Archive

September 29, 2016

Och-Ziff Capital Management Group will pay nearly $200 million to settle civil charges of violating the Foreign Corrupt Practices Act (FCPA).  Och-Ziff CEO  Daniel S. Och and Och-Ziff CFO Joel M. Frank will pay nearly $2.2 million to settle charges that they caused certain violations.  The SEC detected the misconduct while proactively scrutinizing the way that financial services firms were obtaining investments from sovereign wealth funds overseas.  The SEC’s subsequent investigation of Och-Ziff found that the fund used intermediaries, agents, and business partners to pay bribes to high-level government officials in Africa.  According to the SEC’s order, the illicit payments induced the Libyan Investment Authority sovereign wealth fund to invest in Och-Ziff managed funds.  Other bribes were paid to secure mining rights and corruptly influence government officials in Libya, Chad, Nigeria, Guinea, and the Democratic Republic of the Congo.  As part of its settlement agreement with the SEC, Och-Ziff acknowledged that it expected to enter into a deferred prosecution agreement with the Justice Department in a parallel criminal proceeding and its subsidiary OZ Africa Management GP LLC agreed to enter into a plea agreement.  Och-Ziff is expected to pay a criminal penalty of $213 million.  SEC

September 28, 2016

Anheuser-Busch InBev will pay $6 million to settle charges that it violated the Foreign Corrupt Practices Act (FCPA) and chilled a whistleblower who reported the misconduct.  An investigation found that the company used third-party sales promoters to make improper payments to government officials in India to increase the sales and production of Anheuser-Busch products in the country.  The SEC’s order further found that Anheuser-Busch improperly chilled whistleblower activity by entering into a separation agreement that stopped an employee from continuing to voluntarily communicate with the SEC about potential FCPA violations by imposing substantial financial penalties for violating strict non-disclosure terms.  SEC

July 25, 2016

Chile-based commercial airline LATAM Airlines Group S.A. (TAM) agreed to pay a $12.75 million criminal penalty in connection with a scheme to pay bribes to Argentine union officials via a false consulting contract with a third-party intermediary in violation of the accounting provisions of the Foreign Corrupt Practices Act (FCPA).  According to the company's admissions, executives at LATAM’s predecessor-in-interest, LAN Airlines S.A. (LAN), executed a fictitious $1.15 million consulting agreement with an advisor to the Secretary of Argentina’s Ministry of Transportation.  Although the agreement purportedly required the consultant to undertake a study of Argentine airline routes, the consultant never provided any such services and instead funneled the monies to Argentine labor union officials in exchange for the union agreeing to accept lower wages and not enforce what would have been a costly labor rule.  DOJ

June 21, 2016

Massachusetts-based medical device manufacturer Analogic Corp. and its wholly-owned Danish subsidiary, BK Medical ApS, will pay nearly $15 million to settle parallel civil and criminal actions involving Foreign Corrupt Practices Act violations.  An SEC investigation found that BK Medical engaged in hundreds of sham transactions with distributors that funneled about $20 million to third parties, including individuals in Russia and apparent shell companies in Belize, the British Virgin Islands, Cyprus, and Seychelles.  According to the SEC’s order, from at least 2001 through 2011, at the direction of its distributors, BK Medical participated in hundreds of highly suspicious transactions that posed a significant risk of bribery or other improper conduct, such as embezzlement or tax evasion.  SEC

June 7, 2016

Rhode Island-based residential and commercial building products manufacturer Nortek, Inc. will pay more than $300,000 pursuant to a non-prosecution agreement with the SEC.  Nortek self-reported violations of the Foreign Corrupt Practices Act after finding that a foreign subsidiary had made improper payments of approximately $290,000 to Chinese officials to obtain preferential treatment for Nortek, relaxed regulatory oversight, and reduced customs duties, taxes, and fees.  SEC

June 7, 2016

Massachusetts-based internet services provider Akamai Technologies will pay more than $650,000 pursuant to a non-prosecution agreement with the SEC.  Akamai self-reported violations of the Foreign Corrupt Practices Act after finding that a foreign subsidiary arranged for $40,000 in payments to Chinese officials to induce government-owned entities to purchase more services than they actually needed.  SEC

June 21, 2016

Denmark-based ultrasound equipment maker BK Medical ApS, a subsidiary of Massachusetts technology company Analogic Corporation, agreed to pay $3.4 million to resolve allegations it violated the Foreign Corrupt Practices Act through making improper payments to doctors employed by Russian state-owned entities.  DOJ

April 20, 2016

Dmitrij Harder, former owner and president of Chestnut Consulting Group Inc. and Chestnut Consulting Group Co. pleaded guilty to bribing an official at the European Bank for Reconstruction and Development in violation of the Foreign Corrupt Practices Act.  According to admissions made with Harder’s plea, the EBRD was a multilateral development bank headquartered in London that was owned by more than 60 sovereign nations and provided financing for development projects in emerging economies, primarily in Eastern Europe.  Harder admitted he engaged in a scheme to pay approximately $3.5 million in bribes to an EBRD official to corruptly influence the official’s actions on applications for EBRD financing submitted by the Chestnut Group’s clients and to influence the official to direct business to the Chestnut Group.  DOJ

April 7, 2016

Resort company Las Vegas Sands Corp. (LVS) will pay $9 million to settle charges of violating the Foreign Corrupt Practices Act (FCPA).  An SEC investigation found that LVS kept inaccurate books and records and frequently lacked supporting documentation or proper approvals for more than $62 million in payments to a consultant in Asia.  The consultant acted as an intermediary to obscure the company’s role in certain business transactions, such as the purchase of a basketball team to play in the Chinese Basketball Association (which does not permit gaming companies to own team) or the purchase of a building in Beijing from a state-owned company (where casino gambling is not permitted).  SEC

March 23, 2016

Abraham Jose Shiera Bastidas, the owner of multiple U.S.-based energy companies, pleaded guilty to violating the Foreign Corrupt Practices Act by paying bribes to secure energy contracts from Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A.  DOJ