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  • Another executive arrested in Venezuelan energy company bribery case

    Financial Crimes

    On August 1, DOJ announced the arrest of a dual U.S.-Venezuelan citizen on foreign bribery charges for making and conspiring to make corrupt payments to an official of a Venezuela’s state-owned energy company. He was arrested at Miami International Airport on an arrest warrant based on a criminal complaint in the Southern District of Texas, which was unsealed on July 31. He made an initial appearance before a magistrate judge in the Southern District of Florida.

    According to the criminal complaint, the citizen and a co-conspirator paid at least $629,000 in bribes to a former company official in exchange for favorable business treatment for his companies, including: (1) directing company contracts to his companies, (2) giving his companies priority over other vendors to receive payments, and (3) awarding his companies contracts in U.S. dollars rather than Venezuelan bolivars.

    DOJ has announced charges against 17 individuals, including the citizen, as part of its investigation into bribery at the company. 12 individuals have pleaded guilty.

    Financial Crimes DOJ FCPA Bribery

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  • Latest conviction in Venezuelan oil company bribery case

    Financial Crimes

    On July 16, 2018, a dual U.S.-Venezuelan citizen pleaded guilty to one count of conspiracy to violate the FCPA and one count of conspiracy to commit money laundering. The citizen’s convictions relate to allegations that he bribed officials at Venezuela’s state-owned oil company and laundered money for bribes to other company employees. FCPA Scorecard provided earlier coverage of this case here.

    The citizen admitted to soliciting and directing bribes from two U.S. citizens in exchange for securing payment priority for their companies from the oil company and for awards of the company's contracts. The citizen also admitted to conspiring with these individuals to launder and conceal the proceeds of the scheme through a series of financial transactions, including wire transfers to offshore accounts. Sentencing is scheduled for September 24.

    His conviction underscores how wide investigations can become as the DOJ continues pulling threads and obtaining guilty pleas. The DOJ has charged 15 defendants in the company's cases, 12 of whom have pleaded guilty to date, including the citizen. The DOJ also credited the assistance of the Swiss Federal Office of Justice and the Spanish Guardia Civil.

    Financial Crimes DOJ FCPA Anti-Money Laundering Bribery

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  • Paris-based multinational bank settles FCPA allegations concerning bribery of Libyan officials

    Financial Crimes

    On June 4, the DOJ announced that a Paris-based multinational bank and its wholly owned subsidiary agreed to pay $585 million to resolve charges in the United States and France involving bribes to Libyan officials. According to the DOJ, the bank will enter into a deferred prosecution agreement related to charges of conspiracy to violate the FCPA’s anti-bribery provisions. The bank’s subsidiary will also plead guilty in the Eastern District of New York to similar charges. Almost $293 million of the resolution will be paid to France and credited by the U.S. This is the first coordinated anti-bribery enforcement action by the DOJ and French authorities. 

    The bank admitted that it had paid over $90 million in bribes through a Libyan broker in connection with 14 investments made by state-owned financial institutions in Libya. For each transaction, the bank paid the Libyan broker a commission, some of which the Libyan broker then paid to high ranking Libyan officials to secure the investments for the bank from the state institutions. This scheme resulted in the bank obtaining 13 investments and one restructuring from the Libyan state institutions, and earning approximately $523 million in profits. The scheme also involved payments for the benefit of a a Baltimore-based investment management firm subsidiary; the firm resolved its FCPA issues with the DOJ on the same day.

    As part of the same deferred prosecution agreement, the bank also agreed to pay $275 million to resolve charges arising from manipulation of U.S.-dollar and Japanese yen LIBOR.

    Financial Crimes DOJ Bribery

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  • Macau real estate developer sentenced for bribing UN officials

    Financial Crimes

    On May 11, Judge Vernon S. Broderick of the SDNY sentenced a Macau real estate developer to 48 months in prison and ordered him to pay a $1 million fine, $302,977 in restitution, and forfeiture of $1.5 million.  In July 2017, a jury convicted the developer of two counts of violating the FCPA, one count of paying bribes and gratuities, one count of money laundering, and two counts of conspiracy.  The conduct centered on the developer’s role in bribing UN officials in order to build a new multi-billion dollar conference center in Macau.   

    Five other defendants have been charged; four have pleaded guilty to various charges, and one passed away and the charges against him were dismissed.  Of the guilty pleas, two are awaiting sentencing.  The other two received sentences of seven months (conspiracy to defraud the United States) and 20 months (bribery).

    Prior Scorecard coverage of this matter can be viewed here.

    Financial Crimes International FCPA Bribery

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  • Former Venezuelan official pleads guilty in bribery scheme

    Financial Crimes

    The DOJ announced on April 19, that a former Venezuelan official had pleaded guilty to one count of conspiracy to commit money laundering. The charge arose from the former official’s role in a bribery scheme involving bribes paid by the owners of U.S. companies to Venezuelan government officials to secure energy contracts and payments on outstanding invoices. As the former general manager of a procurement subsidiary of a Venezuelan state-owned energy company, he had solicited and accepted bribes. The judge entered a personal money judgment of $7,033,504.71. As a government official receiving the bribes, he could not be charged himself with FCPA offenses (which are targeted at those paying the bribes). Related charges against four other individuals remain pending, including charges of conspiracy to violate the FCPA; 11 individuals have already pleaded guilty in previous cases.  

    For prior coverage of the company's enforcement actions, please see here.

    Financial Crimes DOJ Bribery FCPA Anti-Money Laundering

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  • FCPA class action against Brazilian aerospace firm dismissed

    A class action against a 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 the firm 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 the firm’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 the firm’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. The firm 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.

    DOJ SEC FCPA Class Action Bribery

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  • Former media executive pleads guilty to bribing UN official

    Financial Crimes

    A Chinese-born naturalized U.S. citizen reportedly pleaded guilty this week to violations of the FCPA related to a scheme to bribe the UN General Assembly’s former president. The citizen is a former executive of a media group that focused on promoting UN development goals, but she was accused of paying the bribe to secure diplomatic postings. She pleaded guilty this week in the SDNY to three counts, including violating and conspiring to violate the FCPA, as well as income tax fraud. 

    The charges relate to her payment of $500,000 to the former president in April 2013 in exchange for receiving a diplomatic posting within the government of Antigua, where the former president previously served as a UN representative. She is just the most recent in a line of other individuals who have faced FCPA repercussions for bribes paid to the former president (who died in 2016), including a Chinese real estate businessman, who was found guilty of paying the fromer president and another individual bribes worth at least $1 million, and a former head of a New York-based foundation who also pleaded guilty to paying the former president bribes in excess of $800,000. As part of the citizen's plea, she admitted that she had failed to report approximately $2 million in income to the IRS.

    This guilty plea illustrates how prosecutors are able to unwind even complex bribery schemes by methodically targeting individual participants. The criminal charges against her were likely bolstered by the string of preceding bribery cases involving similar payments to the former president that likewise resulted in a guilty pleas and verdicts.

    Financial Crimes Bribery FCPA

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  • Second executive pleads guilty to FCPA violations in a German engineering company case involving bribes in Argentina

    Financial Crimes

    On March 15, a former executive of a German engineering company subsidiary, pleaded guilty in the U.S. District Court for the Southern District of New York to conspiracy to violate the Foreign Corrupt Practices Act, including conspiracy to commit bribery, falsify corporate books and records, circumvent internal controls, and commit wire fraud. According to the DOJ press release, the executive “admitted that he and his co-conspirators concealed the illicit payments through various means, including using shell companies associated with intermediaries to disguise and launder the funds.” He was indicted with seven others in 2011.

    He was part of a decade-long scheme during which the company paid tens of millions of dollars in bribes to Argentine government officials to secure a contract to create national identity cards. A subsidiary of the company was awarded a contract worth more than $1 billion to provide the ID cards in 1998. The Argentine government ended the project in 2001. Since then, the company and its employees have faced prosecutions and enforcement actions around the world as a result of the bribes and related conduct. The company pleaded guilty in the U.S. to violating the books and records provisions of the FCPA in 2008 for its conduct, and subsidiaries in Argentina and other countries pleaded guilty to similar crimes. The company also paid $350 million to resolve an SEC case and paid a fine of $800 million to resolve charges brought by the Munich Public Prosecutor’s Office.

    Prior FCPA Scorecard coverage of the case can be found here, here, here, and here.

    Financial Crimes DOJ FCPA Bribery

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  • Maryland-based company enters deferred prosecution agreement for violations of FCPA antibribery provisions

    Financial Crimes

    On March 13, a Maryland federal court unsealed bribery-related charges filed in January 2018 against a Maryland-based company (part of a French industrial supplier), as well as a three-year deferred prosecution agreement filed on March 12. The government alleges that the company conspired to violate the FCPA by arranging and paying bribes to Russian officials to obtain uranium transportation contracts between 2004 and 2014. Pursuant to the deferred prosecution agreement, the company agreed to pay a $2 million criminal fine, adopt a compliance program, and provide periodic reporting to DOJ. According to the agreement, the company received credit for its substantial cooperation with the investigation and for its remedial actions, including firing all employees involved in the criminal conduct.

    As previously covered here, in 2015 three individuals entered into guilty pleas in this matter: a former Russian official based in Maryland; a former co-president of the company; and an alleged intermediary between the company and the Russian official. Most recently and as covered here, the other former co-president of the company, was charged in an 11-count indictment, unsealed in January 2018, alleging numerous violations of the FCPA and conspiracy to violate the FCPA.

    Financial Crimes DOJ FCPA Bribery

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  • Houston-based energy company sues former Venezuelan government officials for bribery related conduct related to national oil company

    Financial Crimes

    On February 16, 2018, a Houston-based energy corporation that formally dissolved in May 2017 filed suit in the Southern District of Texas against two former presidents of a Venezuelan national oil company and others who allegedly worked for them. According to the complaint filed by the energy company, Venezuela’s Ministerio del Poder Popular de Petroleo y Mineria twice refused to allow the company to sell energy assets co-owned with the oil company because the energy company refused to pay bribes requested by the defendants. According to the energy company, the denials forced the company to sell the same assets at a loss of $470 million. The energy company has sued the defendants alleging civil violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), the Sherman Act, the Robinson-Patman Act, and the Texas Free Enterprise and Antitrust Act.

    This suit was filed days after the DOJ unsealed charges against five former Venezuelan government officials for their involvement in a money laundering scheme at the oil company. Previous FCPA Scorecard coverage of the ongoing DOJ and ICE-HIS investigation into bribery at the national oil company can be found here.

    Financial Crimes DOJ RICO Bribery

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