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  • Directors Plead Guilty in U.K. to Angola Bribe Scheme

    On September 15, F.H. Bertling Ltd., a logistics and shipping company, and six of its current and former directors pleaded guilty in the U.K. to charges of conspiracy to pay bribes in Angola. The trial against a seventh man charged in the conspiracy started this week in London. The U.K.’s Serious Fraud Office charged the company and the seven individuals last year with allegedly paying bribes when F.H. Bertling was seeking to obtain freight forwarding services contracts with the Angolan state oil company, Sonangol, between January 2005 and December 2006.

    UK Serious Fraud Office F.H. Bertling Ltd.

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  • Brazilian Petrochemical Company Reaches $10 Million Settlement With Investors

    On September 14, Braskem SA, a Brazilian petrochemical company, agreed to pay its U.S. investors $10 million for concealing its role in a corruption scandal involving Petrobras. The settlement resolves a 2015 lawsuit brought by U.S. investors against Braskem, which alleged the company had misled investors into believing its operations were legitimate. The settlement follows the December 2016 guilty plea by the company and its affiliated construction firm Odebrecht SA to violating the Foreign Corrupt Practices Act. Together, the companies agreed to pay $3.5 billion in a combined global settlement with U.S., Brazilian, and Swiss authorities.

    FCPA Enforcement Action Anti-Corruption Braskem SA Petrobras

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  • SFO Director Urges Department to Compete with DOJ on Home Turf

    In a September 4 speech, Serious Fraud Office (SFO) Director David Green urged the SFO to lead anti-corruption enforcement efforts against UK-connected companies, warning that “if we take our foot off the pedal . . . , others will fill the void.” Green noted that the DOJ “is not shy about enforcing the [FCPA] against foreign companies,” and emphasized that seven of the top ten highest-dollar FCPA cases since 2008 were brought against non-American companies. Green said that “it is surely right that the UK should lead enforcement in relation to UK companies or companies with strong connections here,” because it not only “demonstrates our commitment to the level playing field,” but it also “ensures that hefty financial penalties go to UK public coffers rather than elsewhere.”

    UK Serious Fraud Office DOJ FCPA

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  • FCPA Sting Operation Results in Conspiracy Charge for Retired U.S. Army Colonel

    On August 29, the DOJ announced that it had unsealed a criminal complaint and FBI affidavit charging retired U.S. Army colonel Joseph Baptiste “for his alleged role in a foreign bribery and money laundering scheme in connection with a planned $84 million port development project in Haiti.” The DOJ alleges that Baptiste solicited bribes “from undercover [FBI] agents in Boston who posed as potential investors,” telling the agents “that he would funnel the payments to Haitian officials through a non-profit entity that he controlled . . . in order to secure government approval of the project.” Baptiste allegedly received a $50,000 payment from the FBI, which he wired to his non-profit organization. While Baptiste ultimately used the payment for personal purposes, rather than his promised bribery, he allegedly “intended to seek additional money from the undercover agents to use for future bribe payments in connection with the port project.” The DOJ also alleges that FBI agents intercepted telephone calls where Baptiste “discussed bribing an aide to a senior Haitian official by giving him a job on the port development project after he left his position.”

    FCPA sting operations are relatively rare. An infamous FCPA sting operation involving Africa resulted in charges for 22 defendants, but it concluded unsuccessfully in 2012 after a series of acquittals and hung juries caused the DOJ to dismiss the remaining indictments.

    DOJ FBI Hati Anti-Money Laundering

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  • Report: California-Based Ride Sharing Company Facing DOJ Scrutiny

    On August 29, the Wall Street Journal reported that a California-based ride sharing company is facing scrutiny from the DOJ, which has taken preliminary steps to investigate potential FCPA violations at the company. The company has expanded into more than 70 countries. A company spokesman confirmed the DOJ’s inquiry. The Wall Street Journal report stated that it was unclear whether DOJ would open a formal investigation.

    FCPA Enforcement Action DOJ

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  • Swedish Prosecutor Charges Russian Bombardier Sales Executive with Bribery of Azerbaijan Officials

    On Friday, August 18, a Russian employee of Bombardier Transportation AB, a Swedish branch of Bombardier, the Canadian producer of aircraft and train equipment, was charged by a Swedish prosecutor with aggravated bribery. Evgeny Pavlov, a sales executive, is alleged to have bribed a public official in Azerbaijan to win a contract valued over $300 million to supply Azerbaijan with a signaling system for its railways. Pavlov was first detained in March 2017 and has been held in custody since that time. If convicted, he faces six years imprisonment and deportation.

    According to a March 2017 report by the Organized Crime and Corruption Reporting Project (OCCRP), an investigative reporting network spread across Europe, Africa, Asia, and Latin America established in 2006 to conduct transnational investigative reporting to expose global organized crime and corruption, Bombardier Transportation AB was suspected of paying “millions of dollars in bribes to unidentified Azerbaijani officials through a shadowy company registered in the United Kingdom,” which the Swedish prosecutor has characterized as having “no employees or business” but which profited substantially in this deal by purchasing equipment from Bombardier Transportation AB and selling the identical equipment to Bombardier’s Azerbaijan affiliate for a profit. According to export records reviewed by the OCCRP, the equipment was delivered directly from Bombardier Transportation AB to Azerbaijan. The report identified the UK intermediary as Multiserv Overseas Ltd., which, according to an earlier OCCRP report is alleged to have ties to Vladimir Yakunin, the former president of Russian Railways, and is alleged to have had similar involvement in a Bombardier contract with Russia.

    UK Anti-Corruption Bribery Russia Canada Sweden Bombardier Azerbaijani

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  • MTS Systems Announces Closure of FCPA Investigations

    On August 7, MTS Systems announced in its Form 10-Q the closure of DOJ and SEC FCPA investigations related to gift, travel, entertainment, and other expenses incurred in connection with its Asia-Pacific operations. Minnesota-based MTS Systems initially informed the DOJ and SEC about this matter in 2012 and thereafter provided the government periodic updates. According to MTS Systems’ 10-Q, the government’s investigations were closed “without further action taken by either [the SEC or DOJ].”

    FCPA Enforcement Action DOJ SEC MTS Systems

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  • Teradata Discloses FCPA Investigation in Quarterly Filing

    On August 4, Ohio-based Teradata Corporation disclosed in its 10-Q that the DOJ and SEC are conducting investigations concerning potential violations of the FCPA related to a subsidiary’s operations in Turkey. Teradata operates in more than 70 countries and develops and sells technology-enabled solutions, including data warehouse management and database technologies. 

    According to Teradata’s 10-Q, the company “discovered certain questionable expenditures for travel, gifts and other expenses at one of its international subsidiaries” doing business in Turkey. Teradata stated that it promptly launched an internal investigation and, in February 2017, self-disclosed the investigation to the SEC and DOJ. According to its 10-Q, Teradata has periodically updated the government about its investigation and plans to “continue to cooperate fully.” Teradata also noted that it already has “taken remedial actions,” including terminations, and that the FCPA issues “involved specific individuals who are no longer with the Company.” 

    It appears that Teradata is making a case for full cooperation credit under the DOJ’s Pilot Program, which encourages companies to “voluntarily self-disclose FCPA-related misconduct, fully cooperate with the Fraud Section, and, where appropriate, remediate flaws in their controls and compliance programs.”

    FCPA Enforcement Action Teradata DOJ SEC

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  • Three Companies Announce the Close of FCPA Investigations

    During the week of July 24, 2017, three different companies announced the closure of DOJ and/or SEC FCPA investigations: IBM, Net 1 UEPS Technologies, Inc. (“Net 1”), and Newmont Mining. 

    In a Form 10-Q filed with the SEC on July 25, 2017, IBM disclosed that the DOJ and SEC had each informed the company in June 2017 of the closure of their respective investigations into “alleged illegal activity by a former IBM Poland employee in connection with sales to the Polish government.” The company initially informed the SEC in 2012 that the Polish Central Anti-Corruption Bureau was looking into the matter, and the DOJ followed up with its own investigation in April of 2013. The DOJ expanded the investigation from Poland to Argentina, Bangladesh, and Ukraine. The 2012 issues came on the heels of a 2011 settlement in which IBM paid the SEC $10 million to settle separate FCPA allegations for alleged cash payments to Chinese and Korean officials.

    South African alternative payment systems provider Net 1 made a similar announcement on July 27, stating that the DOJ had written a letter to the company closing its investigation of alleged FCPA and disclosure violations. According to the announcement, the DOJ, along with the SEC and South African authorities, began looking into a 2012 contract award process involving a Net 1 subsidiary, Cash Paymaster Services Proprietary Limited, after an unsuccessful bidder for the same contract “refer[ed] unsubstantiated South African press articles to the DOJ.” The SEC was the first to bow out of the investigation, closing its inquiry through a letter in 2015, followed six months later by the South African government. Net 1 is traded on NASDAQ’s Global Select Market, providing a jurisdictional hook into a case otherwise about payments made by a South African company in South Africa to South African citizens who were South African government employees. Our additional coverage of this matter can be viewed here.

    In a Form 10-Q filed on July 25, 2017, Newmont Mining also announced the end of a DOJ investigation into alleged violations of the FCPA “relating to certain business activities of [Newmont Mining] and its affiliates and contractors in countries outside the U.S.” According to the announcement, the Colorado company had already received a similar declination from the SEC earlier this year. Our additional coverage of this matter can be viewed here

    The DOJ simultaneously reportedly confirmed to the Wall Street Journal that the agency was still actively enforcing the FCPA. The Journal cited an anonymous source at the DOJ for assurances that “though there haven’t been any new corporate FCPA cases since mid-January, there is no letup in U.S. enforcement efforts.”

    DOJ SEC IBM Net 1 UEPS Technologies Newmont Mining Corporation FCPA Enforcement Action

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  • Macau Real Estate Developer Convicted of Violating FCPA

    On July 27, 2017, a federal jury in the Southern District of New York convicted Ng Lap Seng of Macau of bribery, money laundering, and conspiracy, for his role in a widespread plan to bribe United Nations officials in order to establish a new conference facility in Macau. Five other defendants have also been charged; four have pleaded guilty, and one passed away. A sentencing date has not yet been set.

    As pointed out on the FCPA Professor, this is a significant win for the DOJ because it marks the first time since 2011 that the DOJ has successfully taken an FCPA case to verdict. Our additional coverage of this matter can be viewed here.

    FCPA Enforcement Action Anti-Money Laundering Bribery

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