Gunvor Group Former Employee Pleads Guilty to FCPA Scheme to Pay Bribes to Ecuadoran Government Officials
Raymond Kohut, a 68-year old Canadian citizen, a former employee of Swiss commodities trader, Gunvor Group, Ltd., pleaded guilty to paying $22 million in bribes to Ecuadoran government officials at state-owned oil company, PetroEcuador.
Kohut pleaded guilty to one count of money laundering conspiracy before a federal judge in Brooklyn, New York, the Eastern District of New York. Kohut agreed to forfeit $2.2 million.
Gunvor Group is a multinational commodity trading company with its main trading office in Geneva, Switzerland. Gunvor Group has trading offices in Singapore, the Bahamas and Dubai. Gunvor Group is cooperating and is likely to reach a corporate settlement with the Justice Department.
Gunvor Group acknowledged that the bribery scheme was orchestrated by an “intermediary agent.” Gunvor Group terminated its relationship with the intermediary agent, and no longer uses intermediaries for business development purposes.
Over an eight-year period, from 2012 to 2020, Kohut participated in a bribery scheme with consultants and two supervisors to pay bribes to PetroEcuador officials to secure contracts with PetroEcuador. Kohut admitted that he hired consultants to disguise bribery payments using agreements that contained a false work purpose. The consultants facilitated millions of dollars in payments knowing that the consultants would funnel payments to officials at PetroEcuador. Kohut acknowledged that he knew that his conduct was “wrong and illegal.”
The consultants used domestic and offshore bank accounts registered to shell companies to make payments to corrupt Ecuadoran officials. Some of the payments traveled through New York and involved New York correspondent bank accounts.
PetroEcuador and two state-owned oil and gas entities based in Asia entered into a series of contracts under which the Asia entities provided oil-secured loan to PetroEcuador. Gunvor Group entered into deals with the two Asia entities to market and sell oil products under those deals. Starting in 2012, Kohut and others sought to bribe PetroEcuadoran officials for favorable terms on oil and gas trading contracts with the Asian companies which then facilitated Kohut and Gunvor to make bribery payments and earn illegal proceeds.
Kohut acknowledged that some of the transactions traveled through U.S. banks, Singapore banks and the consultants’ accounts in foreign jurisdictions. Kohut met with co-conspirators in the U.S. on several occasions to coordinate the bribery scheme.
The Justice Department has brought a number of enforcement actions for bribery and money laundering against PetroEcuador officials.
In December 2020, Vitol, Inc., another energy trading company, agreed to pay $163 million to resolve bribery violations of PetroEcuador and other state-owned enterprises in Brazil and Mexico. A Texas oil trader has also been charged for paying $870,000 in bribes from Vitol to former PetroEcuadoran officials. Finally, an Ecuadoran businessman in Miami was recently sentenced to three years in prison for his role in a $4.4 million bribery scheme to pay bribes to PetroEcuador officials.