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  • Former Swiss Bank Executive Pleads Guilty in FIFA Investigation

    Financial Crimes

    On June 15, the U.S. Attorney’s Office for the Eastern District of New York announced that a citizen of Argentina and a former managing director of a Swiss Bank 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, the former managing director 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.

    Financial Crimes Anti-Money Laundering Bribery FIFA

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  • Former Mining Company Management Group Consultant Sentenced to Two Years in Prison

    Financial Crimes

    On May 31, the son of a former Prime Minister of Gabon, a former consultant to a joint venture between a mining company management group and an entity incorporated in the Turks and Caicos, was sentenced to two years in prison for conspiring to violate the FCPA by bribing government officials in several African countries. 

    As previously reported here, the former consultant previously pleaded guilty to allegations related to payments of approximately $3 million to high-level government officials in Niger, in addition to providing luxury cars, in order to obtain uranium mining concessions. Similarly, the DOJ charged him with bribing a high-ranking government official in Chad with luxury foreign travel to obtain a uranium mining concession there, and with bribing government officials in Guinea with cash, the use of private jets, and a luxury car in order to obtain confidential government information. Prior Scorecard coverage regarding the mining company management group is here.

    Financial Crimes DOJ Bribery

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  • Ukrainian Billionaire Files Motion to Dismiss Indictment

    Financial Crimes

    A 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. The billionaire 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 the billionaire was extradited earlier this year. See previous Scorecard coverage here.

    The billionaire’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 the billionaire’s coconspirators, but not the billionaire 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, the billionaire claims that the indictment fails to allege that any of these contacts have any connection to the alleged bribery scheme and that he 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 Hungarian telecommunications company 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 the billionaire’s motion to dismiss will shed further light on the jurisdictional standard.

    Financial Crimes RICO Bribery Indictment

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  • Reports: American Multinational Retailing Corporation Nearing Resolution of Bribery Probe

    Financial Crimes

    Bloomberg reports that an American multinational retailing corporation 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 subsidiary of the company, 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 the company's 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 the company’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.

    Financial Crimes DOJ SEC Bribery

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  • Former Guinean Mining Minister Convicted on Bribery and Money Laundering Charges

    Financial Crimes

    A former Guinean mining minister was found guilty earlier this week on bribery and money laundering charges following a seven-day jury trial in Manhattan federal court. He was charged with receiving and laundering $8.5 million in bribes allegedly for securing mining rights for two Chinese companies. 

    The conviction came one day after the former minister took the stand in his own defense and admitted to lying to banks about his status as a government official, as well as failing to report the payments on his IRS tax return.

    The conviction also follows other notable enforcement actions involving the mining industry in the Republic of Guinea. Earlier this year, the SEC charged former asset management executives with bribing government officials across Africa to secure mining deals, including in Guinea.

    Financial Crimes SEC Bribery Anti-Money Laundering

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  • Senators Introduce Combating Global Corruption Act of 2017

    Financial Crimes

    Senator Ben Cardin and Republican co-sponsors recently introduced a bill titled the “Combating Global Corruption Act of 2017,” which seeks “to identify and combat corruption in countries, to establish a tiered system of countries with respect to levels of corruption by their governments and their efforts to combat such corruption, and to assess United States assistance to designated countries in order to advance anti-corruption efforts in those countries and better serve United States taxpayers.”

    This bill, if enacted, would require the Secretary of State to publish annual rankings of foreign countries split up into three tiers that depend on whether those countries’ governments comply with “minimum standards for the elimination of corruption.” The introduced bill defines corruption as “the exercise of public power for private gain, including by bribery, nepotism, fraud, or embezzlement.”

    Once a country’s tier-rank is established, the bill would then require the Secretary of State, Administrator of USAID, and the Secretary of Defense to take various steps, including the creation of a “corruption risk assessment” and “corruption mitigation strategy” for U.S. foreign assistance programs; fortified anti-corruption and clawback provisions in contracts, grants and other agreements; disclosure of beneficial ownership for contractors and other participants; and mechanisms to investigate misappropriated funds.

    If passed into law, this bill would create substantial new enforcement powers to combat international corruption activities. And, unlike the current ambiguity under the FCPA regarding its applicability to state-owned or state-controlled enterprises (“SOEs”), as drafted, this bill expressly would cover SOEs. Like the FCPA, however, this bill also contains a broad national security waiver component, if the Secretary of State “certifies to the appropriate congressional committees that such waiver is important to the national security interest of the United States.”

    Financial Crimes Anti-Corruption FCPA Bribery Fraud

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  • South Korea’s Former President Formally Indicted on Corruption Charges

    Financial Crimes

    On April 17, the former South Korean president was formally indicted on 18 charges of corruption including bribery, extortion, abuse of power, and leaking state secrets. The former president was impeached in December after months of public protests. Last month, she was removed from office and arrested.

    The corruption scandal has also implicated the former president’s longtime confidante, who is currently on trial on corruption charges. The pair is accused of coercing Korean businesses into donating $68 million to two non-profit foundations that the former president’s confidante controlled. They are both also accused of collecting or demanding $52 million in bribes from businesses, including $38 million from a Korean multinational conglomerate, $6.2 million from a retail conglomerate, and $7.8 million from a telecommunications and semiconductor conglomerate. The chairman of the retail conglomerate, was indicted on bribery charges on Monday.

    Financial Crimes FCPA Anti-Corruption Bribery

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  • FINRA Bars Broker Charged in NY Pension Fund Scandal

    Securities

    On March 28, FINRA filed a disciplinary action in the form of a Letter of Acceptance, Waiver and Consent (Letter of Acceptance) against one of the brokers charged in December of last year for participating in a "pay-for-play" bribery scheme involving the $184 billion New York State Common Retirement Fund (NYSCRF). The Letter of Acceptance bars the broker from the industry and prohibits association with “any FINRA member in any capacity.” From 2014 through 2016, the broker, along with two other individuals, engaged in a scheme to defraud the pension fund, its members and beneficiaries, by paying bribes to a portfolio manager totaling more than $100,000 in the form of entertainment, travel expenses, narcotics, luxury gifts, and other items in “exchange for fixed-income business from the NYSCRF.” The broker was charged with allegedly conspiring to commit securities fraud, conspiring to obstruct justice in a Securities and Exchange Commission investigation, as well as wire fraud charges. Currently the SDNY criminal case and SEC civil action are pending against the broker.

    Securities FINRA Bribery

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  • Former Thailand Tourism Chief Sentenced to 50 Years for Accepting Bribes

    Financial Crimes

    On March 29, the former governor of the Tourism Authority of Thailand was reportedly sentenced in Thailand to 50 years in prison for accepting $1.8 million in bribes from 2002 to 2007 from two U.S. filmmakers in exchange for rights to organize the Bangkok International Film Festival. The former tourism chief was also ordered to forfeit the bribe money. Her daughter received a 44-year prison sentence for her own involvement. In 2009, the U.S. filmmakers, who paid the bribes, were convicted in the U.S. on charges of FCPA violations. A U.S. federal court sentenced the filmmakers to six months incarceration, three years of supervised release, and $250,000 in restitution. 

    The former tourism chief and her daughter were also indicted in the U.S. in January 2009 for the same underlying conduct. The indictment raised interesting questions about the United States pursuing corruption on the “demand side,” in light of the fact that the FCPA does not criminalize the receipt of bribes. The indictment instead alleged money laundering violations and related charges. The former tourism chief moved to dismiss the U.S. indictment based on the double jeopardy provision of the Thai-US extradition treaty. The decision on her motion was stayed, pending the outcome of the Thai prosecution.

    Financial Crimes FCPA Anti-Corruption Bribery

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  • Netherlands-Based Financial Services Company Under Investigation by Dutch and U.S. Authorities for Activities Relating to a Russian Telecom Company

    Financial Crimes

    In an annual report filed with the SEC on March 20, 2017, a Netherlands-based financial services company, stated that it is under criminal investigation by Dutch authorities “regarding various requirements related to the on-boarding of clients, money laundering, and corrupt practices,” and that it has also received “related information requests” from U.S. authorities.  A spokesperson for the Dutch prosecutor reportedly expressed suspicion that the company failed to report irregular transactions and may have enabled international corruption, including unusual payments made by a Russian telecom company to a government official in Uzbekistan through a shell company.  The russian company settled bribery charges with the U.S. and Dutch governments in February 2016, admitting to paying bribes amounting over $114 million to an Uzbek official and agreeing to pay over $397 million in penalties to the DOJ and SEC for violations of the FCPA.  The financial services comapny stated that it is cooperating with the ongoing investigations and requests of Dutch and U.S. authorities.

    Financial Crimes Anti-Money Laundering Bribery Anti-Corruption

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