French Company Settles FCPA Charges for $240 Million
06/30/10 12:31 PM
On
June 28, 2010, Department of Justice (DOJ)
announced that Technip
S.A., a global engineering, construction, and
services company based in Paris, France, has
agreed to a $240 million criminal penalty to
resolve charges related to the Foreign Corrupt
Practices Act (FCPA) for its participation in a
decade-long scheme to bribe Nigerian government
officials to obtain engineering, procurement,
and construction (EPC) contracts. The EPC
contracts to build liquefied natural gas (LNG)
facilities on Bonny Island, Nigeria, were valued
at more than $6 billion.
DOJ filed a deferred prosecution agreement and a criminal information against Technip in the U.S. District Court for the Southern District of Texas. The two-count information charges Technip with one count of conspiracy and one count of violating the FCPA.
Technip, Kellogg Brown & Root Inc (KBR) and two other companies were part of a joint venture that was awarded four EPC contracts by Nigeria LNG Ltd. (NLNG) between 1995 and 2004 to build LNG facilities on Bonny Island. The government-owned Nigerian National Petroleum Corporation (NNPC) was the largest shareholder of NLNG.
According to court documents, Technip authorized the joint venture to hire two agents to pay bribed to a range of Nigerian government officials, including top-level executive branch officials, to assist Technip and the joint venture in obtaining the EPC contracts. The joint venture paid approximately $182 million to its agents to be forwarded to Nigerian government officials as bribes.
Under the terms of the deferred prosecution agreement, DOJ agreed to deter prosecution of Technip for two years. Meanwhile, Technip is obligated to obtain an independent compliance monitor for a two-year period to review the design and implementation for Technip’s compliance program and to cooperate with the department in ongoing investigations. If Technip abides by the terms of the deferred prosecution agreement, DOJ will dismiss the criminal information when the term of the agreement expires.
Technip also reached a settlement of a related civil complaint filed by the Securities and Exchange Commission (SEC) charging Technip with violating the FCPA’s anti-bribery, books and records, and internal controls provisions. As part of this settlement, Technip agreed to pay $98 million in disgorgement of profits relating to those violations.
Including today’s resolutions, a total of $917 million in criminal and civil penalties have been obtained to date as a result of the ongoing DOJ and SEC investigations of the scheme to bribe Nigerian government officials in order to win the Bonny Island EPC contract.
DOJ filed a deferred prosecution agreement and a criminal information against Technip in the U.S. District Court for the Southern District of Texas. The two-count information charges Technip with one count of conspiracy and one count of violating the FCPA.
Technip, Kellogg Brown & Root Inc (KBR) and two other companies were part of a joint venture that was awarded four EPC contracts by Nigeria LNG Ltd. (NLNG) between 1995 and 2004 to build LNG facilities on Bonny Island. The government-owned Nigerian National Petroleum Corporation (NNPC) was the largest shareholder of NLNG.
According to court documents, Technip authorized the joint venture to hire two agents to pay bribed to a range of Nigerian government officials, including top-level executive branch officials, to assist Technip and the joint venture in obtaining the EPC contracts. The joint venture paid approximately $182 million to its agents to be forwarded to Nigerian government officials as bribes.
Under the terms of the deferred prosecution agreement, DOJ agreed to deter prosecution of Technip for two years. Meanwhile, Technip is obligated to obtain an independent compliance monitor for a two-year period to review the design and implementation for Technip’s compliance program and to cooperate with the department in ongoing investigations. If Technip abides by the terms of the deferred prosecution agreement, DOJ will dismiss the criminal information when the term of the agreement expires.
Technip also reached a settlement of a related civil complaint filed by the Securities and Exchange Commission (SEC) charging Technip with violating the FCPA’s anti-bribery, books and records, and internal controls provisions. As part of this settlement, Technip agreed to pay $98 million in disgorgement of profits relating to those violations.
Including today’s resolutions, a total of $917 million in criminal and civil penalties have been obtained to date as a result of the ongoing DOJ and SEC investigations of the scheme to bribe Nigerian government officials in order to win the Bonny Island EPC contract.
VA Resident Sentenced for FCPA Violations
06/25/10 12:24 PM
On
June 25, 2010, the U.S. Department of
Justice announced that John
Webster Warwick, a 64-year old Virginia Beach,
VA, resident, was sentenced in U.S. District
Court in Richmond, VA, to 37 months in prison
for conspiring to pay bribes to former
Panamanian government officials to secure
maritime contracts.
On February 10, 2010, Warwick pleaded guilty to conspiracy to make corrupt payments to foreign government officials for the purpose of securing business for Ports Engineering Consultants Corporation (PECC) in violation of the Foreign Corrupt Practices Act (FCPA).
According to court documents, Warwick and others conspired to pay money secretly to Panamanian government officials for awarding contracts to PECC. In December 1997, the Panamanian government awarded PECC a no-bid 20-year concession. In December 1997, Warwick and others authorized payments to be made to the Panamanian government officials, which totaled more than $200,000.
In addition to the prison term, Warwick forfeited $331,000 in proceeds of the conspiracy and will be subject to a two-year supervised release following his prison term.
On February 10, 2010, Warwick pleaded guilty to conspiracy to make corrupt payments to foreign government officials for the purpose of securing business for Ports Engineering Consultants Corporation (PECC) in violation of the Foreign Corrupt Practices Act (FCPA).
According to court documents, Warwick and others conspired to pay money secretly to Panamanian government officials for awarding contracts to PECC. In December 1997, the Panamanian government awarded PECC a no-bid 20-year concession. In December 1997, Warwick and others authorized payments to be made to the Panamanian government officials, which totaled more than $200,000.
In addition to the prison term, Warwick forfeited $331,000 in proceeds of the conspiracy and will be subject to a two-year supervised release following his prison term.
Virginia Resident Sentenced to 87 Months for FCPA Violations
04/26/10 12:40 AM
On
April 19, 2010, the Department of Justice
(DOJ) announced that Charles
Paul Edward Jumet of Fluvanna County, CA, was
sentenced to 87 months in prison for bribing
former Panamanian government officials to secure
maritime contracts in violation of the Foreign
Corrupt Practices Act (FCPA), and for making
false statements to federal agents.
According to the court documents, from 1997 through 2003, Jumet and others conspired to bribe Panamanian government officials in exchange for awarding contracts to Ports Engineering Consultants Corporation (PECC) to maintain lighthouses and buoys along Panama’s waterway. In December 1997, the Panamanian government awarded PECC a no-bid 20-year concession. Upon receipt of the concession, Jumet admitted that he and others authorized corrupt payments to be made to the Panamanian government officials totaling more that $200,000.
In addition, Jumet also made a false statement to federal agents about a dividend check payable to the bearer in the amount of $18,000 that was endorsed and deposited into an account belonging to the high-ranking elected Panamanian government official. Jumet falsely claimed that this check was a donation for the official’s re-election campaign, when, in fact, Jumet admitted it was given to the Panamanian government official as a corrupt payment for allowing PECC to receive the contract.
In a related case, in February 2010, John Warwick pleaded guilty for his role in the same conspiracy to violate the FCPA. His sentencing is scheduled for May 14, 2010.
According to the court documents, from 1997 through 2003, Jumet and others conspired to bribe Panamanian government officials in exchange for awarding contracts to Ports Engineering Consultants Corporation (PECC) to maintain lighthouses and buoys along Panama’s waterway. In December 1997, the Panamanian government awarded PECC a no-bid 20-year concession. Upon receipt of the concession, Jumet admitted that he and others authorized corrupt payments to be made to the Panamanian government officials totaling more that $200,000.
In addition, Jumet also made a false statement to federal agents about a dividend check payable to the bearer in the amount of $18,000 that was endorsed and deposited into an account belonging to the high-ranking elected Panamanian government official. Jumet falsely claimed that this check was a donation for the official’s re-election campaign, when, in fact, Jumet admitted it was given to the Panamanian government official as a corrupt payment for allowing PECC to receive the contract.
In a related case, in February 2010, John Warwick pleaded guilty for his role in the same conspiracy to violate the FCPA. His sentencing is scheduled for May 14, 2010.
Daimler Settles FCPA Charges for $185 Million
04/01/10 11:06 PM
On
April 1, 2010, German auto manufacturer Daimler AG
(Daimler) and three of its subsidiaries
settled Foreign Corrupt
Practices Act (FCPA) charges in Washington’s
U.S. District Court.
The complaint filed against Daimler alleged that from 1998 to 2008 the company bribed foreign officials in 22 countries, including Russia, Iraq and China, to secure business. According to the settlement agreement, acknowledged its FCPA violations and entered into a two-year deferred prosecution agreement with the Justice Department. In addition, Daimler must disgorge $91.4 million in profits to the Securities and Exchange Commission (SEC) and pay a $93.6 million fine to the Justice Department, for a total of $185 million in combined criminal and civil penalties.
Federal sentencing guidelines call for a larger fine, but the Justice Department decided to reduce the penalty following Daimler’s cooperation with the government. As part of its deferred prosecution agreement, Daimler agreed to retain an independent compliance monitor for three years to oversee its implementation of a compliance program.
The complaint filed against Daimler alleged that from 1998 to 2008 the company bribed foreign officials in 22 countries, including Russia, Iraq and China, to secure business. According to the settlement agreement, acknowledged its FCPA violations and entered into a two-year deferred prosecution agreement with the Justice Department. In addition, Daimler must disgorge $91.4 million in profits to the Securities and Exchange Commission (SEC) and pay a $93.6 million fine to the Justice Department, for a total of $185 million in combined criminal and civil penalties.
Federal sentencing guidelines call for a larger fine, but the Justice Department decided to reduce the penalty following Daimler’s cooperation with the government. As part of its deferred prosecution agreement, Daimler agreed to retain an independent compliance monitor for three years to oversee its implementation of a compliance program.
Executives of Military and Security Product Companies Indicted in Foreign Bribery Scheme
01/19/10 10:37 PM
On
January 19, 2010, the U.S. Department of Justice
(DOJ) announced that twenty-two
executives working in the military and security
industries were arrested and charged with
conspiracy to bribe an African defense minister
in violation of the Foreign Corrupt Practices
Act (FCPA).
The indictments are a result of the largest single investigation and prosecution against individual defendants in the history of DOJ’s enforcement of FCPA. The indictments allege that the defendants engaged in a scheme to bribe an African defense minister and agreed to pay a 20% “sales commission” to someone they believed was the minister’s representative in order to win a portion of a $15 million contract to outfit the country’s presidential guard. The defense minister’s representative, who in fact was an undercover FBI agent, told the defendants that the “sales commission” would be paid directly to the minister of defense.
The defendants allegedly agreed to engage in a small test deal to show the minister of defense that he would personally receive the bribe, and to create two price quotations in connection with the deal: one representing the true cost of the goods, and another representing the cost of the goods plus the 20% commission.
Each of the indictments alleges that the defendants conspired and violated the Foreign Corrupt Practices Act (FCPA) and conspired to engage in money laundering.
The defendants face five years imprisonment for the conspiracy count and for each FCPA count. The indictments in this case also seek criminal forfeiture of the defendants’ gains.
The indictments are a result of the largest single investigation and prosecution against individual defendants in the history of DOJ’s enforcement of FCPA. The indictments allege that the defendants engaged in a scheme to bribe an African defense minister and agreed to pay a 20% “sales commission” to someone they believed was the minister’s representative in order to win a portion of a $15 million contract to outfit the country’s presidential guard. The defense minister’s representative, who in fact was an undercover FBI agent, told the defendants that the “sales commission” would be paid directly to the minister of defense.
The defendants allegedly agreed to engage in a small test deal to show the minister of defense that he would personally receive the bribe, and to create two price quotations in connection with the deal: one representing the true cost of the goods, and another representing the cost of the goods plus the 20% commission.
Each of the indictments alleges that the defendants conspired and violated the Foreign Corrupt Practices Act (FCPA) and conspired to engage in money laundering.
The defendants face five years imprisonment for the conspiracy count and for each FCPA count. The indictments in this case also seek criminal forfeiture of the defendants’ gains.
SEC Imposes Control Person Liability on Corporate Officers of Public Companies for Foreign Corrupt Practices
08/01/09 08:31 PM
On Jul
31, 2009 the U.S. Securities and Exchange
Commission (SEC) filed a settled
enforcement of $600,000 against Nature's
Sunshine Products Inc. (NSP) and $25,000 against
NSP Chief Executive Officer Douglas Faggioli and
former Chief Financial Officer Craig D. Huff.
NSP’s Brazilian subsidiary allegedly paid the
Brazilian custom officials to import
unregistered products into Brazil and
subsequently falsified its books and records to
conceal the payments.
The SEC based its charge on NSP’s violations of the anti-bribery provision of the Foreign Corrupt Practices Act (FCPA). But, according to Philip Urofsky, a former federal prosecutor of FCPA claims, the SEC also invoked, for the first time, Section 20(a) of the Securities Exchange Act of 1934 to hold NSP’s officers liable.
In an interview with the National Law Journal on Control Person Liability theory, Mr. Urofsky, who now is a partner in the Washington office of New York's Shearman & Sterling, described this theory as an easy way to hold corporate individuals: the executives, directors, and accountants liable for the corporation’s books, records and internal controls violations “without pleading any knowledge or culpable involvement in the underlying bribes or accounting issues.”
The SEC based its charge on NSP’s violations of the anti-bribery provision of the Foreign Corrupt Practices Act (FCPA). But, according to Philip Urofsky, a former federal prosecutor of FCPA claims, the SEC also invoked, for the first time, Section 20(a) of the Securities Exchange Act of 1934 to hold NSP’s officers liable.
In an interview with the National Law Journal on Control Person Liability theory, Mr. Urofsky, who now is a partner in the Washington office of New York's Shearman & Sterling, described this theory as an easy way to hold corporate individuals: the executives, directors, and accountants liable for the corporation’s books, records and internal controls violations “without pleading any knowledge or culpable involvement in the underlying bribes or accounting issues.”
KBR & Halliburton Agree to $579 Million Settlement for Violations of the Foreign Corrupt Practices Act
02/12/09 05:28 PM
The
DOJ
announced on February 11,
2009, that Kellogg Brown & Root LLC (KBR), a
global engineering, construction and services
company based in Houston, pleaded guilty to charges
related to the Foreign Corrupt Practices Act (FCPA)
for its participation in a decade-long scheme to
bribe Nigerian government officials to obtain
engineering, procurement and construction (EPC)
contracts. The contracts to build liquefied natural
gas (LNG) facilities on Bonny Island, Nigeria, were
valued at more than $6 billion. KBR agreed to pay a
$402 million criminal fine. According to court
documents, KBR was part of a four-company joint
venture that was awarded four EPC contracts by
Nigeria LNG Ltd. (NLNG) between 1995 and 2004 to
build LNG facilities on Bonny Island. The
government-owned Nigerian National Petroleum
Corporation (NNPC) was the largest shareholder of
NLNG, owning 49 percent of the company. Under the
terms of the plea agreement, KBR agreed to retain
an independent compliance monitor for a three-year
period to review the design and implementation of
KBR's compliance program and to make reports to KBR
and the Department of Justice. KBR also agreed to
cooperate with the Department in its ongoing
investigations. KBR's parent company, KBR
Inc., and its former parent company, Halliburton
Company, also reached a settlement of a related
civil complaint filed by the U.S. Securities and
Exchange Commission (SEC). The SEC's complaint
charged KBR Inc. with violating the FCPA's
anti-bribery provisions, and charged KBR and
Halliburton with engaging in books and records and
internal controls violations related to the
bribery. KBR Inc. and Halliburton jointly
agreed to pay $177 million in disgorgement of
profits relating to those violations.
Combined, the $579 million in fines constitutes the largest settlement of FCPA violations by any U.S. company in history.
Combined, the $579 million in fines constitutes the largest settlement of FCPA violations by any U.S. company in history.
Physicist Charged with Arms Export and Foreign Corrupt Practices Act Violations
09/25/08 07:21 PM
On
September 24, 2008, Shu Quan-Sheng, a PhD
physicist, was arrested in Newport
News, VA on charges of illegally exporting space
launch technical data and services to China and
offering bribes to Chinese government officials.
Dr. Shu, born in China and a naturalized U.S.
citizen, is the President, Secretary and
Treasurer of AMAC International (AMAC), a
Newport News high-tech company that also has an
office in Beijing, China.
Dr. Shu is charged with unlawfully exporting a defense service to foreign persons without obtaining permission, in violation of the Arms Export Control Act (AECA), and bribing, offering a bribe, and attempting to bribe a foreign government official, in violation of the Foreign Corrupt Practices Act (FCPA).
The criminal complaint states that in January 2003, Dr. Shu provided technical assistance and foreign technology acquisition expertise to several Chinese government entities involved in the building of a space launch facility in Hainan, China. The facility is designated to house liquid-propelled heavy payload launch vehicles designed to send space stations and satellites into orbit, as well as provide support for manned space flight and future lunar missions.
Specifically, the complaint charges that Dr. Shu has participated in China’s systematic effort to upgrade their space exploitation and satellite technology capabilities by providing technical expertise and foreign technology acquisition in the fields of cryogenic pumps, valves, transfer lines and refrigeration equipment, elements necessary for the use of liquefied hydrogen in the Hainan facility. Dr. Shu is also said to have been instrumental in arranging for various Chinese officials to visit various European space launch facilities and hydrogen / storage facilities.
There were several Chinese government entities involved in building of the space launch facility, including the People’s Liberation Army’s General Armaments Department and the 101st Research Institute, which is overseen by the Commission of Science Technology and Industry for the National Defense as one of the research institutions that makes up the China Academy of Launch Vehicle Technology. Another entity involved is the Beijing Special Engineering Design Research Institute, which is responsible for the procurement of cryogenic liquid storage tanks for the Hainan launch facility.
The complaint also charges Dr. Shu with violations of the FCPA. Dr. Shu is said to have offered bribes to the 101st Research Institute government officials to induce the award of the hydrogen liquefier contract to a French company Dr. Shu represented. The value of the contract is believed to be around $4 million. According to the complaint, in December 2003, Dr. Shu and his company entered into an agreement with the French company establishing AMAC and positioning Dr. Shu as the French company’s representative in China. The agreement provided that AMAC was entitled to a success fee of ten to fifteen percent.
The maximum penalty for each AECA violation is 10 years imprisonment. Violation of FCPA carries a 5-year sentence.
Dr. Shu is charged with unlawfully exporting a defense service to foreign persons without obtaining permission, in violation of the Arms Export Control Act (AECA), and bribing, offering a bribe, and attempting to bribe a foreign government official, in violation of the Foreign Corrupt Practices Act (FCPA).
The criminal complaint states that in January 2003, Dr. Shu provided technical assistance and foreign technology acquisition expertise to several Chinese government entities involved in the building of a space launch facility in Hainan, China. The facility is designated to house liquid-propelled heavy payload launch vehicles designed to send space stations and satellites into orbit, as well as provide support for manned space flight and future lunar missions.
Specifically, the complaint charges that Dr. Shu has participated in China’s systematic effort to upgrade their space exploitation and satellite technology capabilities by providing technical expertise and foreign technology acquisition in the fields of cryogenic pumps, valves, transfer lines and refrigeration equipment, elements necessary for the use of liquefied hydrogen in the Hainan facility. Dr. Shu is also said to have been instrumental in arranging for various Chinese officials to visit various European space launch facilities and hydrogen / storage facilities.
There were several Chinese government entities involved in building of the space launch facility, including the People’s Liberation Army’s General Armaments Department and the 101st Research Institute, which is overseen by the Commission of Science Technology and Industry for the National Defense as one of the research institutions that makes up the China Academy of Launch Vehicle Technology. Another entity involved is the Beijing Special Engineering Design Research Institute, which is responsible for the procurement of cryogenic liquid storage tanks for the Hainan launch facility.
The complaint also charges Dr. Shu with violations of the FCPA. Dr. Shu is said to have offered bribes to the 101st Research Institute government officials to induce the award of the hydrogen liquefier contract to a French company Dr. Shu represented. The value of the contract is believed to be around $4 million. According to the complaint, in December 2003, Dr. Shu and his company entered into an agreement with the French company establishing AMAC and positioning Dr. Shu as the French company’s representative in China. The agreement provided that AMAC was entitled to a success fee of ten to fifteen percent.
The maximum penalty for each AECA violation is 10 years imprisonment. Violation of FCPA carries a 5-year sentence.
Company Agrees to Pay $22 Million Penalty for FCPA Violations
05/15/08 10:48 PM
On May
14, 2008, the Department of Justice (DOJ)
announced that
Willbros Group Inc., a publicly traded company
that provides construction, engineering, and
other services in the oil and gas industry, and
its wholly owned subsidiary, Wilbros
International Inc. have agreed to pay a $22
million penalty in connection with corrupt
payments to Nigerian and Ecuadorean government
officials in violation of the Foreign Corrupt
Practices Act (FCPA).
The DOJ stated:
The DOJ stated:
According to the criminal information, from late 2003 through March 2005, Willbros employees agreed to make corrupt payments totaling more than $6.3 million to Nigerian government officials to assist in obtaining and retaining a $387 million contract for work on a major engineering, procurement and construction gas pipeline project known as the Eastern Gas Gathering System (EGGS). In exchange for the EGGS project, the conspirators corruptly paid, promised to pay and authorized payments to officials of the Nigerian National Petroleum Corporation (NNPC), the state-owned oil company in Nigeria; NNPC’s subsidiary, the National Petroleum Investment Management Services (NAPIMS); a senior official in the executive branch of the Nigerian federal government; officials of a multinational oil company serving as the operator of the EGGS joint venture; and a political party.
In recognition of Willbros' thorough review of the improper payments, the companies’ exemplary cooperation, the companies’ implementation of enhanced compliance policies and procedures, and the companies’ engagement of an independent corporate monitor, the Department has agreed to defer prosecution of these companies for three years. If Willbros Group and Willbros International abide by the terms of the agreement, the Department will dismiss the criminal information when the term of the agreement ends.