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  • Court Reduces Sentence for Former Cayman Islands Soccer Executive Who Pleaded Guilty in International Soccer Association Investigation

    Financial Crimes

    On December 12, Judge Chen of the U.S. District Court for the E.D.N.Y. amended the recent sentence entered against a former general secretary of a Cayman Islands football association. On October 31, he was sentenced to serve 15 months in prison, pay $3 million in restitution, and observe a ban from international soccer organizations. Under the amended sentence, he was credited 10 months for time served in a Swiss jail prior to extradition; the other terms remained the same. 

    He was arrested in Zurich in 2015, as part of the U.S. government’s investigation into corruption involving an international soccer association. Earlier this year, he pleaded guilty to a conspiracy charge, admitting that he laundered millions of dollars in bribes from sports marketing companies to his longtime associate and the former president of a continental soccer association. He is the second individual sentenced among a group of more than 40 who have been indicted or pleaded guilty since 2015. Previous FCPA Scorecard coverage of the investigation can be found here.

    Financial Crimes Anti-Money Laundering Bribery

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  • DOJ Charges Head of Organization Backed by Chinese Energy Conglomerate and Former Foreign Minister of Senegal With Bribing High-Level Officials in Chad and Uganda

    Financial Crimes

    On November 20, the DOJ unsealed a criminal complaint charging two people (collectively, the “Defendants”) with participating in a multi-year, multimillion-dollar scheme to bribe high-level officials in Chad and Uganda in exchange for business advantages for a Shanghai-based energy conglomerate (the “Energy Company”). One of the Defendants is the head of a non-governmental organization based in Hong Kong and Virginia that holds “Special Consultative Status” with the United Nations Economic and Social Council. The Energy NGO is funded by the Energy Company. The other Defendant is the former Foreign Minister of Senegal and operated an international consulting firm. The DOJ charged the Defendants with (i) conspiring to violate the FCPA, (ii) violating the FCPA, (iii) conspiring to commit international money laundering, and (iv) committing international money laundering. The Defendants have both been arrested and presented before Magistrates. 

    The DOJ alleges that the Defendants conspired to bribe African government officials on behalf of the Energy Company. Specifically, the DOJ alleges that in an effort to secure oil rights from the Chadian government, the Defendants offered a $2 million bribe to the President of Chad – and in return, the Defendants secured exclusive oil rights without competition. The Defendants allegedly wired almost a million dollars through New York’s banking system in furtherance of their scheme. One of the Defendants also allegedly provided Ugandan officials with gifts and promises to share profits derived from the Energy Company.

    Financial Crimes DOJ Bribery FCPA

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  • Two Former Dutch Oil and Gas Services Company Executives Plead Guilty to FCPA Violations

    Financial Crimes

    The DOJ announced last week that two former executives of a Dutch oil and gas services company pleaded guilty in U.S. District Court for the Southern District of Texas. The company's CEO from 2008 to 2011 and a former U.S.-based sales and marketing executive, admitted their involvement in a scheme to bribe government officials in Brazil, Angola, and Equatorial Guinea. The government’s allegations relate to payments made and kickbacks provided to foreign officials in exchange for their assistance in securing contracts in those countries.

    The former U.S.-based sales and marketing executive is scheduled for sentencing on January 31, 2018, and the company's former CEO is scheduled for sentencing on February 2, 2018.

    Click here for FCPA Scorecard’s prior coverage of this matter.

    Financial Crimes DOJ Bribery

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  • Florida Energy Company Owner Pleads Guilty to Conspiracy to Violate the FCPA in Venezuelan Bribery Scheme

    Financial Crimes

    On October 11, the DOJ announced that the co-owner of several Florida-based energy companies pleaded guilty to FCPA charges that he conspired to bribe foreign officials in exchange for obtaining contracts from a Venezuela’s state-owned energy company. In his plea, the defendant admitted to conspiring with two other individuals from 2008 through 2014 to bribe purchasing analysts employed by the energy company through cash payments and other entertainment in order to win contracts for their companies. In total, ten individuals have now pleaded guilty in connection with the scheme.    

    This investigation has been a collaboration between the DOJ, ICE-HSI, and IRS-Criminal Investigation Division. Previous FCPA Scorecard coverage of the investigation can be found here.

    Financial Crimes DOJ FCPA Bribery International

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  • South Korean Earthquake Research Official Sentenced for Laundering Bribes

    Financial Crimes

    On October 2, the former director of the earthquake research center of South Korea’s Institute of Geoscience and Mineral Resources was reportedly sentenced in U.S. federal court to 14 months in prison for laundering bribes he had received in South Korea from seismology companies. Prosecutors argued to the federal jury, which convicted him in July, that he had demanded and received more than $1 million in bribes from two seismological companies in exchange for providing them with insider information and directed some of the funds to be transferred to his personal bank account in California.

    The former director has not been charged in South Korea, and his conviction and sentencing in the United States illustrate the US DOJ’s continued focus on targeting foreign officials who receive bribes and then travel to the US or use its financial system.

    Financial Crimes DOJ Anti-Money Laundering Bribery

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  • Swedish Telecom Company to Pay $965 Million to DOJ and SEC to Settle Bribery Claims

    Financial Crimes

    On September 21, a Swedish telecom company agreed to pay $965 million as a result of criminal and civil actions brought by the DOJ and SEC charging the company with paying bribes to an Uzbek government official from 2007 to 2010. The company entered into a deferred prosecution agreement with the DOJ that required the company to pay a $548.6 million criminal penalty for violating the anti-bribery provisions of the FCPA, $274 million of which will be paid to the Swedish Prosecution Authority and credited by the DOJ. $40 million of the total criminal penalty consisted of forfeiture by the company on behalf of its indirect subsidiary. According to the criminal information, around 2007, the company began operating a mobile telecommunications business in Uzbekistan through the subsidiary, and the companies allegedly then conspired to make approximately $331 million in bribes to an Uzbek government official to expand their share of the telecommunications market. 

    On the same day, the SEC issued a cease-and-desist order finding that the company violated the anti-bribery and internal accounting controls provisions of the FCPA and ordering the company to disgorge $457 million in illicit profits (but also agreeing to credit up to half that amount if disgorged to the Swedish Prosecution Authority). The SEC found that over the relevant time period, the company “paid bribes to a government official in Uzbekistan in order to obtain and retain business that generated more than $2.5 billion in revenues.” It found that the company paid the Uzbek official $330 million in bribes “funneled through payments for sham lobbying and consulting services to a front company controlled by the official.” The SEC agreed that the $40 million forfeiture to the DOJ would also offset.

    Financial Crimes DOJ SEC Bribery FCPA

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  • FCPA Sting Operation Results in Conspiracy Charge for Retired U.S. Army Colonel

    Financial Crimes

    On August 29, the DOJ announced that it had unsealed a criminal complaint and FBI affidavit charging a retired U.S. Army colonel “for his alleged role in a foreign bribery and money laundering scheme in connection with a planned $84 million port development project in Haiti.” The DOJ alleges that he solicited bribes “from undercover [FBI] agents in Boston who posed as potential investors,” telling the agents “that he would funnel the payments to Haitian officials through a non-profit entity that he controlled . . . in order to secure government approval of the project.” The retired colonel allegedly received a $50,000 payment from the FBI, which he wired to his non-profit organization. While he ultimately used the payment for personal purposes, rather than his promised bribery, he allegedly “intended to seek additional money from the undercover agents to use for future bribe payments in connection with the port project.” The DOJ also alleges that FBI agents intercepted telephone calls where he “discussed bribing an aide to a senior Haitian official by giving him a job on the port development project after he left his position.”

    FCPA sting operations are relatively rare. An infamous FCPA sting operation involving Africa resulted in charges for 22 defendants, but it concluded unsuccessfully in 2012 after a series of acquittals and hung juries caused the DOJ to dismiss the remaining indictments.

    Financial Crimes DOJ Bribery Anti-Money Laundering

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  • Swedish Prosecutor Charges Russian Sales Executive with Bribery of Azerbaijan Officials

    Financial Crimes

    On Friday, August 18, a Russian employee of a Swedish branch of a Canadian producer of aircraft and train equipment, was charged by a Swedish prosecutor with aggravated bribery. The 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. The executive 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, the company 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 the company and selling the identical equipment to the company's Azerbaijan affiliate for a profit. According to export records reviewed by the OCCRP, the equipment was delivered directly from the company to Azerbaijan. The report identified the UK intermediary, which, according to an earlier OCCRP report is alleged to have ties to the former president of a russian railways company, and is alleged to have had similar involvement in a contract with the company and Russia.

    Financial Crimes Anti-Corruption Bribery

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  • Macau Real Estate Developer Convicted of Violating FCPA

    Financial Crimes

    On July 27, 2017, a federal jury in the Southern District of New York convicted a Macau real estate developer of bribery, money laundering, and conspiracy, for his role in a widespread plan to bribe United Nations officials in order to establish a new conference facility in Macau. Five other defendants have also been charged; four have pleaded guilty, and one passed away. A sentencing date has not yet been set.

    As pointed out on the FCPA Professor, this is a significant win for the DOJ because it marks the first time since 2011 that the DOJ has successfully taken an FCPA case to verdict. Our additional coverage of this matter can be viewed here.

    Financial Crimes Anti-Money Laundering Bribery

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  • International Oil Field Service Company Agrees to Settle FCPA Claim for $29 Million in Disgorgement and Penalties

    Financial Crimes

    An international oil field service company recently settled allegations that the company improperly steered business to the friend of an Angolan official in exchange for that official awarding various oil contracts to the company. In total, the company agreed to pay the SEC $29.2 million, comprising $14 million in disgorgement, $1.2 million in prejudgment interest, and a $14 million penalty. The company’s former vice president also agreed to pay the SEC a $75,000 penalty related to these violations and other accounting irregularities.  

    This is the most recent settlement in a series of FCPA enforcement actions focusing on the company’s procurement processes and operations in various countries. A former subsidiary of the company settled similar FCPA allegations in 2009 related to alleged bribes paid to Nigerian officials to procure contracts in that country.    

    This settlement also highlights the role of whistleblowers in driving FCPA and other enforcement actions. A whistleblower employed by the company first alerted the company to potential FCPA issues in 2010, which resulted in the launching of an investigation into the allegations.

    Financial Crimes FCPA SEC Disgorgement Bribery Whistleblower

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