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  • Ukrainian Billionaire Files Motion to Dismiss Indictment

    Dmiitry Firtash, the Ukrainian billionaire indicted in 2013 for his alleged role in a conspiracy to bribe government officials in India to permit the mining of titanium minerals, filed a motion to dismiss the indictment on May 9 in a federal district court in Illinois. Firtash also faces money laundering and RICO charges along with five alleged coconspirators. In 2015, an Austrian court denied the United States’ extradition request, but that decision was eventually reversed and Firtash was extradited earlier this year. See previous Scorecard coverage here.

    Firtash’s motion to dismiss focuses on the lack of jurisdictional contact between the charged conduct and the United States. It vigorously challenges the jurisdictional basis alleged in the indictment, which was that Firtash’s coconspirators, but not Firtash himself, transferred money through United States correspondent banks, traveled to the United states, and used email accounts and cellular phones hosted on servers in the United States. However, Firtash claims that the indictment fails to allege that any of these contacts have any connection to the alleged bribery scheme and that Firtash himself never entered the United States in connection with the charged conduct, and never made or received any phone calls or sent or received any emails regarding the allegations in the indictment.

    The amount and quality of contacts with the United States required to support jurisdiction under the FCPA is a frequently contested issue. The United States has repeatedly taken the position that jurisdiction is proper even where the wrongful conduct took place outside the United States and did not involve any United States companies or citizens, so long as there was some contact with the United States. For example, in the recent Magyar Telekom cases, emails sent through servers hosted in the United States were held to be sufficient to support jurisdiction. See previous Scorecard coverage here. The outcome of Firtash’s motion to dismiss will shed further light on the jurisdictional standard.

    Indictment India RICO Bribery Magyar Telekom

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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 Owner of Pennsylvania Financial Consulting Group Charged with Bribery

    On January 6, a federal grand jury in Pennsylvania returned a 14-count indictment charging the former owner of the Chestnut Group financial consulting companies with bribing an official of the European Bank for Reconstruction and Development (EBRD).  EBRD is a multilateral development bank owned by 64 sovereign nations that “fosters transition to market economies in countries from central and eastern Europe to central Asia and the southern and eastern Mediterranean.”

    According to the indictment, Dmitrij Harder, a Russian national, paid $3.5 million in bribes to the sister of the EBRD official in order to influence the official’s actions on financing applications submitted by two separate clients of the Chestnut Group.  The indictment alleges that the two clients, both of which conducted oil-and-gas operations in Russia, retained Chestnut Group “despite its relatively small size, distant location from the EBRD, and unproven track record as a financial advisor.”  The EBRD approved the two applications.  Thereafter, the Chestnut Group made payments to the EBRD official’s sister, who was retained as a consultant but actually provided no services to the Chestnut Group.

    The indictment alleges violations of the Foreign Corrupt Practices Act, the Travel Act, the money laundering statute and conspiracy.  Mr. Harder’s attorney has disputed the charges in media reports.

    Indictment Russia Chestnut Group

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  • GlaxoSmithKline Ordered to Pay Almost $490 Million By Chinese Court For Alleged Bribery

    On September 19, according to media reports, a Chinese court ordered the Chinese subsidiary of GlaxoSmithKline, the UK-based pharmaceutical company, to pay approximately $487 million related to alleged bribery of hospitals and doctors.  Five of Glaxo’s managers were also convicted after entering guilty pleas, and Glaxo’s former country manager was ordered to be deported.  Glaxo apologized for the conduct in a statement.  Glaxo’s Chinese subsidiary was alleged to have bribed hospitals and their doctors to boost prescriptions of Glaxo products, including through payment of large travel and entertainment expenses and other fees, leading to over $150 million in additional revenue.

    The Glaxo case involves many of the key areas currently affecting anti-corruption practitioners and compliance personnel.  For example, allegations were first raised by a whistleblower in 2013, and investigations regarding bribery of foreign state-owned hospitals or their doctors have been rising in the past few years.  Here, while the full facts are not yet clear, Glaxo has stated that only commercial (business to business) bribery was at issue, characterizing the conduct at issue as “offer[ing] money or property to non-government personnel in order to obtain improper commercial gains, and . . . bribing non-government personnel.”

    China Indictment News Whistleblower Pharmaceutical

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  • DOJ Announces Anti-Bribery Indictments of Oil Services Company’s Former Executives

    On January 6, the U.S. Department of Justice (DOJ) announced that two former CEOs of an oil and gas services company had been charged for their alleged involvement in a scheme to violate the anti-bribery provisions of the FCPA and for other related offenses.  The DOJ also revealed that the company’s former general counsel had entered a guilty plea on bribery and fraud charges related to the alleged schemes.  According to two separate Criminal Complaints that were filed in the U.S. District Court for the District of New Jersey, the former CEOs allegedly paid bribes to a Colombian official for his assistance in securing approval of a contract valued at approximately $39 million.  They were also charged with attempting to defraud members of the company’s board through their attempts to secure kickbacks for themselves as part of an effort to acquire another firm.  The Information filed against the former GC provided further details on the bribery and kickback schemes.

    DOJ Indictment Oil and Gas Services

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  • Score Card: US DOJ Indicts Eight Former Siemens Executives

    US DOJ indicts eight former Siemens executives as US SEC charges seven, in continuation of long-running FCPA enforcement action.

    DOJ SEC Siemens AG Score Card Indictment

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