FCPA enforcement report for Q1 2018
Monday, April 2, 2018 at 7:18AM
Richard L. Cassin in enforcement report

During the first calendar quarter, there were three corporate FCPA enforcement actions.

The three settling companies paid a total of $3.45 million for the resolutions.

All three were announced in March.

For comparison, in Q1 2017 there were six corporate FCPA enforcement actions, with the settling companies paying a total of $256.5 million.

(All six ocurred before January 20, 2017 -- the start of the new Administration in Washington.)

In Q1 2016, there were eight corporate FCPA enforcement actions. The eight settling companies paid a total of $497.6 million for the resolutions.

In both Q1 2015 and Q1 2014, there were two corporate FCPA enforcement actions.

During the first quarter this year, three individuals pleaded guilty to FCPA-related charges and four were sentenced.

Two others were indicted for criminal FCPA offenses.

There was seven corporate declinations.

Here's what happened:

DOJ / SEC Enforcement Resolutions

Elbit Imaging LTD. (March 9) agreed to pay $500,000 to settle violations of the FCPA books and records and the internal controls provisions. Israel-based Elbit and its subsidiary, Plaza Centers NV, paid millions of dollars to third-party offshore consultants and a sales agent "for services," without knowing if the services were ever provided. The payments were in connection with a real estate development project in Romania and the sale of a large portfolio of real estate assets in the United States. The SEC resolved the case through an internal administrative order and didn't go to court.

Transport Logistics International Inc. (March 13) was charged with conspiracy to violate the FCPA's anti-bribery provisions. The company paid a criminal penalty of $2 million and entered into a three-year deferred prosecution agreement with the DOJ. It bribed a Russian official to award uranium transportation contracts.

Kinross Gold Corporation (March 26) settled FCPA charges brought by the SEC. Kinross paid a civil penalty of $950,000 for violating the FCPA's books and records and internal accounting controls provisions. The SEC cited the company's "repeated failure" to put in place anti-corruption compliance programs and adequate accounting controls at two African subsidiaries.

Sentenced

Victor Hugo Valdez Pinon (February 2), 54, a Texas-based citizen of Mexico, was sentenced to a year and a day in federal prison for a plot to bribe Mexican officials in exchange for airplane maintenance contracts. He had pleaded guilty to conspiracy to violate the FCPA and conspiracy to commit wire fraud. He was also ordered to forfeit $250,000 and pay restitution of about $90,000.

Daniel Perez (February 2), 69, a co-defendant of Pinon, was sentenced to three years’ probation after pleading guilty to conspiracy to violate the FCPA.

Kamta Ramnarine (February 2), 69, a co-defendant of Pinon, was sentenced to three years’ probation after pleading guilty to conspiracy to violate the FCPA.

Douglas Ray (March 30), 55, a co-defendant of Pinon, was sentenced to 18 months in prison after pleading guilty to conspiracy to violate the Foreign Corrupt Practices Act and conspiracy to commit wire fraud. He was also ordered to pay $590,000 in restitution when he appeared in federal court in Houston.

Guilty Pleas

Joo Hyun Bahn aka Dennis Bahn (January 5), 39, of Tenafly, New Jersey, pleaded guilty to trying to bribe a Qatari official to finance the sale of a high-rise building complex in Vietnam. In federal court in Manhattan, he admitted one count of conspiracy to violate the Foreign Corrupt Practices Act and one count of violating the FCPA. Sentencing is scheduled for June 29.

Eberhard Reichert (March 15), 78, a former Siemens AG executive, admitted being part of a plot to pay tens of millions of dollars in bribes to Argentine government officials for a $1 billion contract to create national identity cards. In federal court in Manhattan, he pleaded guilty to one count of conspiring to violate the FCPA's anti-bribery, internal controls and books and records provisions, and to commit wire fraud. 

Indicted by DOJ

Mark Lambert (January 12) 54, of Mount Airy, Maryland, was charged in an 11-count indictment with one count of conspiracy to violate the Foreign Corrupt Practices Act and to commit wire fraud, seven counts of violating the FCPA, two counts of wire fraud, and one count of money laundering. The former co-president of a Maryland-based company that transports nuclear materials to customers in the United States and abroad was charged with bribing an official connected to Russia’s State Atomic Energy Corporation.

Luis Carlos De Leon Perez (February 12), 41, a dual U.S. and Venezuela citizen, was charged with one count of conspiracy to violate the FCPA and with money laundering. He worked for Venezuela's state oil company, Petroleos de Venezuela S.A. (PDVSA). He was in custody in Spain pending extradition.

Nervis Gerardo Villalobos Cardenas (February 12), 50, a Venezuela citizen, was charged with one count of conspiracy to violate the FCPA and with money laundering. He worked for (PDVSA). He was in custody in Spain pending extradition.

Declinations

Cobalt International Energy, Inc. (January 30) said the SEC told the company it had concluded its FCPA investigation relating to Cobalt's Angolan operations and that the SEC staff does not intend to recommend any enforcement.*

Juniper Networks, Inc. (February 9) said the DOJ has closed its FCPA investigation of the company and won't bring an enforcement action. The SEC's investigation is still pending, Juniper said. The company first disclosed the FCPA investigation in August 2013.

Core Laboratories N.V. (February 12) said the DOJ and SEC have both closed investigations into the company's dealings with Unaoil and won't bring any enforcement action. Core Labs said it learned of the SEC declination on February 5, 2018. It disclosed a DOJ declination in October 2017.

Teradata Corporation (February 23) said ithe FCPA investigation into gifts and travel expenses at a subsidiary in Turkey has ended and the company won't face an enforcement action. The SEC advised Teradata in January that its investigation was closed. The company received a declination from the DOJ on February 20.*

Exterran Corporation (February 28) said an investigation into compliance with the FCPA had ended, with both the DOJ and SEC saying they don't intend to bring enforcement actions. Houston-based Exterran said the two-year investigation had focused on equipment contracts for desdalination plants in the Middle East. The company first disclosed the potential compliance problems to the SEC in April 2016.*

Sanofi (March 7) said the DOJ notified the company in February 2018 that it had "decided to close its inquiry" into FCPA  allegations. Sanofi said it is still cooperating with the SEC’s review of the allegations.*

Kinross Gold Corporation (March 26) said the DOJ has closed its criminal investigation of two African subsidiaries. (See SEC enforcement action above.) The DOJ notified Kinross on November 7, 2017 that it had "closed its investigation, declining to pursue further the matter."

*Company disclosures courtesy of FCPA Tracker.

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Our prior full-year enforcement reports are here:

2017 FCPA Enforcement Index

2016 FCPA Enforcement Index

2015 FCPA Enforcement Index

2014 FCPA Enforcement Index

2013 FCPA Enforcement Index

2012 FCPA Enforcement Index

2011 FCPA Enforcement Index

2010 FCPA Enforcement Index

2009 FCPA Enforcement Index

2008 FCPA Enforcement Index

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Richard L. Cassin is the publisher and editor of the FCPA Blog.

Article originally appeared on The FCPA Blog (https://www.fcpablog.com/).
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