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Foreign Corrupt Practices Act & Anti-Corruption

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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. 

    DOJ FCPA SEC

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

    On January 18, the Serious Fraud Office (“SFO”) confirmed the opening of an investigation of Chemring Group PLC (“Chemring”) and its subsidiary, Chemring Technology Solutions Limited (“CTSL”) into alleged bribery, corruption, and money laundering. Chemring, a UK-based company that designs and makes products in the aerospace and defense industries, stated that the investigation followed a voluntary report from CTSL relating to “two specific historic contracts.” According to Chemring, 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. Chemring stated that the company will fully cooperate with the SFO’s investigation and provide further updates.

    UK Serious Fraud Office Fraud Bribery Anti-Corruption Anti-Money Laundering Chemring

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  • Criminal charges unsealed against former Och-Ziff executive

    The DOJ recently unsealed criminal charges against former hedge fund executive Michael Cohen. This indictment follows a civil suit filed in January 2017 against Cohen and others by the SEC regarding FCPA violations. In 2016, the DOJ and SEC also pursued a joint FCPA enforcement action against Cohen’s former employer, Och-Ziff Capital Management Group, alleging various bribes, self-dealing, and other malfeasance relating to the procurement of mineral, oil, and other natural resource contracts in African counties.

    While the SEC’s initial January 2017 civil matter against Cohen alleged FCPA violations, the recently announced criminal indictment does not directly charge him with violating the FCPA.  Cohen is alleged to have obstructed the DOJ and SEC’s investigations of Och-Ziff and made false statements, but also to have committed investment advisor fraud.

    DOJ SEC FCPA

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  • Judge denies bail to former Hong Kong official, who pleads not guilty to alleged African bribery

    Patrick Ho, a former Hong Kong official, reportedly entered a not guilty plea and was denied bail in federal district court in New York related to a number of FCPA, conspiracy, and money laundering counts. Ho was charged in late 2017, along with his co-defendant Cheikh Gadio, the former Foreign Minister of Senegal, with offering $2 million in bribes to the President of Chad. Ho is also alleged to have paid a half-million dollar bribe to the foreign affairs minister of Uganda. The DOJ alleges that Ho sought to direct bribe money through an NGO that he ran, which is funded by a Chinese-based oil and gas company.

    FCPA Anti-Money Laundering

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  • DOJ unseals 11-Count FCPA indictment against Maryland executive

    In an indictment unsealed on January 5, the DOJ charged a former executive of a Maryland company, Mark Lambert, with 11 criminal counts, including seven counts of violating the FCPA and one count of conspiracy to violate the FCPA. The allegations relate to an alleged scheme to bribe Vadim Mikerin, an official at TENEX, a Maryland-based Russian energy company that is a subsidiary of Russia’s State Atomic Energy Corporation, as well as the sole supplier and exporter of Russian Federation uranium  and uranium enrichment services. Lambert alleged sought to improperly obtain awards of nuclear transportation contracts from TENEX to his company. Several other key players in the case already have pleaded guilty, including Lambert’s former business associate as well as Mikerin. Although sentencing for a number of the parties is forthcoming, Mikerin already has been ordered to forfeit $2.1 million following his guilty plea.  The initial investigation began in 2007 as part of a joint DOE-OIG and FBI probe into Mikerin for laundering the funds derived from the scheme into offshore accounts.

    DOJ FCPA Russia

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

    On January 5, 2018, the Department of Justice announced that Joo Hyun Bahn, also known as Dennis Bahn, 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. Mr. Bahn was charged with his father Ban Ki Sang, who was an executive at the South Korean construction company Keangnam, and Malcolm Harris, an arts and fashion blogger, in December 2016. Mr. Bahn is the nephew of former UN Secretary-General Ban Ki-moon.

    In his guilty plea, Mr. Bahn 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 Keangnam-owned Hanoi Landmark Tower and residential buildings in Vietnam, which were worth $800 million. Mr. Bahn admitted that he and Mr. Ban 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 Mr. Harris, who posed as an agent for the foreign official, but instead of passing the payment to the foreign official, Mr. Harris 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 Mr. Bahn 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. 

    Mr. Bahn faces up to five years in prison on each count. Mr. Harris 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. Mr. Ban has been charged, but not yet arrested.

    DOJ FCPA Bribery Qatari Vietnam

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