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  • Former Swiss Bank Executive Pleads Guilty in FIFA Investigation

    On June 15, the U.S. Attorney’s Office for the Eastern District of New York announced that Jorge Luis Arzuaga, a citizen of Argentina and a former managing director of the Swiss Bank Julius Baer, pleaded guilty to money laundering conspiracy charges. His guilty plea came in connection with allegations that he facilitated the payment of more than $25 million in bribes to soccer officials by opening and managing bank accounts for those officials. In exchange for his assistance in facilitating these bribes, Arzuaga received over $1 million in bonus payments from other co-conspirators, an amount he agreed to forfeit in connection with his plea. 

    The guilty plea came as part of the U.S. government’s investigation into corruption in international soccer which has been ongoing since May 2015. Previous FCPA Scorecard coverage of the FIFA investigation can be found here.

    Score Card Anti-Money Laundering Bribery FIFA

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  • Reports: Wal-Mart Nearing Resolution of Bribery Probe

    Bloomberg reports that Wal-Mart is nearing a resolution of a five-year old joint inquiry by the DOJ and SEC. Citing an unnamed source familiar with the matter, Bloomberg reports that the company is preparing to pay $300 million to settle allegations that company employees paid bribes in Mexico, China, and India. The same source reported that the resolution will also include at least one guilty plea by a Wal-Mart subsidiary, a non-prosecution agreement for the parent company, and a monitorship.

    In March of 2015, a federal district court in Arkansas dismissed with prejudice a consolidated shareholder derivative suit accusing Wal-Mart Stores Inc.’s (Wal-Mart) board of directors of concealing Mexican bribery claims from investors. The lawsuit was filed after a 2012 article by the New York Times reported that top officials at Wal-Mart’s Mexican subsidiary oversaw millions of dollars in bribes in connection with the company’s expansion in Mexico. See previous Scorecard coverage here. The same article is believed to have touched off the DOJ’s and SEC’s inquiry. If true, a $300 million resolution would not be near the top end of FCPA resolutions.

    DOJ SEC Score Card Bribery Wal-Mart

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  • Two Additional Businessmen Plead Guilty in Petroleos Scheme

    On January 10, it was announced that two additional defendants, Juan Jose Hernandez Comerma and Charles Quintard Beech III, owners of Florida and Texas-based energy companies, had pleaded guilty to foreign bribery charges related to a scheme to corruptly secure energy contracts from Venezuela’s state-owned oil company, Petroleos de Venezuela S.A.

    According to admissions by Hernandez and Beech, they conspired with other previously charged defendants from 2008 through 2012 to pay bribes and other things of value, including recreational travel, meals, and entertainment to Petroleos officials to obtain energy contracts or receive payment for previously awarded contracts. Some of the bribes were paid to a Petroleos official’s relative to conceal the nature, source, and ownership of the bribe.

    In total, eight individuals have now pleaded guilty in cases related to the government’s investigation into bribery at Petroleos. The government’s investigation is ongoing. Previous FCPA Scorecard coverage on the Petroleos investigations can be found here.

    Score Card Bribery FCPA Petroleos de Venezuela

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  • Teva Pharmaceuticals Settles FCPA Violations With SEC and DOJ for $519 Million

    On December 22, Teva Pharmaceutical Industries Ltd. announced an agreement with the SEC and DOJ to resolve FCPA violations stemming from conduct in Ukraine, Mexico, and Russia, with a $519 million settlement and a deferred prosecution agreement. Teva will pay more than $236 million in disgorgement and interest to the SEC, the second largest FCPA-related corporate disgorgement to date. As part of its agreement with the DOJ, Teva will pay a $283 million criminal fine and enter into a three-year deferred prosecution agreement under the supervision of an independent compliance monitor.

    Prior Scorecard coverage of the Teva investigation can be found here.

    DOJ SEC Score Card Teva Pharmaceuticals FCPA SEC DOJ

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  • Gabonese National Pleads Guilty to Bribing Government Officials in Africa in Connection with Och-Ziff Mining Operations

    On December 9, 2016, the son of a former Prime Minister of Gabon pleaded guilty to conspiring to make corrupt payments to government officials in Africa in violation of the FCPA. The Gabonese national worked as a consultant for a joint venture between mining company Och-Ziff Capital Management Group LLC (Och-Ziff) and an entity incorporated in the Turks and Caicos. The DOJ charged him with conspiring to pay approximately $3 million in bribes to high-level government officials in Niger, as well as providing them with luxury cars, in order to obtain uranium mining concessions. Similarly, the DOJ also charged him with bribing a high-ranking government official in Chad with luxury foreign travel for the official and his wife in order to obtain a uranium mining concession there. In addition, the DOJ charged him with bribing government officials in Guinea with cash, the use of private jets, and a luxury car in order to obtain confidential government information.

    The guilty plea comes on the heels of Och-Ziff’s $412 million settlement with the DOJ and SEC to resolve related criminal and civil charges of violating the FCPA in connection with the bribery of high-level government officials across Africa. The settlement represented the fourth largest FCPA financial penalty at the time. Och-Ziff’s CEO and former CFO have also previously settled related civil allegations. Prior Scorecard coverage of Och-Ziff’s settlement with the DOJ and SEC may be found here.

    DOJ SEC Score Card Bribery Corruption FCPA SEC DOJ

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  • FCPA Charges Added Against Macau Real Estate Developer and His Assistant

    On November 22, the U.S. government filed a superseding indictment against a Macau real estate developer and his assistant in connection with their alleged involvement in an international bribery scheme. The superseding indictment included new charges that both men violated the FCPA in connection with alleged payments to then-UN ambassadors from Antigua and the Dominican Republic in exchange for official actions to benefit the defendants’ real estate company. The bribery charges contained in the original October 2015 indictment concerned only domestic bribery charges brought under 18 U.S.C. §  666, and not the FCPA.

    It is not clear why the U.S. government chose to add the FCPA charges now as opposed to bringing them in the original indictment. First, there did not appear to be any FCPA jurisdictional hurdles in the original indictment.  Moreover, one of the alleged bribe recipients named in both the original indictment and superseding indictment – the then-UN ambassador from Antigua – is and always was a “foreign official” under the FCPA. The UN has been designated a public international organization, and individuals associated with these organizations are “foreign officials” under the FCPA.

    FCPA Update Score Card Indictment US Dominican Republic Bribery FCPA UN Macau

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  • FORMER UNAOIL EMPLOYEE ADMITS TO PAYING BRIBE FOR LIBYAN GOVERNMENT CONTRACT

    As a follow up to its March 2016 reporting about the Unaoil bribery scandal, the Huffington Post recently published an interview with a former Unaoil employee who has admitted to paying bribes to a manager in Libya’s state-owned oil company in order to win a government contract. Lindsey Mitchell, a former Unaoil manager, told the Huffington Post and the Australian newspaper The Age that in the summer of 2009 he was summoned to a meeting with a production manager at Waha, a subsidiary of the Libyan National Oil Company. At the meeting, the production manager provided Mitchell with details relating to an upcoming bid for a $45 million Libyan government contract. Huffington Post reports that “[t]he next morning, Mitchell called Ata, Cyrus and Saman Ahsani, the father and two sons who ran Unaoil. They were pleased. That afternoon, Martin Abram, a Unaoil manager, met Mitchell at the Unaoil staffhouse to deliver an envelope full of cash” which Mitchell delivered to the Waha manager. A few days later, Mitchell resigned.  It is unclear whether Unaoil ever won the contract though the manager told Mitchell that “he expected a 5-10 percent kickback ― about $2-4 million ― if Unaoil won the contract.” According to the interview, Mitchell has recently been cooperating with U.S., U.K., Australian, and Canadian law enforcement authorities. Unaoil has denied Mitchells’ allegations and denies paying bribes to foreign officials in order to win deals for its multinational clients. Previous Scorecard coverage on the Unaoil investigations can be found here.

    Score Card US News UK Bribery Unaoil

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  • Alstom Pleads Guilty to FCPA Violations; Pays Record Fine

    On December 22, 2014, Alstom S.A. (Alstom), a French power and transportation company, and various subsidiaries pleaded guilty to a range of FCPA violations and agreed to pay a $772 million criminal fine, the largest on record for an FCPA case.  According to DOJ officials, the bribery scheme “spanned many years, occurred in countries around the globe and in several business lines.”  The size of the fine was also no doubt influenced by DOJ’s perception that Alstom was insufficiently cooperative, at least until several of its executives were indicted.

    DOJ Alstom SA Score Card FCPA Enforcement Action France

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  • Alstom Executive’s Motion to Dismiss Indictment Rejected

    On December 29, 2014, the U.S. District Court for the District of Connecticut denied a motion to dismiss the indictment brought by Lawrence Hoskins, a former employee of Alstom S.A., the French power and transportation company that recently pleaded guilty to a massive scheme to violate the FCPA and agreed to a record $772 million criminal fine.  Hoskins was charged in connection with activities involving a Connecticut-based Alstom subsidiary, Alstom Power, Inc.  Alstom Power entered into a Deferred Prosecution Agreement as part of the broader Alstom settlement.

    Hoskins offered several arguments to dismiss the indictment, including that he had left Alstom (and therefore withdrawn from any conspiracy) outside the statute of limitations, that he was not actually an agent of Alstom Power and that the FCPA cannot be applied to purely extraterritorial conduct.  With regard to the withdrawal claim, the court noted that the defendant bears the burden of proving some type of affirmative act of disavowal, not just a mere cessation of activity.  Because the indictment did not contain facts establishing the defense and the government had not made a full proffer of its evidence, the court held that it could not determine pretrial whether the defendant had in fact withdrawn from the conspiracy.  The court also held that a trial was required to resolve Hoskins’s claim that he was not an agent of Alstom Power, noting that “the existence of an agency relationship is a highly factual inquiry” dependent on a number of factors.  Lastly, while Hoskins claimed that the FCPA could not apply to him because he engaged in no conduct in the United States, the indictment alleged “that he used domestic wire transfers to promote the conspiracy.”

    Alstom SA FCPA Update Score Card France

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  • SEC Charges Bruker with FCPA Violations Related to Travel Expenses

    On December 15, 2014, the SEC charged Bruker Corporation (Bruker) with violating the FCPA by making improper payments and paying for non-business-related travel expenses for Chinese government officials. Bruker, a Massachusetts-based global manufacturer of scientific instruments, paid approximately $2.4 million to settle the SEC’s charges. The SEC used an administrative cease-and-desist order to settle the case.

    According to the SEC’s order, Bruker’s China subsidiaries made unlawful payments of approximately $230,000 to Chinese government officials who were employed by state owned entities that were Bruker customers. These payments included payments (i) for non-business travel (reimbursements to Chinese government officials for leisure travel to the United States and numerous European countries) and (ii) pursuant to collaboration and research agreements for which there was no legitimate business purpose. The SEC order found that Bruker violated the internal controls and books and records provisions of the FCPA. Bruker self-reported its misconduct and provided “significant” cooperation to the SEC.

    SEC Score Card China Bruker Corporation

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