ FCPA Bribery

  • Houston-based energy company sues former Venezuelan government officials for bribery related conduct related to national oil company

    Financial Crimes

    On February 16, 2018, a Houston-based energy corporation that formally dissolved in May 2017 filed suit in the Southern District of Texas against two former presidents of a Venezuelan national oil company and others who allegedly worked for them. According to the complaint filed by the energy company, Venezuela’s Ministerio del Poder Popular de Petroleo y Mineria twice refused to allow the company to sell energy assets co-owned with the oil company because the energy company refused to pay bribes requested by the defendants. According to the energy company, the denials forced the company to sell the same assets at a loss of $470 million. The energy company has sued the defendants alleging civil violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), the Sherman Act, the Robinson-Patman Act, and the Texas Free Enterprise and Antitrust Act.

    This suit was filed days after the DOJ unsealed charges against five former Venezuelan government officials for their involvement in a money laundering scheme at the oil company. Previous FCPA Scorecard coverage of the ongoing DOJ and ICE-HIS investigation into bribery at the national oil company can be found here.

    Financial Crimes DOJ RICO Bribery

  • DOJ unseals charges against former Venezuelan government officials for money laundering and FCPA violations in state-owned energy company scheme

    Financial Crimes

    On February 12, the DOJ unsealed charges against five former Venezuelan government officials for their involvement in a money laundering scheme at Venezuela’s state-owned energy company. The five defendants are each charged with conspiracy to commit money laundering. Two defendants are also charged with conspiracy to violate the FCPA. 

    Four of the defendants were arrested in Spain in October 2017 on arrest warrants based on an indictment filed in the Southern District of Texas last August. One has been extradited from Spain, while the others are pending extradition. 

    The indictment alleges that the five defendants possessed significant influence within the company, which permitted them to solicit vendors for “bribes and kickbacks in exchange for providing assistance to those vendors in connection with their [company] business.” The company vendors included residents of the U.S. and vendors who owned U.S.-based businesses. According to the indictment, two company vendors transferred more than $27 million to accounts in Switzerland that were connected to two of the defendants. The two company vendors previously pleaded guilty in the Southern District of Texas to FCPA charges related to the bribery of company officials. 

    The charges are part of an ongoing investigation by the DOJ and ICE-HSI into bribery at the company, which has resulted in charges against fifteen individuals, ten of whom have pleaded guilty.

    Financial Crimes DOJ FCPA International Anti-Money Laundering Bribery

  • British pharmaceutical company responds to inquiries from SFO, DOJ, and SEC regarding its use of third-party advisors in China

    Financial Crimes

    In a securities filing on Wednesday, Feb. 7, a U.K.-based pharmaceutical company announced that it is responding to requests for information from the DOJ and SEC regarding third-party advisors that the company engaged in China. These requests came about after the company, pursuant to its continuing obligation to report to the SEC on its efforts to improve compliance following its September 2016 settlement of allegations that it violated the FCPA, informed the SEC and DOJ that the SFO had sought additional information in the course of its own investigation, which began in May 2014. The company was also investigated by Chinese authorities and, in September 2014, the company’s Chinese subsidiary was reportedly found guilty of bribery resulting in the company’s payment of a $491.5 million fine. 

    Previous FCPA Scorecard coverage here and here.

    Financial Crimes DOJ SEC FCPA SFO Bribery China

  • SFO confirms opening of criminal investigation into aerospace and defense group

    Financial Crimes

    On January 18, the Serious Fraud Office (“SFO”) confirmed the opening of an investigation of an aerospace and defense group and its subsidiary into alleged bribery, corruption, and money laundering. The UK-based company that designs and makes products in the aerospace and defense industries, stated that the investigation followed a voluntary report from the subsidiary relating to “two specific historic contracts.” According to the company, the first of these contracts was awarded before the company took over the business group being investigated, while the second contract occurred after the acquisition. The company stated that they will fully cooperate with the SFO’s investigation and provide further updates.

    Financial Crimes UK Serious Fraud Office Bribery Anti-Corruption Anti-Money Laundering

  • Real estate broker and nephew of former UN Secretary-General pleads guilty to FCPA charges

    Financial Crimes

    On January 5, 2018, the Department of Justice announced that a real estate broker and nephew of former UN Secretary-General, pleaded guilty to charges that he tried to bribe a Qatari official in connection with a sale of a high rise building complex in Vietnam. He pleaded guilty to one count of conspiracy to violate the FCPA and one count of violating the FCPA before U.S. District Judge Edgardo Ramos of the Southern District of New York. He was charged with his father, who was an executive at a South Korean construction company, and an arts and fashion blogger in December 2016. 

    In his guilty plea, the nephew admitted to joining a conspiracy to make $2.5 million in bribe payments to a Qatari official between February 2014 and May 2015 in an effort to sell the South Korean construction company-owned buildings in Vietnam, which were worth $800 million. The nephew admitted that he andhis father agreed to pay $500,000 to a Qatari official to persuade the official to use the Qatari sovereign wealth fund to purchase the building. The $500,000 was then transferred to the arts and fashion blogger, who posed as an agent for the foreign official, but instead of passing the payment to the foreign official, he double-crossed his codefendants and stole the $500,000. 

    Although the scheme involved a South Korean construction company and a Qatari foreign official, the Indictment alleged that the nephew qualified as a “domestic concern” pursuant to 15 USC 78dd-2(h)(1) because he was a lawful permanent resident of the United States and resided in New Jersey at the time. 

    The nephew faces up to five years in prison on each count. The blogger previously pleaded guilty to charges of wire fraud and money laundering for his role in the scheme, and was sentenced to 42 months in prison. The father has been charged, but not yet arrested.

    Financial Crimes DOJ FCPA Bribery

  • Singapore-Based Shipyard Operator Agrees to $422 Million Penalty to Resolve Foreign Bribery Case

    Financial Crimes

    On December 22, 2017, Singapore-based shipyard operator and shipping vessel repair company, and its wholly owned U.S. subsidiary, agreed to pay a combined total penalty of $422 million to resolve foreign bribery charges by the DOJ. Authorities in the United States, Brazil, and Singapore alleged that the companies engaged in a decade-long scheme to pay tens of millions of dollars in bribes to officials in Brazil, including those of a state-owned oil company. As part of the resolution, the company entered into a deferred prosecution agreement while its U.S. subsidiary pleaded guilty, as did a former senior member of the company’s legal department. The settlement is one of the largest FCPA enforcement penalties and also represents DOJ’s first coordinated FCPA resolution with Singapore. The settlement represents a 25 percent reduction off the bottom of the applicable U.S. Sentencing Guidelines fine range due to substantial cooperation by the companies with the investigation and the taking of remedial measures, including disciplining employees and implementing an enhanced compliance system. 

    Financial Crimes FCPA Enforcement Action DOJ Bribery FCPA

  • Court Reduces Sentence for Former Cayman Islands Soccer Executive Who Pleaded Guilty in International Soccer Association Investigation

    Financial Crimes

    On December 12, Judge Chen of the U.S. District Court for the E.D.N.Y. amended the recent sentence entered against a former general secretary of a Cayman Islands football association. On October 31, he was sentenced to serve 15 months in prison, pay $3 million in restitution, and observe a ban from international soccer organizations. Under the amended sentence, he was credited 10 months for time served in a Swiss jail prior to extradition; the other terms remained the same. 

    He was arrested in Zurich in 2015, as part of the U.S. government’s investigation into corruption involving an international soccer association. Earlier this year, he pleaded guilty to a conspiracy charge, admitting that he laundered millions of dollars in bribes from sports marketing companies to his longtime associate and the former president of a continental soccer association. He is the second individual sentenced among a group of more than 40 who have been indicted or pleaded guilty since 2015. Previous FCPA Scorecard coverage of the investigation can be found here.

    Financial Crimes Anti-Money Laundering Bribery

  • DOJ Charges Head of Organization Backed by Chinese Energy Conglomerate and Former Foreign Minister of Senegal With Bribing High-Level Officials in Chad and Uganda

    Financial Crimes

    On November 20, the DOJ unsealed a criminal complaint charging two people (collectively, the “Defendants”) with participating in a multi-year, multimillion-dollar scheme to bribe high-level officials in Chad and Uganda in exchange for business advantages for a Shanghai-based energy conglomerate (the “Energy Company”). One of the Defendants is the head of a non-governmental organization based in Hong Kong and Virginia that holds “Special Consultative Status” with the United Nations Economic and Social Council. The Energy NGO is funded by the Energy Company. The other Defendant is the former Foreign Minister of Senegal and operated an international consulting firm. The DOJ charged the Defendants with (i) conspiring to violate the FCPA, (ii) violating the FCPA, (iii) conspiring to commit international money laundering, and (iv) committing international money laundering. The Defendants have both been arrested and presented before Magistrates. 

    The DOJ alleges that the Defendants conspired to bribe African government officials on behalf of the Energy Company. Specifically, the DOJ alleges that in an effort to secure oil rights from the Chadian government, the Defendants offered a $2 million bribe to the President of Chad – and in return, the Defendants secured exclusive oil rights without competition. The Defendants allegedly wired almost a million dollars through New York’s banking system in furtherance of their scheme. One of the Defendants also allegedly provided Ugandan officials with gifts and promises to share profits derived from the Energy Company.

    Financial Crimes DOJ Bribery FCPA

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