Articles Posted in Foreign bribes

A retired U.S. Army colonel was charged in a complaint unsealed today for his alleged role in a foreign bribery and money laundering scheme in connection with a planned $84 million port development project in Haiti.  Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney William D. Weinreb of the District of Massachusetts, Assistant Director Stephen Richardson of the FBI’s Criminal Investigative Division and Special Agent in Charge Harold M. Shaw of the FBI’s Boston Field Office made the announcement.

Joseph Baptiste, 64, of Fulton, Md., was arrested this morning on a criminal complaint filed in the District of Massachusetts.  He was charged with one count of conspiracy to violate the Foreign Corrupt Practices Act and to launder money.

The complaint alleges that Baptiste solicited bribes from undercover agents in Boston who posed as potential investors in infrastructure projects in Haiti, in connection with a proposed project to develop a port in the Moles Saint Nicolas area of Haiti.  According to the complaint, the proposed project was expected to cost approximately $84 million, and was to involve the construction of multiple cement factories, a shipping-vessel recycling station, an international transshipment station with numerous slips for shipping vessels, a power plant, a petroleum depot and tourist facilities.  The complaint alleges that Baptiste told the agents, in a recorded meeting at a Boston-area hotel, that he would funnel the payments to Haitian officials through a non-profit entity that he controlled — which was based in Maryland and purported to help impoverished residents of Haiti — in order to secure government approval of the project.

There has been a significant increase in the number and amount of bribes of foreign officials and their families by American businesses and their subsidiaries to get new business in other countries. Part of the reason may be tied to a decrease in US and Western European military spending so companies are relying on sales to foreign governments and are using bribes as a door opener for that business. However, the Department of Justice has announced that it will vigorously investigate and prosecute cases of foreign bribery to enforce the Foreign Corrupt Practices Act(FCPA).

In 2016, there were fouor major FCPA enforcement actions: Teva Pharmaceutical (Israel) $519 million; Odebrecht (Brazil); Och-ziff (United States) $412 million and VimpelCom (Holland) $397.6 million.

In one case, Three Texans and a Mexican businessman pleaded guilty to paying more than $2 million in bribes to Mexican officials for government-aircraft maintenance contracts. Kamta Ramnarine, 69, of Brownsville, is the former owner and general manager of Hunt Pan Am Aviation Inc., which provides airplane maintenance and fueling services at Brownsville-South Padre International Airport. Daniel Perez, 69, also of Brownsville, owned a stake in Hunt Pan Am Aviation from 1993 to 2010, according to federal charges unsealed Dec. 20 and publicized Tuesday by federal prosecutors.

According to a report by Trace International, over 126 investigations of foreign bribes by US companies have been engaged.The report also noted an increase of U.S. bribery enforcement in the category of manufacturers and service providers. The report also found twice the number of investigations by countries policing their own officials for alleged bribery in 2015 as there were total domestic bribery cases from 1977 to 2015. This reflects a substantial increase in the scrutiny and prosecution of such bribes which makes fair competition impossible.

According to  Trace, there were just four non-U.S. anti-bribery enforcement actions in 2015, down from 15 the year before, while the U.S. carried the lion’s share of enforcement with 16 cases. Trace president Alexandra Wrage says  we know there was a drop in the number of non-U.S. enforcement actions related to foreign bribery, the data also show that roughly the same number of ongoing investigations are being conducted by non-U.S. authorities as are being conducted by the U.S.,

Last year the Department of Justice announced that it was adding  a dozen new prosecutors to [rpsecute foreign bribery. Assistant Attorney General Leslie Caldwell told a conference on the Foreign Corrupt Practices Act that the Justice Department is looking to hire 10 prosecutors to its own FCPA unit. That amounts to a 50 percent increase to its current headcount, Caldwell said, and comes on top of moves earlier this year to attach squads of prosecutors to theFBI‘s international corruption unit.

According to the Wall Street Journal, beer maker Anheuser-Bush InBev  exited a joint venture in India that was under scrutiny in the U.S. for potential violations of foreign bribery law.

In a securities filing the company said it ended ties in February with a joint venture in India that is the subject of a U.S. investigation into potential violations of the Foreign Corrupt Practices Act, which bars bribery of foreign officials to get or keep business.  U.S. authorities are investigating AB’s Indian affiliates, including the joint venture, and whether relationships of agents and employees complied with the FCPA.

AB also said that the Securities and Exchange Commission told the firm it was investigating its affiliates in India.

Goodyear Tire & Rubber Co. has paid $16 million to settle charges by the U.S. Securities and Exchange Commission that it violated the Foreign Corrupt Practices Act, when its subsidiaries paid bribes to land tire sales in Kenya and Angola. The SEC said Goodyear failed to prevent or detect more than $3.2 million in bribes during a four-year period.  The alleged bribes were  paid to the employees of private companies, government-owned entities or other local authorities and were recorded as legitimate business expenses.

Goodyear said that in 2011, it had received tips about improper payments in Kenya through its confidential ethics hotline and in Angola from an employee. The company launched an investigation and “voluntarily disclosed” its results to the Department of Justice and the commission.

“As a result of its review, the company has implemented, and is continuing to implement, appropriate remedial measures,” the statement continued. “Goodyear divested its ownership interest in the Kenyan business in 2013 and the company is in the process of selling the Angolan business.”

Securities regulators are considering charges against Bank of New York Mellon, alleging that it violated federal bribery laws by giving internships to relatives of foreign officials to win business managing investments for their country.

The Bank of New York Mellon disclosed in a regulatory filing that Securities and Exchange Commission investigators told them that they intended to recommend charges against the bank for violating the Foreign Corrupt Practices Act. The violations of federal bribery laws were for  giving internships to relatives of foreign officials to win business managing investments for their countryThe bank isn’t facing formal charges yet, but regulators appear ready to hold the institution up as an example as they crack down on hiring practices at financial firms..

The SEC can choose to bring a civil lawsuit or administrative penalties, such as cease and desist orders, suspension of investment adviser registrations or monetary penalties.

French power and transportation company, Alstom S.A. (Alstom), has agreed to pay a $772,290,000 fine to resolve charges relating to tens of millions of dollars in bribes in countries around the world, including Indonesia, Saudi Arabia, Egypt and the Bahamas. According to the companies’ admissions, Alstom, Alstom Prom, Alstom Power and Alstom Grid, through various executives and employees, paid bribes to government officials and falsified books and records in connection with power, grid and transportation projects for state-owned entities around the world, including in Indonesia, Egypt, Saudi Arabia, the Bahamas and Taiwan. In total, Alstom paid more than $75 million to secure $4 billion in projects around the world, with a profit to the company of approximately $300 million.

Alstom pleaded guilty to a two-count criminal information filed Dec. 22, 2014 in the U.S. District Court for the District of Connecticut, charging the company with violating the Foreign Corrupt Practices Act (FCPA) by falsifying its books and records and failing to implement adequate internal controls.  Alstom admitted its criminal conduct and agreed to pay a $772 million criminal penalty. A sentencing hearing has been scheduled for June 23, 2015.

Alstom and its subsidiaries also attempted to conceal the bribery scheme by retaining consultants purportedly to provide consulting services on behalf of the companies, but who actually served as conduits for corrupt payments to the government officials.  Internal Alstom documents refer to some of the consultants in code, including “Mr. Geneva,” “Mr. Paris,” “London,” “Quiet Man” and “Old Friend.”

 

 

Avon Products Inc. settled its case involving foreign bribes by paying $135 Million, which is the third largest settlement against a U.S. company for foreign bribes, ever. The case was brought by the Securities and Exchange Commission (SEC) and related to Avon China’s business unit. The government alleged that Avon’s subsidiary in China paid millions of dollars to government officials to obtain a direct selling license and gain an edge over their competitors, and the company reaped substantial financial benefits as a result. The New York-based company had given luxurious items including Louis Vuitton merchandise, Gucci bags, Tiffany pens, as well as tickets to China open tennis tournament to officials and had adjusted the expenditure in its books as  “business entertainment,” “employee travel” or “public relations business entertainment,”

In its 2009 Annual Report, Avon noted that the internal investigation and compliance reviews, which started in China, had now expanded to its operations in at least 12 other countries and was focusing on reviewing “certain expenses and books and records processes, including, but not limited to, travel, entertainment, gifts, and payments to third-party agents and others, in connection with our business dealings, directly or indirectly, with foreign governments and their employees”. The Wall Street Journal (WSJ), reported that Avon suspended four employees, including the President, Chief Financial Officer (CFO) and top government affairs executive of Avon’s China unit as well as a senior executive in New York who was Avon’s head of Internal Audit.The initial information about the foreign bribes came from a whistleblower.

Jeffrey Newman represents whistleblowers

 

Bio-Rad Labs, a diagnostic and life sciences company, has agreed to pay $55 million to settle U.S. Securities and Exchange Commission charges that it violated the Foreign Corrupt Practices Act when its subsidiaries made improper payments to foreign officials in Russia, Vietnam and Thailand to win business.

The SEC said  Bio-Rad lacked sufficient internal controls to  detect about $7.5 million in bribes that were paid during a five-year period and improperly recorded in books and records as legitimate expenses such as commissions, advertising and training fees. The payments earned the company $35 million in illicit profits..

The SEC also stated that the company made excessive payments disguised as commissions to foreign agents with phony Moscow addresses and off-shore bank accounts. The agents were retained primarily to influence Russia’s Ministry of Health and help the company win bids for government contracts, the SEC said.

A U.S. District Judge on Thursday penalized California-based tech giant Hewlett-Packard Co. and its subsidiaries in Russian, Poland and Mexico a combined sum of $108 million after it conceded to charges of paying off government authorities in Russia, Poland and Mexico to secure huge technology contracts with the prosecutor’s general office in that nation.The money from the slush fund were used on luxury trips to Las Vegas, private-grand tour to the Grand Canyon, luxury automobiles, luxury gems, clothing, furniture, laptops and mobile devices and more such items, as per the statement of facts filed with the plea agreement. Continue reading