Skip to main content
Menu Icon Menu Icon
Close

FCPA Scorecard Blog

Foreign Corrupt Practices Act & Anti-Corruption
Section Content

Upcoming Events

Filter

Subscribe to our FinCrimes Update for news about the Foreign Corrupt Practices Act and related prosecutions and enforcement actions.

  • FCPA class action against Embraer dismissed

    A class action against Embraer, the Brazilian aerospace firm, was recently dismissed by U.S. District Judge Richard Berman. The class action, which was brought in federal district court in New York, alleged that Embraer had failed to adequately disclose the scope and possible financial impact of ongoing corruption investigations by the DOJ and SEC, harming the company’s investors.

    In granting Embraer’s motion to dismiss, Judge Berman held that the company’s disclosures were sufficient as a matter of law, and that requiring disclosures advocated by the putative class plaintiffs would effectively require reporting companies to acknowledge guilt for conduct that was still being investigated and had not yet been charged.

    The underlying bribery alleged in the complaint (and being investigated by regulators) involves Embraer’s October 2016 admissions that from 2007 to 2011, company executives made payments to government officials in several countries, including the Dominican Republic, Saudi Arabia, Mozambique, and India, totaling $11.5 million. Embraer received government contracts resulting in profits over $83 million in exchange.

    This decision is a clear win for publicly traded companies currently under investigation for corruption-related conduct. Had the case proceeded, companies may have faced difficult choices between making more detailed disclosures to investors regarding the potential merits of ongoing investigations and protecting themselves against incriminatory public statements about these same matters.

    International Bribery Embraer Anti-Corruption

    Share page with AddThis
  • Kinross Gold Corporation settles SEC FCPA charge

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

    SEC Anti-Corruption

    Share page with AddThis
  • UK Serious Fraud Office recovers bribe from diplomat from Chad

    In what the UK’s Serious Fraud Office (SFO) is calling a first, a £4.4 million recovery from a corruption case will be returned overseas. The SFO prevailed in a trial before the UK High Court and recovered the money from Chadian diplomats, including the wife of the former Deputy Chief of the Chadian Embassy to the United States who was received the money in the form of discounted shares of Canadian oil company Griffiths Energy International, Inc. Griffiths also paid “consultancy fees” to diplomats through a front company called “Chad Oil” set up five days before the agreements with the diplomats. In exchange for the payments, Griffiths received exclusive development rights in Chad.

    The case has continued for some time—Griffiths paid a C$10 million criminal fine in Canada in 2013. After Griffiths was taken over by a UK corporation, the U.S. DOJ filed an In Rem. complaint and later requested SFO assistance.

    This recovery will be “transferred to the Department for International Development who will identify key projects to invest in that will benefit the poorest in Chad.”

    UK Serious Fraud Office Anti-Corruption

    Share page with AddThis
  • 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

    Share page with AddThis
  • $2.95 billion settlement in Petrobras class action

    On January 3, 2018, Petrobras announced that it has agreed to pay $2.95 billion to resolve the securities class action pending in the U.S. District Court for the Southern District of New York regarding the company’s well-known corruption scandal in Brazil. The class action claimed that investors were harmed by alleged corruption when contractors overcharged Petrobras and kicked back some of the overcharges through bribes to Petrobras officials. Under the proposed settlement, Petrobras has agreed to pay the funds in three installments. The agreement does not constitute any admission of wrongdoing or misconduct by Petrobras and Petrobras claims that this reflects its status as a victim of the acts uncovered in Operation Car Wash, as the corruption investigation in Brazil is known. The settlement agreement is still subject to approval by the District Court.

    Past ScoreCard coverage related to the Petrobras corruption allegations and investigation can be found here

    Score Card Petrobras Brazil Anti-Corruption

    Share page with AddThis
  • World Bank Sanctions Two French Companies for Corruption in Developing Countries

    The World Bank recently sanctioned two French companies for separate allegations of corruption in developing countries. On November 30, the World Bank announced that Oberthur Technologies SA, a French digital security company, was debarred for 2.5 years for “corrupt and collusive practices” related to a project that would establish a national ID system in Bangladesh. As part of its Negotiated Resolution Agreement (NRA), Oberthur acknowledged “improper payments to a sub-contractor and collusive misconduct to obtain and modify bid specifications to narrow competition and secure the award of the contract.” Oberthur was credited for its “extensive cooperation” with the World Bank’s investigation, including voluntarily acknowledging the misconduct, proactively conducting an internal investigation, holding individuals accountable, and taking “preliminary steps to improve its governance and compliance procedures.”

    On December 5, the World Bank separately announced that Sediver SAS, a French manufacturing company, was debarred for two years for a “corrupt practice” related to a project that would improve electricity infrastructure in the Congo. A World Bank investigation found evidence that the company “made improper payments to an employee of a consulting company to influence a tender process.” Under the NRA, Sediver’s parent company was also “conditionally non-debarred” for an 18-month probationary period. The holding company for the entities agreed to pay €6.8 million to the Congo, and the companies agreed to develop and implement a “group-wide integrity compliance program.” The holding company was credited for its “ongoing cooperation” with World Bank investigators, “acceptance of responsibility,” and “voluntary corrective and remedial actions.”

    International Sanctions Anti-Corruption

    Share page with AddThis
  • SAP Self-Discloses Approximately $6.8 Million in Payments to Gupta Family-Related South African Entities

    On October 26, SAP, a German multinational software corporation, announced that it has voluntarily disclosed commission payments of approximately $6.8 million to Gupta family-related entities to the U.S. Department of Justice and the Securities and Exchange Commission.  The voluntary disclosure in July has led to an ongoing DOJ and SEC investigation into SAP’s conduct. 

    SAP acknowledged that between December 2014 and June 2017, contracts with Transnet and Eskom, both South African state-owned companies, were closed with the assistance of Gupta family-related entities.   SAP’s internal investigation has also led to the initiation of disciplinary proceedings against three employees in South Africa.  The Gupta family, which is connected to South African president Jacob Zuma, has previously denied wrongdoing associated with receiving such kickbacks.  While acknowledging cooperation with the DOJ and the SEC, SAP stated that it has had no interaction with South African authorities and has not decided whether the company will approach South African authorities in the future.  The U.S. investigation is ongoing and SAP has acknowledged that it has begun the process of sharing documents with authorities.

    SEC DOJ Anti-Corruption

    Share page with AddThis
  • Former Guatemalan Soccer Executive and Judge Sentenced in FIFA Investigation

    On October 25, Judge Chen of the U.S. District Court for the E.D.N.Y. sentenced Hector Trujillo, the former general secretary of Guatemala’s soccer federation and a former judge, to eight months in prison and ordered restitution of $415,000 and forfeiture of $175,000. His sentence comes after a guilty plea to wire fraud and conspiracy in June 2017. Mr. Trujillo was arrested in 2015 as part of the U.S. government’s investigation into FIFA corruption. Trujillo’s sentencing marks the first individual sentenced among a group of more than 40 individuals who have been indicted or pleaded guilty since 2015.

    This sentencing comes as part of the U.S. government’s ongoing investigation into corruption in international soccer which has been ongoing. Previous FCPA Scorecard coverage of the FIFA investigation can be found here.

    FCPA Enforcement Action Anti-Corruption FIFA Fraud

    Share page with AddThis
  • 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

    Share page with AddThis
  • 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

    Share page with AddThis

Pages