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FCPA Blog Daily News

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Monday
Jul012013

Enforcement Report for Q2 '13

It was blockbuster quarter for FCPA enforcement, and April was one of the busiest months on record.

There were five corporate resolutions, including the first-ever double non-prosecution agreements from the DOJ and SEC in the Ralph Lauren case. 

Total S.A.'s mega settlement cracked our Top Ten list, the first change to that list since late 2011.

Three individuals were sentenced during the quarter, three pleaded guilty, and nine were indicted or arrested.

The Supreme Court refused to review Frederic Bourke's FCPA conspiracy conviction. He reported to prison a month later to begin serving his prison sentence.

Here's what happened:

DOJ / SEC Enforcement Resolutions

Koninklijke Philips Electronics N.V. (April 9), reached a final settlement with the SEC through an administrative order (out of court). Philips agreed to pay $4.5 million, with disgorgement of $3.1 million and prejudgment interest of $1.4 million.

Uriel Sharef (April 16), the former officer and board member of Siemens AG, settled civil FCPA charges with the SEC. He agreed to pay a $275,000 penalty. He was charged for his role in Siemens' decade-long bribery scheme to win and retain a $1 billion government contract to produce national identity cards for Argentine citizens.

Parker Drilling Company resolved DOJ and SEC charges (April 16) for bribes paid to Nigerian officials through logistics agent Panalpina to circumvent customs and tax laws. Parker agreed to pay $15.9 million when it pleaded guilty to a one-count information charging it with violating the FCPA’s anti-bribery provisions.

Ralph Lauren Corporation agreed in a DOJ and SEC settlement (April 22) to pay $1.6 million in combined penalties in exchange for unprecedented dual non-prosecution agreements. The company admitted its Argentina subsidiary paid bribes to government and customs officials. It was the first time the SEC has resolved an FCPA case using a non-prosecution agreement.

Dejun 'David' Zou settled with the SEC (May 15) by paying penalties of $150,000 and disgorging $3.5 million for FCPA books and records violations. He was CEO of China-based Rino International Corporation. The case didn't involve allegations of bribery.

Jianping 'Amy' Qiu, Zou's wife, settled with the SEC (May 15) by paying penalties of $100,000 and disgorging (with her husband) $3.5 million. She was chairman of the board of Rino International Corporation.

Rino International Corporation settled with the SEC (May 15) but was not assessed separate penalties from Zou and Qiu.

Total S.A. settled with the DOJ and SEC (May 29) in the fourth biggest FCPA case ever. The French oil giant agreed to pay $398 million in penalties and disgorgement for bribing an Iran official to gain access to oil and gas fields.

Sentenced

Clayton Lewis (April 4), the former hedge fund executive who pleaded guilty nine years ago to conspiracy to violate the FCPA in connection with an investment in Viktor Kozeny's Azerbaijan privatization scheme, was sentenced to time served. He was jailed for six days after his 2003 arrest. Lewis, 48, faced up to five years in prison after his guilty plea in 2004.

Thomas Farrell (April 26), a former employee of Viktor Kozeny, was sentenced to time served after pleading guilty to an FCPA conspiracy and aiding and abetting.

Paul G. Novak (May 6), the former consultant for pipeline contractor Willbros International Inc., was sentenced to serve 15 months in prison and pay a $1 million fine for his role in a scheme to pay more than $6 million in bribes to government and political party officials in Nigeria. He had pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act and one substantive FCPA offense.

Guilty Pleas

Peter DuBois (April 5), the former vice president of sales and marketing at BizJet, pleaded guilty on January 5, 2012, to a criminal information, and his plea was unsealed April 5 in federal court.

Neal Uhl (April 5), the former vice president of finance at BizJet, pleaded guilty on January 5, 2012, to a criminal information, and his plea was unsealed April 5 in federal court.

David Rothschild (April 16), a former vice president of sales for Alstom USA, pleaded guilty on November 2, 2012. In his plea deal unsealed in April, he was charged with one count of conspiracy to violate the FCPA.

Indicted / Arrested

Bernd Kowalewski (April 5), the former president and chief executive officer of BizJet, was charged with conspiring to violate the FCPA and to launder money, as well as substantive FCPA and money laundering offenses. He was indicted in January 2012 and the indictment unsealed on April 5. He's believed to be living outside the United States.

Jald Jensen (April 5), the former sales manager at BizJet, charged with conspiring to violate the Foreign Corrupt Practices Act and to launder money, as well as substantive charges of violating the FCPA and money laundering. He was indicted in January 2012, with the indictment unsealed on April 5. He's believed to be living outside the United States.

Frederic Cilins (April 14), a French citizen, was arrested and charged with trying to obstruct a federal investigation into whether a mining company paid bribes to win mining rights in the Republic of Guinea. He wasn't charged with FCPA violations.

Frederic Pierucci  (April 16), an indictment was unsealed against the French citizen and current Alstom USA executive in charge of sales for an alleged Indonesia bribery scheme. He was arrested at New York's JFK airport and charged with conspiring to violate the Foreign Corrupt Practices Act and to launder money, as well as substantive charges of violating the FCPA and money laundering.

William Pomponi (May 1), a former vice president of sales for Alstom's U.S. subsidiary, became the third exec from the company charged with overseas bribery and related offenses. He was indicted for conspiring to violate the FCPA and to launder money, as well as substantive FCPA and money laundering offenses. The DOJ said in a superseding indictment that the three Alstom defendants and others bribed a member of Indonesian Parliament and officials at Perusahaan Listrik Negara (PLN), the Indonesian state-owned electricity company.

Tomas Alberto Clarke Bethancourt (May 8) was arrested and charged with paying at least $5 million in bribes to an official at a state-owned Venezuelan bank to win bond trading work. He was a broker at the Miami office of Direct Access Partners. He faces four conspiracy and substantive counts under the FCPA and the Travel Act, and two money laundering-related counts.

Jose Alejandro Hurtado (May 8) was arrested and charged with Bethancourt. He was also a broker in Miami for Direct Access Partners.

Ernesto Lujan (June 12) was the head of the Miami office of Direct Access Partners. He was also charged with conspiracy to bribe an officer at a state-owned Venezuela bank in exchange for bond trading business. A bank officer who allegedly took bribes was charged with money laundering and related crimes.

Appeal Dismissed

Frederic Bourke lost a bid for the Supreme Court to review his 2009 conviction for conspiracy to violate the FCPA and lying to FBI agents (April 16). A month later, Bourke reported to Englewood Camp, a minimum-security facility in the southwest suburbs of Denver, Colorado, to begin serving a one-year sentence. 

Declinations (disclosed investigations by the DOJ or SEC or both followed by either or both agencies declining to bring an enforcement action)

IDT Corporation, a telecommunications provider, disclosed (June 10) that it was informed in March 2013 by the DOJ and SEC that they had closed their two-year investigations into possible FCPA violations.

Medtronic Inc. won a double declination (June 27) following an FCPA probe that lasted more than five years. The medical device maker said it received word in June from the DOJ and SEC that they've closed their investigations and won't pursue enforcement actions.

___________

Our Enforcement Report for Q1 '13 is here.

Our 2012 Enforcement Index is here. The 2011 Enforcement Index is here, the 2010 Index is here, the 2009 Index can be found here, and our 2008 Index is here.