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  • Maryland-based Transport Logistics International Inc. enters deferred prosecution agreement for violations of FCPA antibribery provisions

    On March 13, a Maryland federal court unsealed bribery-related charges filed in January 2018 against Transport Logistics International, Inc. (“TLI”), a Maryland-based company which is part of France’s Daher Group, as well as a three-year deferred prosecution agreement filed on March 12. The government alleges that TLI 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, TLI agreed to pay a $2 million criminal fine, adopt a compliance program, and provide periodic reporting to DOJ. According to the agreement, TLI received credit for its substantial cooperation with the investigation and for its remedial actions, including firing all employees involved in the criminal conduct.

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

    DOJ FCPA Bribery

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  • Israeli real estate conglomerate to pay $500,000 to resolve SEC allegations of FCPA books and records and internal controls violations

    On March 9, an Israeli-based real estate conglomerate agreed with the SEC, pursuant to an administrative order, to pay $500,000 to resolve alleged violations of FCPA books and records and internal controls provisions. According to the order, the SEC found that from 2007 through 2012, Elbit Imaging Ltd (“Elbit” or the “Company”) and its Netherlands-based subsidiary, Plaza Centers NV, paid millions of dollars to third party consultants and agents for purported services related to a Romanian real estate project and the sale of a real estate asset portfolio in the United States. The SEC found that these payments were made with no indication that any services were actually provided.

    Elbit did not admit or deny the SEC’s findings, but agreed to resolve this matter with a civil money penalty. In accepting Elbit’s offer for resolution, the SEC took into consideration Elbit’s self-reporting in 2016 to authorities in Romania and in the United States, as well as its full cooperation with the investigation, including the hiring of outside counsel to conduct an internal investigation, the findings of which were shared with the SEC. The SEC also considered the extensive remedial measures Elbit has put into place as a result of those findings and the Commission’s suggestions.


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  • Several companies report developments in FCPA investigations

    In the second half of February, at least three unrelated companies have publicly disclosed the existence and/or status of various FCPA investigations in forms filed with the SEC:

    • Teradata Corporation: On February 23, data analytics company Teradata disclosed that the DOJ and SEC have both declined to pursue FCPA enforcement actions in connection with a subsidiary’s “questionable expenditures for travel, gifts and other expenses” in Turkey. As the Dayton, Ohio-based company previously disclosed on August 4, 2017, Teradata initiated an internal investigation after discovering the questionable expenditures, self-reported the issues to the DOJ and SEC, cooperated with the agencies, and undertook certain remedial actions.
    • Fresenius Medical Care AG & Co. KGaA: On February 27, dialysis provider Fresenius Medical Care disclosed that the DOJ and SEC are investigating potential FCPA violations related to “certain conduct in the company’s products business in a number of countries,” and that it has reserved €200 million for a potential settlement with the agencies. After receiving “certain communications alleging conduct in countries outside the U.S. that might violate the FCPA or other anti-bribery laws” in 2012, the Bad Homburg, Germany-based company conducted an internal investigation, self-reported the issues to the DOJ and SEC, cooperated with the agencies, and undertook certain remedial actions.
    • Exterran Corporation: On February 28, energy company Exterran disclosed that the DOJ and SEC have both declined to pursue FCPA enforcement actions in connection with “self-reported [accounting] errors and possible irregularities” at an Italian subsidiary conducting business in the Middle East. In April 2016, Houston-based Exterran previously disclosed that it was restating its 2015 financial statements and conducting an internal investigation related to the accounting issues. Although “the SEC’s investigation related to the circumstances giving rise to the restatement is continuing,” the FCPA piece of the investigation has concluded.


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  • Sanofi announces DOJ declination in FCPA investigation

    As previously covered, French pharmaceutical company Sanofi S.A. announced in October 2014 that it was investigating whether certain payments made by company employees to healthcare professionals in the Middle East and Africa violated the FCPA. Sanofi launched an investigation to review payments made from 2007 to 2012 as a result of anonymous whistleblower allegations, and self-reported the allegations to the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC). On March 7, 2018,  Sanofi announced in its Form 20-F SEC filing that the DOJ notified Sanofi in February 2018 that it was closing the inquiry into the self-reported whistleblower allegations. Sanofi is continuing to cooperate with the SEC’s review of the allegations.

    DOJ SEC FCPA Whistleblower

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

    On February 16, 2018, Harvest Natural Resources and HNR Energia B.V (collectively, “Harvest”), a Houston-based energy corporation that formally dissolved in May 2017, filed suit in the Southern District of Texas against two former presidents of Venezuela’s national oil company Petroleos de Venezuela, S.A. (“PDVSA”), Rafael Dario Ramirez Carreno (“Ramirez”) and Eulogio Antonio Del Pino Diaz (“Del Pino), and others who allegedly worked for Ramirez and PDVSA. According to the complaint filed by Harvest, Venezuela’s Ministerio del Poder Popular de Petroleo y Mineria twice refused to allow Harvest to sell energy assets co-owned with PDVSA because Harvest refused to pay bribes requested by the defendants. According to Harvest, the denials forced the company to sell the same assets at a loss of $470 million. Harvest 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 PDVSA. Previous FCPA Scorecard coverage of the ongoing DOJ and ICE-HIS investigation into bribery at Petroleos can be found here.

    DOJ Harvest Natural Resources Petroleos de Venezuela Bribery

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  • DOJ concludes FCPA investigation into Juniper Networks

    California-based Juniper Networks, Inc. announced in a February 9 8K filing that the DOJ has concluded its investigation into possible FCPA violations without taking action against the company. The company disclosed the FCPA investigation by the DOJ and the SEC in August 2013, but has not publicly disclosed any further details about the possible FCPA violations. Juniper’s recent filing stated that the DOJ’s letter acknowledged the company’s “cooperation in the investigation.” The filing also noted that the FCPA investigation by the SEC is still pending. 


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  • DOJ unseals charges against former Venezuelan government officials for money laundering and FCPA violations in Petroleos scheme

    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 Petroleos de Venezuela (Petroleos). The five defendants—Luis Carlos De Leon Perez (De Leon), Nervis Gerardo Villalobos Cardenas (Villalobos), Cesar David Rincon Godoy (Cesar Rincon), Alejandro Isturiz-Chiesa, and Rafael Ernesto Reiter Munozare (Reiter)—are each charged with conspiracy to commit money laundering. De Leon and Villalobos are also charged with conspiracy to violate the FCPA. 

    De Leon, Villalobos, Cesar Rincon, and Reiter were arrested in Spain in October 2017 on arrest warrants based on an indictment filed in the Southern District of Texas last August. Cesar Rincon has been extradited from Spain, while the others are pending extradition. 

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

    The charges are part of an ongoing investigation by the DOJ and ICE-HSI into bribery at Petroleos, which has resulted in charges against fifteen individuals, ten of whom have pleaded guilty. Previous FCPA Scorecard coverage of the Petroleos investigation can be found here.

    Score Card Bribery FCPA Petroleos de Venezuela DOJ Anti-Money Laundering Financial Crimes

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  • GSK responding to inquiries from SFO, DOJ, and SEC regarding its use of third party advisors in China

    In a securities filing on Wednesday, Feb. 7, U.K.-based pharmaceutical company GlaxoSmithKline PLC (“GSK”) announced that it is responding to requests for information from the DOJ and SEC regarding third-party advisors that GSK engaged in China. These requests came about after GSK, 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. GSK was also investigated by Chinese authorities and, in September 2014, GSK’s Chinese subsidiary was reportedly found guilty of bribery resulting in GSK’s payment of a $491.5 million fine. 

    Previous FCPA Scorecard coverage here and here.

    DOJ SEC FCPA SFO Bribery

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  • Allegations by short seller lead to corruption investigation of OSI systems

    In a securities filing on Thursday, Feb. 1, California-based OSI Systems, Inc. revealed that the DOJ and SEC have launched investigations into its FCPA compliance and regarding trading by company employees in the OSI Systems securities. These investigations were spurred by a report issued in December 2016 by a short seller, Muddy Waters LLC, which accused OSI of paying bribes to win a major contract in Albania. OSI Systems has denied that allegation, and stated in its Form 8-K filing that it is cooperating with the government’s investigations.


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  • SEC declines enforcement against Cobalt in FCPA investigation for second time

    Houston-based Cobalt International Energy, Inc. announced in a January 29, 2018 8-K filing that the SEC had concluded its second investigation relating to the company’s operations in Angola, and that SEC staff did not intend to recommend an enforcement action. The SEC’s investigation began in March 2017. As detailed in previous FCPA Scorecard posts, this follows the DOJ’s February 2017 declination and the SEC’s January 2015 declination following other investigations of the company’s Angola operations.

    SEC Cobalt International Energy Angola

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