In a surprising (but fully warranted) twist, the Justice Department returned an indictment against a former employee of Telefonaktiebolaget LM Ericsson (“Ericsson”), a global telecommunications company, for his role in paying approximately $2.1 million in bribes to high-level government officials in the Republic of Djibouti.

Afework “Affe” Bereket, 53, a dual citizen of Ethiopia and Sweden, was charged in a two-count indictment – Count 1 for FCPA Conspiracy; and Count 2 for Conspiracy to Commit Money Laundering Violations. Bereket has not been apprehended.

In December 2019, Ericsson entered into a deferred prosecution agreement (“DPA”) with the Justice Department and settled with the SEC for a total between the two agencies of over $1 billion for FCPA violations.  Ericsson acknowledged pervasive bribery schemes over a 17-year period occurring in at least five countries, Djibouti, China, Vietnam, Indonesia and Kuwait.

The Justice Department usually has several individuals identified in a corporate settlement but has not, as a regular practice, indicted these individuals who appear to be criminally culpable. The Ericsson settlement outlined pervasive criminal conduct and it appears that DOJ has indicted under seal some of the individuals responsible for carrying out the bribery schemes. Given the fact that much of the conduct occurred between 2010 and 2014, DOJ faced statute of limitations issues unless the targets are fugitives or DOJ had difficulty obtaining documents and records from foreign authorities.

Bereket’s indictment focuses on his conduct in Djibouti. Between the period of 2010 and January 2014, Bereket was an account manager for the Horn of Africa, which included Djibouti.  Bereket participated in a bribery scheme to pay two high-ranking officials in Djibouti’s executive branch and a high-level official at Djibouti’s state-owned telecommunications company to obtain a contract valuable contract with the SOE valued at approximately $20.3 million.

To carry out the bribery scheme, Bereket and others arranged for an Ericsson subsidiary to enter into a “sham” consulting contract and approve fake invoices to conceal the bribe payments. Berekt and others drafted a due diligence report that omitted any reference to the spousal relationship between the owner of the consulting company and one of the high-ranking officials to be bribed.  In transferring the funds used for the bribes, Ericsson transferred some of the funds through bank accounts in the United States.

Bereket arranged for payments totaling $2.1 million with the three key foreign officials to bribe them for Ericsson to win the $20.3 million contract.

The Indictment describes a number of specific overt acts outlining Bereket’s conduct and the bribery scheme.  For example, Bereket sent emails in July and August 2011 to co-conspirators proposing to pay $1 million in bribes to two foreign officials, and the need to pay the consulting company quickly because the many in the telecom ministry were “waiting for their cake.” In additional emails, Bereket directed that Ericsson wire $1.441 million, $171k, and $545k respectively, from an Ericsson bank account in Dubai to a New York bank account from which the money can be wired to the consulting company’s bank account in Djibouti