FROM: U.S. DEPARTMENT OF JUSTICE
Tuesday, July 30, 2013
Former Senior Executive of French Power Company Charged in Connection with Foreign Bribery Scheme
A former senior executive of a French power and transportation company has been charged in a second superseding indictment for his alleged participation in a scheme to pay bribes to foreign government officials.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Acting U.S. Attorney Deirdre M. Daly of the District of Connecticut and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.
Lawrence Hoskins, 62, a former senior vice president for the Asia region for the French company, was charged in the District of Connecticut with conspiring to violate the Foreign Corrupt Practices Act (FCPA) and to launder money, as well as substantive FCPA and money laundering violations. William Pomponi, a former executive of the Connecticut-based subsidiary of the power and transportation company who was previously charged in a superseding indictment on April 30, 2013, was charged with Hoskins in the second superseding indictment.
Frederic Pierucci, a current company executive who was previously charged in this case, pleaded guilty yesterday to one count of conspiring to violate the FCPA and one count of violating the FCPA. Charges against Pierucci were initially unsealed on April 16, 2013, along with a guilty plea by David Rothschild, a former vice president of regional sales at the Connecticut-based subsidiary, in connection with the bribery scheme. Rothschild pleaded guilty on Nov. 2, 2012.
According to the charges, the defendants, together with others, allegedly paid bribes to officials in Indonesia – including a member of the Indonesian Parliament and high-ranking members of Perusahaan Listrik Negara (PLN), the state-owned and state-controlled electricity company in Indonesia – in exchange for assistance in securing a $118 million contract, known as the Tarahan project, for the company and its consortium partner to provide power-related services for the citizens of Indonesia. To conceal the bribes, the defendants retained two consultants purportedly to provide legitimate consulting services on behalf of the power company and its subsidiaries in connection with the Tarahan project. The indictment, however, alleges that the primary purpose for hiring the consultants was to use the consultants to pay bribes to Indonesian officials.
The first consultant retained by the defendants allegedly received hundreds of thousands of dollars in his Maryland bank account to be used to bribe the member of Parliament. The consultant then allegedly transferred the bribe money to a bank account in Indonesia for the benefit of the official. According to court documents, emails between Hoskins, Pomponi, Pierucci, Rothschild and their co-conspirators discuss in detail the use of the first consultant to funnel bribes to the member of Parliament and the influence that the member of Parliament could exert over the Tarahan project.
Court documents allege that in the fall of 2003, Hoskins, Pomponi, Pierucci and others determined that the first consultant was not effectively bribing key officials at PLN. One email between employees of the power company’s subsidiary in Indonesia described PLN officials’ “concern that if we have won the job, whether their rewards will still be satisfactory or this agent only give them pocket money and disappear.” In another email, an employee at the power company’s subsidiary in Indonesia sent an email to Hoskins asserting that the consultant “has no grip on the PLN Tender team at all” and “is more or less similar to [a] cashier which I feel we pay too much.” As a result, the co-conspirators allegedly retained a second consultant to more effectively bribe PLN officials. The charges allege that the power company deviated from its usual practice of paying consultants on a pro-rata basis in order to make a much larger up-front payment to the second consultant so that the consultant could “get the right influence.” An employee at the power company’s subsidiary in Indonesia sent an email to Hoskins, Pomponi, Pierucci and others asking them to finalize the consultancy agreement with the front-loaded payments but stated that in the meantime the employee would give his word to a high-level official at PLN, according to the charges. The defendants and their co-conspirators were successful in securing the Tarahan project and subsequently made payments to the consultants for the alleged purpose of bribing the Indonesian officials.
The conspiracy to commit violations of the FCPA count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The substantive FCPA counts each carry a maximum penalty of five years in prison and a fine of the greater of $100,000 or twice the value gained or lost. The conspiracy to commit money laundering count carries a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. The substantive money laundering counts each carry a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction.
An indictment is merely an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case is being investigated by FBI agents who are part of the Washington Field Office’s dedicated FCPA squad, with assistance from the Meriden, Conn., Resident Agency of the FBI. Significant assistance was provided by the Criminal Division’s Office of International Affairs, and the Department has also worked closely with its law enforcement counterparts in Indonesia at the Komisi Pemberantasan Korupsi (Corruption Eradication Commission) and deeply appreciates KPK’s assistance in this matter.
The case is being prosecuted by Trial Attorney Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David E. Novick of the District of Connecticut.
Showing posts with label FCPA. Show all posts
Showing posts with label FCPA. Show all posts
Sunday, August 4, 2013
Monday, June 24, 2013
KEYNOTE ADDRESS AT THE GLOBAL ANTI-CORRUPTION CONGRESS
FROM: U.S. DEPARTMENT OF JUSTICE
Acting Assistant Attorney General Mythili Raman Delivers Keynote Address at the Global Anti-Corruption Congress
~ Monday, June 17, 2013
Thank you, [Kimberly Parker of Wilmer Hale], for that kind introduction. I appreciate your warm welcome, and I am so pleased to be here today to address this audience.
I began my career as a federal prosecutor almost 17 years ago in the Justice Department’s Criminal Division, and I have been honored, over the last several months, to serve as Acting Assistant Attorney General of the Division. The work of the Criminal Division is extraordinarily wide-ranging – from fighting financial fraud, to dismantling drug cartels, combating cybercrime, and prosecuting dangerous organized crime groups. Today, I want to focus my remarks on one of our most important enforcement priorities – our efforts to combat corruption around the world.
Corruption corrodes the public trust in countries both rich and poor, and inflicts particular harm on emerging economies. When a developing country’s public officials abuse their power for personal gain, its people suffer. Political institutions lose legitimacy, threatening democratic stability and the rule of law; and people lose hope that they will ever be able to improve their lot. When corruption takes hold, the fundamental notion of playing-by-the-rules gets pushed to the side, and individuals, businesses and governments instead begin to operate under a fundamentally unfair – and destabilizing – set of norms. This undermines confidence in the markets and governments, and destroys the sense of fair play that is absolutely critical for the rule of law to prevail.
For these reasons, fighting global corruption is, and always will be, a core priority of the Department of Justice. Since 2005, the Department has secured close to three dozen corporate guilty pleas in FCPA cases. And just since 2009, the Department has entered into over 40 corporate resolutions, including nine of the top 10 biggest resolutions ever in terms of penalties, resulting in approximately $2.5 billion in monetary fines. And, perhaps most important, in that same period, we have successfully secured the convictions of over three dozen individuals for engaging in foreign bribery schemes.
Our recent string of successful prosecutions of corporate executives is worth highlighting. Those actions show, in concrete terms, that we are not going away – indeed, our efforts to fight foreign bribery are more robust than ever. By redoubling our commitment to bring to justice those individuals who bribe for business, we are sending an unmistakable message to corporate executives around the world – if you engage in corrupt conduct, you should be prepared to face very real consequences, including jail time.
Our enforcement record in this area speaks for itself. In just the last two months, in federal districts across the country, we have announced charges or guilty pleas against 12 executives and others on foreign bribery-related charges:
• In Tulsa, Okla., we announced charges against four former executives of BizJet International, an aircraft services company, for participating in a scheme to pay bribes to government officials in Latin America;
• In federal court in New York, we charged a French citizen with attempting to obstruct an ongoing investigation into whether a company paid bribes to win lucrative mining rights in the Republic of Guinea;
• In Connecticut, we announced charges against one current and one former executive, and secured a guilty plea from another former executive of a U.S. subsidiary of a French power and transportation company that paid bribes to Indonesian officials;
• In Houston, we secured a 15-month prison sentence against a former consultant for Willbros International Inc. for his role in a conspiracy to pay more than $6 million in bribes to Nigerian government and political party officials; and
• And, in Manhattan, we charged three employees of a U.S. broker-dealer – including one just last week – as well as a senior official in Venezuela’s state economic development bank for their roles in a bribery scheme designed to steer the state bank’s financial trading business to the broker-dealer.
The message to be drawn from these prosecutions over the last few months is clear: we are now – more than ever – holding individual wrongdoers to account.
In addition to our stepped-up prosecutions of individuals, our recent enforcement actions against French oil and gas company Total highlight another important shift in the anti-corruption realm – the development of stronger anti-bribery enforcement programs in foreign countries, the continuing and encouraging rise in cross-border cooperation, and the increasing efforts of our foreign law enforcement partners to hold individual perpetrators accountable. Just this last month, on the same day that the Justice Department and SEC resolved criminal and civil foreign bribery charges with Total, French enforcement authorities requested that Total, Total’s Chairman and Chief Executive Officer, and two additional individuals be referred to the French Criminal Court for violations of French law, including France’s foreign bribery law. The Total case represents the first ever coordinated action by U.S. and French law enforcement in a foreign bribery case; and because of that close collaboration, Total now faces criminal consequences across two continents. This unprecedented, joint action by U.S. and French authorities reflects our renewed commitment to work as closely as we can with our foreign counterparts to stamp out bribery across the globe.
Meanwhile, countries around the world are passing new anti-bribery legislation, or revising outdated laws, and more countries are joining international bodies such as the OECD Working Group on Bribery. And each day, more countries are joining the fight. Just in the past few years, Russia and China have outlawed foreign bribery, and India may soon join that list. Earlier this year, Colombia became the 40th party to the OECD Anti-Bribery Convention. Through our increased work on prosecutions with our foreign counterparts and our participation in various multi-lateral fora like the OECD and United Nations, it is safe to say that we are cooperating with foreign law enforcement on foreign bribery cases more closely today than at any time in history.
This type of collaboration is absolutely critical if we are going to have a meaningful impact on corruption internationally. As our economies become more interdependent, corruption itself is increasingly transnational. What may be a domestic corruption concern for one country may very well be a foreign bribery concern for another.
Of course, the upsurge in foreign enforcement and global collaboration did not happen overnight or by accident. It is, instead, the product of hard work and strategic coordination – including face-to-face engagements that have allowed us to forge the partnerships that are essential to fight global corruption. In February of this year, for example, the Justice Department, SEC, and FBI hosted about 130 judges, prosecutors, investigators, and regulators from more than 30 countries, multi-development banks, and international organizations around the world for a training course to exchange ideas and best practices on combating foreign corruption. This unprecedented meeting provided a critical opportunity to meet our partners, discuss cases, identify new opportunities to collaborate, and improve our intelligence sharing. Needless to say, we were able to advance a number of specific prosecutions through that meeting and, as important, forge new bonds with an entire generation of prosecutors dedicated to combating global corruption.
These day-to-day efforts by the Justice Department and our counterparts around the world might not be visible to the public, but the fruits of these efforts are. Many of you have heard, for example, of the Siemens prosecution, which began with dawn raids not by U.S. authorities, but by the Munich Public Prosecutor’s Office. And long before the U.K. Bribery Act was even proposed, we were working together with the U.K.’s Serious Fraud Office to bring cases against U.S. and U.K. companies alike, as well as their executives and agents involved in bribery schemes. Our friends in Canada, meanwhile, have also increased their anti-corruption resources with two Royal Canadian Mounted Police units focused on international corruption, and the results speak for themselves with two major cases being brought against Niko Resources and Griffiths International in the past few years. We have worked with our partners in Thailand on the Gerald and Patricia Green case, involving bribes paid to a Thai official in exchange for a series of government contracts; and in Costa Rica, on the Sapsizian and Alcatel matters, we worked with our partners to prosecute cases involving corrupt payments to Costa Rican government officials, including the payment of bribes to obtain a mobile telephone contract from the state-owned telecommunications authority. All of these prosecutions are a testament to what we can do when we work hand-in-glove with our foreign partners.
Another important manifestation of our international collaboration on foreign bribery is the peer-review monitoring system of the OECD Working Group on Bribery, which is considered by Transparency International to be the "gold standard" of monitoring, and has resulted in remarkable improvements in anti-bribery enforcement around the world. This review process is rigorous, and we see our role in this process to be mission critical, as it is one of the best ways to level the playing field for U.S. companies doing business abroad. In fact, just last month, we sent a seasoned foreign bribery prosecutor to Moscow to help lead the Phase 2 review of Russia, and we will be sending another foreign bribery prosecutor to review South Africa, the only country in Africa to be a member of the Working Group on Bribery.
But we do more than conduct reviews; we are subject to them, too. In October 2010, we underwent a Working Group review, and one of the recommendations from that report was part of the impetus behind the Justice Department’s and SEC’s Resource Guide to the U.S. Foreign Corrupt Practices Act. The Guide may be the most comprehensive effort ever undertaken by either the Justice Department or the SEC to explain our approach to enforcing a particular statute. And, we have received extremely positive reviews about the Guide from the business and legal communities. In particular, we have heard praise from numerous compliance and ethics officers, who have focused on our Ten Hallmarks of an Effective Compliance Program and have even told us that they are incorporating the Guide into their in-house training programs.
All of these achievements are the product of years of work by a talented corps of dedicated and tenacious prosecutors in the Criminal Division’s Fraud Section, who team up with similarly committed prosecutors in United States Attorneys’ Offices throughout the country to enforce the FCPA. Simply put, our global anti-corruption mission is now ingrained in the Criminal Division’s DNA, and the FCPA is now a reality that companies know they must live with and adjust to; and this nation, and the world, are better off for it. Notably, moreover, our FCPA prosecutors are not alone in our fight against corruption. Our Public Integrity Section, everyday, prosecutes corruption cases involving federal, state, and local officials – indeed, just last week, our Public Integrity prosecutors secured an important conviction against former Congressman Richard Renzi. And, through our Kleptocracy Asset Recovery Initiative, prosecutors in our Asset Forfeiture and Money Laundering Section are working to identify the proceeds of foreign official corruption, seize them, and repatriate the recouped funds for the benefit of the people harmed. And our Office of Overseas Prosecutorial Development and Training, known as OPDAT, and our International Criminal Investigative Training Assistance Program, known as ICITAP, deploy prosecutors and police officers around the globe to establish rule of law programs and ensure – through those programs and training – that corruption does not take hold.
As head of the Criminal Division, I am acutely aware that we have many urgent law enforcement priorities – indeed, every day, our prosecutors work to combat violent crime, financial fraud, cybercrime, and organized crime. Yet, even with all these competing demands, I am here to tell you that fighting global corruption will remain a mainstay of the Criminal Division’s mission. Indeed, with the momentum of so many countries behind us, I am certain that now is the time to enhance, not diminish, our anti-corruption efforts. The fight against global corruption is a critical mission, and one I’m very proud to be part of.
Thank you for inviting me to speak with you today. It has been a privilege to be here.
Acting Assistant Attorney General Mythili Raman Delivers Keynote Address at the Global Anti-Corruption Congress
~ Monday, June 17, 2013
Thank you, [Kimberly Parker of Wilmer Hale], for that kind introduction. I appreciate your warm welcome, and I am so pleased to be here today to address this audience.
I began my career as a federal prosecutor almost 17 years ago in the Justice Department’s Criminal Division, and I have been honored, over the last several months, to serve as Acting Assistant Attorney General of the Division. The work of the Criminal Division is extraordinarily wide-ranging – from fighting financial fraud, to dismantling drug cartels, combating cybercrime, and prosecuting dangerous organized crime groups. Today, I want to focus my remarks on one of our most important enforcement priorities – our efforts to combat corruption around the world.
Corruption corrodes the public trust in countries both rich and poor, and inflicts particular harm on emerging economies. When a developing country’s public officials abuse their power for personal gain, its people suffer. Political institutions lose legitimacy, threatening democratic stability and the rule of law; and people lose hope that they will ever be able to improve their lot. When corruption takes hold, the fundamental notion of playing-by-the-rules gets pushed to the side, and individuals, businesses and governments instead begin to operate under a fundamentally unfair – and destabilizing – set of norms. This undermines confidence in the markets and governments, and destroys the sense of fair play that is absolutely critical for the rule of law to prevail.
For these reasons, fighting global corruption is, and always will be, a core priority of the Department of Justice. Since 2005, the Department has secured close to three dozen corporate guilty pleas in FCPA cases. And just since 2009, the Department has entered into over 40 corporate resolutions, including nine of the top 10 biggest resolutions ever in terms of penalties, resulting in approximately $2.5 billion in monetary fines. And, perhaps most important, in that same period, we have successfully secured the convictions of over three dozen individuals for engaging in foreign bribery schemes.
Our recent string of successful prosecutions of corporate executives is worth highlighting. Those actions show, in concrete terms, that we are not going away – indeed, our efforts to fight foreign bribery are more robust than ever. By redoubling our commitment to bring to justice those individuals who bribe for business, we are sending an unmistakable message to corporate executives around the world – if you engage in corrupt conduct, you should be prepared to face very real consequences, including jail time.
Our enforcement record in this area speaks for itself. In just the last two months, in federal districts across the country, we have announced charges or guilty pleas against 12 executives and others on foreign bribery-related charges:
• In Tulsa, Okla., we announced charges against four former executives of BizJet International, an aircraft services company, for participating in a scheme to pay bribes to government officials in Latin America;
• In federal court in New York, we charged a French citizen with attempting to obstruct an ongoing investigation into whether a company paid bribes to win lucrative mining rights in the Republic of Guinea;
• In Connecticut, we announced charges against one current and one former executive, and secured a guilty plea from another former executive of a U.S. subsidiary of a French power and transportation company that paid bribes to Indonesian officials;
• In Houston, we secured a 15-month prison sentence against a former consultant for Willbros International Inc. for his role in a conspiracy to pay more than $6 million in bribes to Nigerian government and political party officials; and
• And, in Manhattan, we charged three employees of a U.S. broker-dealer – including one just last week – as well as a senior official in Venezuela’s state economic development bank for their roles in a bribery scheme designed to steer the state bank’s financial trading business to the broker-dealer.
The message to be drawn from these prosecutions over the last few months is clear: we are now – more than ever – holding individual wrongdoers to account.
In addition to our stepped-up prosecutions of individuals, our recent enforcement actions against French oil and gas company Total highlight another important shift in the anti-corruption realm – the development of stronger anti-bribery enforcement programs in foreign countries, the continuing and encouraging rise in cross-border cooperation, and the increasing efforts of our foreign law enforcement partners to hold individual perpetrators accountable. Just this last month, on the same day that the Justice Department and SEC resolved criminal and civil foreign bribery charges with Total, French enforcement authorities requested that Total, Total’s Chairman and Chief Executive Officer, and two additional individuals be referred to the French Criminal Court for violations of French law, including France’s foreign bribery law. The Total case represents the first ever coordinated action by U.S. and French law enforcement in a foreign bribery case; and because of that close collaboration, Total now faces criminal consequences across two continents. This unprecedented, joint action by U.S. and French authorities reflects our renewed commitment to work as closely as we can with our foreign counterparts to stamp out bribery across the globe.
Meanwhile, countries around the world are passing new anti-bribery legislation, or revising outdated laws, and more countries are joining international bodies such as the OECD Working Group on Bribery. And each day, more countries are joining the fight. Just in the past few years, Russia and China have outlawed foreign bribery, and India may soon join that list. Earlier this year, Colombia became the 40th party to the OECD Anti-Bribery Convention. Through our increased work on prosecutions with our foreign counterparts and our participation in various multi-lateral fora like the OECD and United Nations, it is safe to say that we are cooperating with foreign law enforcement on foreign bribery cases more closely today than at any time in history.
This type of collaboration is absolutely critical if we are going to have a meaningful impact on corruption internationally. As our economies become more interdependent, corruption itself is increasingly transnational. What may be a domestic corruption concern for one country may very well be a foreign bribery concern for another.
Of course, the upsurge in foreign enforcement and global collaboration did not happen overnight or by accident. It is, instead, the product of hard work and strategic coordination – including face-to-face engagements that have allowed us to forge the partnerships that are essential to fight global corruption. In February of this year, for example, the Justice Department, SEC, and FBI hosted about 130 judges, prosecutors, investigators, and regulators from more than 30 countries, multi-development banks, and international organizations around the world for a training course to exchange ideas and best practices on combating foreign corruption. This unprecedented meeting provided a critical opportunity to meet our partners, discuss cases, identify new opportunities to collaborate, and improve our intelligence sharing. Needless to say, we were able to advance a number of specific prosecutions through that meeting and, as important, forge new bonds with an entire generation of prosecutors dedicated to combating global corruption.
These day-to-day efforts by the Justice Department and our counterparts around the world might not be visible to the public, but the fruits of these efforts are. Many of you have heard, for example, of the Siemens prosecution, which began with dawn raids not by U.S. authorities, but by the Munich Public Prosecutor’s Office. And long before the U.K. Bribery Act was even proposed, we were working together with the U.K.’s Serious Fraud Office to bring cases against U.S. and U.K. companies alike, as well as their executives and agents involved in bribery schemes. Our friends in Canada, meanwhile, have also increased their anti-corruption resources with two Royal Canadian Mounted Police units focused on international corruption, and the results speak for themselves with two major cases being brought against Niko Resources and Griffiths International in the past few years. We have worked with our partners in Thailand on the Gerald and Patricia Green case, involving bribes paid to a Thai official in exchange for a series of government contracts; and in Costa Rica, on the Sapsizian and Alcatel matters, we worked with our partners to prosecute cases involving corrupt payments to Costa Rican government officials, including the payment of bribes to obtain a mobile telephone contract from the state-owned telecommunications authority. All of these prosecutions are a testament to what we can do when we work hand-in-glove with our foreign partners.
Another important manifestation of our international collaboration on foreign bribery is the peer-review monitoring system of the OECD Working Group on Bribery, which is considered by Transparency International to be the "gold standard" of monitoring, and has resulted in remarkable improvements in anti-bribery enforcement around the world. This review process is rigorous, and we see our role in this process to be mission critical, as it is one of the best ways to level the playing field for U.S. companies doing business abroad. In fact, just last month, we sent a seasoned foreign bribery prosecutor to Moscow to help lead the Phase 2 review of Russia, and we will be sending another foreign bribery prosecutor to review South Africa, the only country in Africa to be a member of the Working Group on Bribery.
But we do more than conduct reviews; we are subject to them, too. In October 2010, we underwent a Working Group review, and one of the recommendations from that report was part of the impetus behind the Justice Department’s and SEC’s Resource Guide to the U.S. Foreign Corrupt Practices Act. The Guide may be the most comprehensive effort ever undertaken by either the Justice Department or the SEC to explain our approach to enforcing a particular statute. And, we have received extremely positive reviews about the Guide from the business and legal communities. In particular, we have heard praise from numerous compliance and ethics officers, who have focused on our Ten Hallmarks of an Effective Compliance Program and have even told us that they are incorporating the Guide into their in-house training programs.
All of these achievements are the product of years of work by a talented corps of dedicated and tenacious prosecutors in the Criminal Division’s Fraud Section, who team up with similarly committed prosecutors in United States Attorneys’ Offices throughout the country to enforce the FCPA. Simply put, our global anti-corruption mission is now ingrained in the Criminal Division’s DNA, and the FCPA is now a reality that companies know they must live with and adjust to; and this nation, and the world, are better off for it. Notably, moreover, our FCPA prosecutors are not alone in our fight against corruption. Our Public Integrity Section, everyday, prosecutes corruption cases involving federal, state, and local officials – indeed, just last week, our Public Integrity prosecutors secured an important conviction against former Congressman Richard Renzi. And, through our Kleptocracy Asset Recovery Initiative, prosecutors in our Asset Forfeiture and Money Laundering Section are working to identify the proceeds of foreign official corruption, seize them, and repatriate the recouped funds for the benefit of the people harmed. And our Office of Overseas Prosecutorial Development and Training, known as OPDAT, and our International Criminal Investigative Training Assistance Program, known as ICITAP, deploy prosecutors and police officers around the globe to establish rule of law programs and ensure – through those programs and training – that corruption does not take hold.
As head of the Criminal Division, I am acutely aware that we have many urgent law enforcement priorities – indeed, every day, our prosecutors work to combat violent crime, financial fraud, cybercrime, and organized crime. Yet, even with all these competing demands, I am here to tell you that fighting global corruption will remain a mainstay of the Criminal Division’s mission. Indeed, with the momentum of so many countries behind us, I am certain that now is the time to enhance, not diminish, our anti-corruption efforts. The fight against global corruption is a critical mission, and one I’m very proud to be part of.
Thank you for inviting me to speak with you today. It has been a privilege to be here.
Sunday, April 21, 2013
FORMER SIEMENS EXECUTIVE SETTLES BRIBERY CHARGES
FROM: U.S. SECURITIES EXCHANGE COMMISSION
Former Siemens Executive Uriel Sharef Settles Bribery Charges
The Securities and Exchange Commission announced today that on April 15, 2013, the U.S. District Court for the Southern District of New York entered a final judgment against Uriel Sharef, a former officer and board member of Siemens Aktiengesellschaft (Siemens). The settlement resolves the Commission's civil action against Sharef for his role in Siemens' decade-long bribery scheme to retain a $1 billion government contract to produce national identity cards for Argentine citizens. The final judgment, to which Sharef consented, enjoins him from violating the anti-bribery and related internal controls provisions of the FCPA and orders him to pay a $275,000 civil penalty, the second highest penalty assessed against an individual in an FCPA case.
On December 13, 2011, the Commission filed a civil action against Uriel Sharef and six other defendants, alleging that between 2001 and 2007, Sharef, along with other Siemens executives, paid bribes to senior government officials in Argentina in connection with a government contract to provide national identity cards to all Argentine citizens. The officials included two Argentine presidents and cabinet ministers in two presidential administrations. During this period, Sharef was a member of Siemens Managing Board, or "Vorstand," and was the most senior officer charged in connection with the scheme. Sharef met with payment intermediaries in the United States and agreed to pay $27 million in bribes to Argentine officials. Sharef also enlisted subordinates to conceal the payments by circumventing Siemens' internal accounting controls.
According to the SEC's complaint, approximately $31.3 million of the $100 million in bribes paid were made after March 12, 2001, when Siemens became a U.S. issuer subject to U.S. securities laws. As a result of the bribe payments it made, Siemens received an arbitration award in 2007 against the government of Argentina of more than $217 million plus interest for the contract. In August 2009, after settling bribery charges with the U.S. and Germany, Siemens waived the arbitration award.
The final judgment permanently enjoins Sharef from violating Sections 30A and 13(b)(5) of the Securities Exchange Act of 1934, and Rule 13b2-1 thereunder, and from aiding and abetting Siemens' violations of Exchange Act Sections 13(b)(2)(A) and13(b)(2)(B). The judgment also orders Sharef to pay a civil penalty of $275,000. Sharef settled the SEC charges without either admitting or denying the allegations in the SEC's complaint.
The SEC appreciates the assistance of the U.S. Department of Justice, Fraud Section, the Federal Bureau of Investigation, and the Office of the Prosecutor General in Munich, Germany in this matter.
Former Siemens Executive Uriel Sharef Settles Bribery Charges
The Securities and Exchange Commission announced today that on April 15, 2013, the U.S. District Court for the Southern District of New York entered a final judgment against Uriel Sharef, a former officer and board member of Siemens Aktiengesellschaft (Siemens). The settlement resolves the Commission's civil action against Sharef for his role in Siemens' decade-long bribery scheme to retain a $1 billion government contract to produce national identity cards for Argentine citizens. The final judgment, to which Sharef consented, enjoins him from violating the anti-bribery and related internal controls provisions of the FCPA and orders him to pay a $275,000 civil penalty, the second highest penalty assessed against an individual in an FCPA case.
On December 13, 2011, the Commission filed a civil action against Uriel Sharef and six other defendants, alleging that between 2001 and 2007, Sharef, along with other Siemens executives, paid bribes to senior government officials in Argentina in connection with a government contract to provide national identity cards to all Argentine citizens. The officials included two Argentine presidents and cabinet ministers in two presidential administrations. During this period, Sharef was a member of Siemens Managing Board, or "Vorstand," and was the most senior officer charged in connection with the scheme. Sharef met with payment intermediaries in the United States and agreed to pay $27 million in bribes to Argentine officials. Sharef also enlisted subordinates to conceal the payments by circumventing Siemens' internal accounting controls.
According to the SEC's complaint, approximately $31.3 million of the $100 million in bribes paid were made after March 12, 2001, when Siemens became a U.S. issuer subject to U.S. securities laws. As a result of the bribe payments it made, Siemens received an arbitration award in 2007 against the government of Argentina of more than $217 million plus interest for the contract. In August 2009, after settling bribery charges with the U.S. and Germany, Siemens waived the arbitration award.
The final judgment permanently enjoins Sharef from violating Sections 30A and 13(b)(5) of the Securities Exchange Act of 1934, and Rule 13b2-1 thereunder, and from aiding and abetting Siemens' violations of Exchange Act Sections 13(b)(2)(A) and13(b)(2)(B). The judgment also orders Sharef to pay a civil penalty of $275,000. Sharef settled the SEC charges without either admitting or denying the allegations in the SEC's complaint.
The SEC appreciates the assistance of the U.S. Department of Justice, Fraud Section, the Federal Bureau of Investigation, and the Office of the Prosecutor General in Munich, Germany in this matter.
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