Last week in Houston the three KBR-related sentences ranged from 30 months in prison for Jack Stanley to just a year of unsupervised probation for Wojciech Chodan. Jeffrey Tesler was in the middle with 21 months in jail. How do their sentences compare?
Entries in Bobby Jay Elkin (8)
How does the thirty-month prison term Ousama Naaman received last week compare with other FCPA sentences?
We have enormous respect for those who serve the public, including the prosecutors at the DOJ. Without them, the 'rule of law' would just be pretty words.
They're facing up to 30 years behind bars. The government isn't likely to ask for jail terms of that length. But prosecutors will want long sentences -- probably more like 10 or 12 years.
Leo Winston Smith faced up to eight years in prison. He'll serve just six months behind bars.
Bobby Jay Elkin Jr., a former country manager in Kyrgyzstan for tobacco company Dimon Inc, now called Alliance One International, was sentenced to just three years' probation a $5,000 fine. He had pleaded guilty in August to a one-count criminal information charging him with conspiracy to violate the Foreign Corrupt Practices Act.
In an unusual tandem settlement, two unrelated U.S. tobacco companies and their foreign subsidiaries today resolved civil and criminal FCPA charges with the SEC and DOJ.
In the criminal cases, two foreign subsidiaries of North Carolina-based Alliance One International Inc. agreed to pay a total of $9.45 million in fines. And a Brazilian subsidiary of Virginia-based Universal Corporation agreed to pay a $4.4 million criminal fine.
Alliance One's Swiss and Kyrgyzstan subsidiaries pleaded guilty in U.S. District Court for the Western District of Virginia to separate three-count criminal informations charging them with conspiring to violate the FCPA and violations of the anti-bribery provisions and books and records provisions of the FCPA.
Universal's Brazilian subsidiary pleaded guilty to a two-count information in the Eastern District of Virginia. It was charged with conspiring to violate the anti-bribery provisions and books and records provisions of the FCPA, and with violating the FCPA's anti-bribery provisions.
The parent companies -- Universal and Alliance One -- entered into non-prosecution agreements with the DOJ and agreed to retain independent monitors for three years. They're cooperating in the ongoing investigations.
In the SEC civil cases, Universal and Alliance One were ordered to pay disgorgement of $4.58 million and $10 million respectively. The SEC charged both companies with violating the FCPA's anti-bribery provisions in Thailand. It also said Alliance One payed bribes in Kyrgyzstan, China, Greece, and Indonesia. And it said Universal made improper payments in Malawi and Mozambique. The SEC's complaints alleged both Universal and Alliance One violated the books and records and internal control provisions of the FCPA.
Alliance One was formed in 2005 with the merger of Dimon Incorporated and Standard Commercial Corporation, both wholesale leaf tobacco merchants. The FCPA violations were committed by employees and agents of foreign subsidiaries of both Dimon and Standard before the merger.
Earlier this week, Bobby Jay Elkin Jr., a former Dimon executive, pleaded guilty to a one-count criminal information charging him with conspiracy to violate the FCPA. Elkin, 50, of Washington, D.C., was Dimon's country manager in Kyrgyzstan. He faces up to five years in prison and a $250,000 fine. His sentencing date hasn't been set.
In April, the SEC brought a civil enforcement action against Elkin and three other former employees of Dimon. It charged them with violating the anti-bribery provisions of the FCPA and aiding and abetting violations. The defendants agreed to settle the charges, with two of them paying $40,000 in penalties. The SEC didn't impose financial penalties on Elkin.
Final sentencing for Alliance One subsidiaries is scheduled for October 21, 2010.
Alliance One International trades on the NYSE under the symbol AOI.
Universal Corporation trades on the NYSE under the symbol UVV.
View the DOJ's August 6, 2010 release here.
View the SEC's Litigation Release No. 21618 and Accounting and Auditing Enforcement Release No. 3170 (both dated August 6, 2010) in Securities and Exchange Commission v. Universal Corporation, Inc., Civil Action No. 01:10-cv-01318 (RWR) (D.D.C.) (filed August 6, 2010) and Securities and Exchange Commission v. Alliance One International Inc., Civil Action No. 01:10-cv-01319 (RMU) (D.D.C.) (filed August 6, 2010) here.
Download the SEC's civil complaint against Universal Corporation here.
Download the SEC's civil complaint against Alliance One International here.
Bobby Jay Elkin Jr., a former executive from tobacco company Dimon Inc, now called Alliance One International, pleaded guilty yesterday in federal court in Virginia to a one-count criminal information charging him with conspiracy to violate the Foreign Corrupt Practices Act.
Elkin, 50, of Washington, D.C., was Dimon's country manager in Kyrgyzstan. He faces up to five years in prison and a $250,000 fine. No sentencing date has been set.
The DOJ said Elkin paid bribes of more than $3 million to foreign government officials in Kyrgyzstan from 1996 through 2004 to win business for Dimon. He made cash payments to officials of the Kyrgyz tobacco authority, part of the government, to obtain export licenses and gain access to government-owned tobacco processing facilities. He also bribed local government officials to obtain permission to purchase tobacco from local growers, and to the Kyrgyz Tax Inspection Police to avoid tax inspections and penalties.
In April, the SEC brought a civil enforcement action against Elkin and three other former employees of Dimon. It charged them with violating the anti-bribery provisions of the Foreign Corrupt Practices Act and aiding and abetting violations. The defendants agreed to settle the charges.
According to the SEC's civil complaint, Dimon was subjected to continuous audits by Kyrgyz tax officials. Some Dimon personnel devoted most of their work hours to answering questions from the tax inspectors. As soon as one audit finished, another would begin. The inspectors were never satisfied. Because Dimon once "failed to submit two reports to the tax office," they imposed a fine of about $171,741 and threatened to seize its bank accounts and tobacco inventory. The tax inspectors later offered to reduce the penalties in exchange for Dimon's cash payment.
Separately, the SEC said from 2000 to 2003, Dimon paid bribes to officials of the government-controlled Thailand Tobacco Monopoly.
Elkin wasn't penalized in the SEC civil action. He and the other defendants (two of whom paid penalties of $40,000) consented to the entry of final judgments permanently enjoining them from violating the anti-bribery provisions of the FCPA (Section 30A of the Securities Exchange Act of 1934) and aiding and abetting violations of Sections 13(b)(2)(A) and 13(b)(2)(B).
Alliance One International, Inc. was formed in May 2005 -- after the FCPA violations occurred -- with the merger of Dimon and Standard Commercial Corporation. The company trades on the NYSE under the symbol AOI.
View the DOJ's August 4, 2010 release here.
Download a copy of the plea agreement in U.S. v. Bobby Jay Elkin Jr. here.