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FCPA Blog Daily News

« Hedge fund manager Och-Ziff discloses FCPA probe | Main | Compliance as a return on investment (Part 2) »
Thursday
Mar202014

Marubeni will pay $88 million to resolve second FCPA action

Head office of Marubeni in Chiyoda-Ku, Tokyo, Japan (courtesy of Wikipedia)Japan's Marubeni Corporation pleaded guilty Wednesday to eight FCPA charges, admitting it bribed Indonesian officials to win an electricity contract for itself and a partner, Alstom SA.

The commodity-trading firm agreed to pay a criminal fine of $88 million. It pleaded guilty to one count of conspiracy to violate the FCPA and seven substantive FCPA offenses.

Final sentencing in federal court in Connecticut is set for May 15.

 The DOJ said Marubeni initially refused to cooperate with the government's investigation.

In 2012, Marubeni paid a $54.6 million criminal penalty to resolve FCPA charges for its role as an agent of the KBR-led TSKJ Nigeria joint venture. It was charged in that case with conspiracy to violate the FCPA and aiding and abetting. It received a two-year deferred prosecution agreement that ended on February 26 this year.

The DOJ said Wednesday Marubeni and Paris-based power-equipment maker Alstom worked together to bribe a member of the Indonesian Parliament and officials at Perusahaan Listrik Negara (PLN), the state-owned electricity company.

Acting Assistant Attorney General Mythili Raman said, "Marubeni pleaded guilty to engaging in a seven-year scheme to pay -- and conceal -- bribes to a high-ranking member of Parliament and other foreign officials in Indonesia."

Four Alstom executives have already been charged in the case. Two have pleaded guilty.

Frederic Pierucci, a French citizen, pleaded guilty in July last year to an FCPA conspiracy count and a substantive FCPA offense. He was head of global sales for Alstom.

In late 2012, David Rothschild, a former vice president of regional sales for Alstom's Connecticut-based subsidiary, pleaded guilty to one FCPA conspiracy count. His plea was unsealed in April 2013.

In July last year, Lawrence Hoskins, formerly Alstom's senior vice president for the Asia region, was charged in federal court in Connecticut with conspiring to violate the FCPA and to launder money, as well as substantive FCPA and money laundering offenses.

A fourth Alstom executive is also facing charges. William Pomponi was charged in April 2013 with conspiracy and substantive FCPA and money laundering counts.

The DOJ said Wednesday it considered Marubeni's decision not to cooperate with the investigation when given the opportunity. Marubeni also lacked an effective compliance program and didn't voluntarily disclose the conduct, the DOJ said.

Marubeni's bribes in Indonesia helped it and Alstom win a $118 million contract, known as the Tarahan project.

The DOJ said the bribes were disguised as legitimate consulting service payments. But emails between Marubeni and Alstom employees said officials needed to be given adequate "rewards" and not just "pocket money."

Marubeni said Wednesday it has "undertaken extensive efforts to enhance its anti-corruption compliance program, and believes its current program is robust and effective."

The DOJ said it had help from the Office of the Attorney General in Switzerland and the UK Serious Fraud Office.

In 2008, Swiss police arrested a former manager of Alstom and searched for evidence as part of a corruption and money-laundering investigation. Offices near Zurich and in Baden were raided, along with homes in several cantons.

In 2010, the Serious Fraud Office arrested three Alstom UK executives. Police raided Alstom offices and residential addresses in Warwickshire, Leicestershire, Cheshire, Shropshire, Derbyshire, Staffordshire and London.

The DOJ's March 19, 2014 release is here.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

Julie DiMauro is the executive editor of FCPA Blog and can be reached here.

Reader Comments (1)

The Yomiuri newspaper is Japan is also reporting today that a Japanese railways consulting company, Japan Transportation Consultants, Inc., illegally paid about 100 million Yen in bribes and kickbacks, including payments to civil servants, in Indonesia, Vietnam and Uzbekistan from 2008 to 2012, in return for orders for official development assistance projects totaling 6 billion Yen.
March 20, 2014 | Unregistered CommenterSanta Japan
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