United States: Individual Prosecutions

Obstruction of Justice Charges Filed Against Individual Trying to Impede FCPA Grand Jury

The DOJ announced on Monday, April 15, 2013, that it had arrested Frederic Cilins, a French citizen, on charges of witness tampering, obstruction of a criminal investigation and destroying evidence. The charges stem from Cilins alleged attempts to try to acquire and then destroy evidence related to an ongoing grand jury investigation of an unnamed mining company doing business in the "Republic of Guinea's Simandou region." The DOJ stated in its press release that the mining company previously employed Cilins and that it may have made improper payments to government officials in the Republic of Guinea to obtain mining rights. As currently described by the DOJ, the scheme functioned by having the wife of a Guinean official receive bribes that she then distributed to others, while keeping a share for herself. The money was paid to individuals "whose authority might be needed to secure mining rights." The company is also alleged to have pledged stock to the official's wife. The grand jury is reportedly considering charges related to FCPA and anti-money laundering laws.

Bizjet Employees Charged with Bribery

On Friday, April 5, 2013, charges were unsealed which alleged that four former ranking members of Bizjet, a U.S. subsidiary of Lufthansa Technik AG, conspired and paid bribes to foreign government officials to secure contracts. According to the DOJ's press release, "[the former executives] caused hundreds of thousands of dollars to be paid directly and indirectly to ranking military officials in various foreign countries, and two former executives have pleaded guilty for their roles in the conspiracy." In particular, officials in Mexico, Brazil and Panama were referenced in the DOJ's announcement.

Of the four alleged conspirators, two, Bernd Kowalewski, the former president and CEO, and Jald Jensen, remain at large abroad. Peter DuBois and Neal Uhl, both former vice presidents, individually pleaded guilty on January 5, 2012. DuBois pleaded guilty to one count each of conspiracy to violate the FCPA and violating the FCPA. Uhl pleaded guilty to one count of conspiracy to violate the FCPA. Both received downward departures during sentencing, based on their cooperation, and both ultimately were sentenced to eight months house arrest and probation. The company, Bizjet, entered into a DPA, in March 2012, to settle charges related to its corrupt conduct and the actions of its employees.

Charges Brought Against Individuals Involved in "Massive International Bribery Scheme"

A criminal complaint was unsealed on Tuesday, May 7, 2013, against Tomas Alberto Clarke Bethancourt ("Clark") and Jose Alejandro Hurtado ("Hurtado"), both employed by Direct Access Partners, a U.S. broker-dealer, and Maria de los Angeles Gonzalez de Hernandez ("Gonzalez"), described by the DOJ as a "senior official in Venezuela's state economic development Bank, Banco de Desarrollo Economico y Social de Venezuela (BANDES)." Clark and Hurtado are alleged to have paid at least $5 million in bribes, between April 2009 through June 2010, to Gonzalez in order to facilitate BANDES's execution of financial transactions through the U.S. broker-dealer from whom they were employed. The DOJ press release indicates that these bribes proved lucrative: "during this time period, the Broker- Dealer generated $60 million in mark-ups and mark-downs from trades with BANDES." The bribes were reported to have been paid through "intermediary corporations" or through offshore accounts. Additionally, the SEC has instituted civil charges and a civil forfeiture action was commenced in Manhattan on May 6, 2013.

FCPA Charges Brought Against Three for Alleged Violations Connected to Indonesia Taharan Power Project

On April 16, 2013, charges were unsealed against Frederic Pierucci and David Rothschild for their alleged misconduct in bribing Indonesian officials to obtain valuable contract rights to provide power to the country. On May 1, 2013, another individual, William Pomponi, was also alleged by the DOJ to have been involved in the scheme. All three individuals are current and former vice presidents of a U.S.-based subsidiary of a French power and transportation company. According to the DOJ's press release: . . .

The defendants, together with others, paid bribes to offi-cials in Indonesia, including a member of [the] Indonesian Parliament and high-ranking members of Perusahaan Listrik Negara (PLN), the state-owned and state-controlled electricity company in Indonesia, in exchange for assistance in securing a $118 million contract, known as the Taharan Project, for the company and its consor-tium partners to provide power related services for the citizens of Indonesia.

Defendants allegedly hired agents to facilitate the bribery and, according to the govern-ment, were explicit in their emails about the purpose the funds paid to the agents would serve. These agents were ostensibly hired to provide consulting services for the company's efforts at obtaining contracts for the Taharan Project, but were in fact conduits to the fraud.

Rothschild pleaded guilty on November 2, 2012, to conspiracy to violate the FCPA in a one count information. Pierucci was only recently apprehended, having been arrested on Sunday, April 14, 2013. Pomponi was charged with conspiracy to violate the FCPA and to launder money, as well as with a violation of the FCPA and money laundering.

Willbros International Inc.

On May 3, 2013, Paul G. Novak, a former consultant for Willbros International Inc., was sentenced for partaking in a $6 million scheme to bribe government and political party officials in Nigeria. Novak was sentenced to 15 months in prison, $1 million in fines and two years of supervised release following his prison term. He pleaded guilty to one count of conspiracy to violate the FCPA and one count of a substantive FCPA violation.

In 2008, Willbros Group Inc. and Willbros International Inc. paid $22 million in a FCPA settlement with the DOJ. In the settlement, the company admitted bribing government officials in Nigeria and Ecuador. The company subsequently entered into a DPA. Kenneth Tillery was also charged with Novak, but allegedly remains a fugitive. From 2003 through 2005, Novak conspired to pay more than $6 million in alleged bribes in order to secure signifi-cant contracts related to the $387 million Eastern Gas Gathering System Project, a natural gas pipeline in the Niger Delta.

Two former Willbros employees have already been imprisoned for their roles in the scheme. In 2006, Jim Brown, a former executive, pleaded guilty to one count of conspiracy to violate the FCPA.

He was sentenced in 2010 to 12 months in prison. Jason Steph, a former execu-tive, also pleaded guilty to one count of conspiracy to violate the FCPA. The DOJ alleged that the four men conspired to bribe officials from various government orga-nizations, such as the Nigerian National Petroleum Corporation and the National Petroleum Investment Management Services. They also allegedly conspired to bribe members of Nigerian political parties.

Rino

On May 15, 2013, the SEC charged husband-and-wife exec-utives and the Rino International Corporation with violations of the books and records and internal controls provisions of the FCPA. While Rino is a wholly-China-based company, it is technically incorporated in Nevada. The complaint alleges that the execu-tives overstated the company's revenues and diverted proceeds from a securities offering for their own personal use. Dejun Zou and Jianping Qiu allegedly diverted $3.5 million in company money to buy a home in Orange County, California, without disclosing that information to investors. When questioned by an outside auditor, the couple provided false infor-mation. The couple agreed to settle with the SEC and pay out penalties totaling $250,000 and disgorgement of $3.5 million into a related class action settlement. The couple did not admit or deny the allegations.

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