Articles Posted in foreign corrupt practices act

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.

The U.S. Justice Department has joined a Foreign Corrupt Practices Act investigation of Alexion Pharmaceuticals Inc. the company said in a securities filing. Alexion received a subpoena from the Securities and Exchange Commission in May and a request of voluntary production of documents from the Justice Department this month.

The previously disclosed SEC inquiry is related to the company’s grant-making activities and False Corrupt Practices Act  compliance in various countries, concerning possible bribes of public officials or their agents. The company develops therapies for rare diseases. The nature of possible bribes is not yet known.

 

 

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.

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.

 

 

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.

Former PetroTiger Ltd. CEO Joseph Sigelman, was indicted on U.S. charges that he bribed an official at Ecopetrol SA (ECOPETL), Colombia’s state-controlled oil company, to obtain a $39.6 million contract. PettroTiger is based in the Virgin Islands.

According to court records, Sigelman and others allegedly paid bribes to an official in Colombia in exchange for the official’s assistance in securing approval for an oil services contract worth roughly $39 million. Continue reading

Hewlett Packard is paying $108 million to settle a Justice Department investigation into HP’s conduct in Russia and Poland in which it is alleged the company paid bribes to government officials to win business there.

This is one of a number of cases being investigated by the DOJ which has placed an emphasis on prosecuting companies that pay bribes to foreign government officials or their agents or family in order to get business. Such activity violates the Foreign Corrupt Practices Act (FCPA) but it is known that bribes are paid in many countries with great frequency. Continue reading