DOJ Charges Two Additional Individuals in FCPA Rolls Royce Case
The Justice Department added to its roster of criminal FCPA defendants. Going back to 2017, it is clear that the Yates Memorandum requirements have resulted in an increase in criminal FCPA prosecutions.
Last week, the Justice Department unsealed a superseding indictment adding two individuals to the Rolls Royce criminal FCPA case in Ohio. The criminal investigation centers on bribes to a Kazakh official to win a $145 million contract to supply equipment and services for the construction of a gas pipeline from Kazakhstan to China.
The two individuals added to the criminal indictment were employees of an international engineering consulting firm: Azat Martirossian, an Armenian citizen, and Vitaly Leshkov, a Russian citizen, were charged with one count of FCPA conspiracy to launder money and 10 counts of money laundering. They were joined with a pending criminal case against Peter Contoguris, a Greek citizen, who was charged in an earlier version of the indictment with one count of FCPA conspiracy, seven counts of violating the FCPA, and three counts of money laundering. All three defendants have not been apprehended and reside outside the United States.
In January 2017, Rolls Royce settled an FCPA enforcement action by paying $170 million out of a global settlement of $800 million, which included the United Kingdom and Brazil. Rolls Royce entered into a deferred prosecution agreement.
In October 2017, the Justice Department returned a criminal indictment charging five individuals with criminal FCPA violations and money laundering charges. Four of those defendants plead guilty. Contoguris was one of the five defendants originally charged in the indictment. The four defendants who plead guilty are: James Finley, a UK citizen, and former Rolls Royce senior executive; Keith Barnett, a US citizen and former Rolls Royce manager; Aloysius Johanne Jozef Zuurhout, a Netherlands citizen and former Rolls Royce sales employee; and Andreas Kohler, an Austrian citizen, former managing director at Technical Advisor, an international engineering and consulting firm.
According to the indictment, Contoguris was the founder and CEO of Gravitas & CIE International Ltd. with the co-defendants conspired to bribe foreign officials to direct business to Rolls-Royce Energy Systems, Inc, a US subsidiary.
Azat Martirossian and Vitaly Leshkov were employees of Technical Advisor, an international consulting firm, where Rolls-Royce paid kickbacks to Technical Advisor employees and bribes to at least one foreign official in Kazakhstan. The illegal payments were disguised as commissions to Contoguris’ company, Gravitas, in exchange for helping Rollys Royce win contracts with Asia Gas Pipeline LLP (AGP).
AGP was created to build a gas pipeline between Central Asia and China. Technical Advisor was retained by AGP to provide independent engineering and consulting services. AGP awarded the $145 million contract to Rolls Royce in November 2009. Rolls Royce, in turn, made commission payments to Contoguris’ company, Gravitas, and Contoguris then passed a portion of the payments to Technical Advisor employees, including Leshkov and Martirossian, knowing that a portion of the money would be given to a Kazakh government official from KazMunayGas Natiuonal Company.