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Catching Up with FCPA News

DOJ closed out its FCPA enforcement year in 2022 with two significant settlements, the ABB and Honeywell cases.  Aside from these two big settlements, there was a flurry of other actions in the last quarter of 2022. 

Ericsson Monitorship Extension

Ericsson Telecomm agreed to a one-year extension of its corporate monitorship that was imposed as part of its $1 billion FCPA settlement with the Justice Department.  The new monitorship will end in June 2024.

In March 2022, Ericsson disclosed that DOJ had notified it that Ericsson breached the deferred prosecution agreement by failing to disclose potential violations that were uncovered during the DPA period.  It is alleged that Ericsson may have paid bribes to terrorist organizations in Iraq amd Syria in order to facilitate construction and repair services needed to maintain its cellular network in these countries. 

The extension of the monitorship does not resolve the alleged breach of its DPA.  Ericsson stated that it is continuing to cooperate with DOJ’s ongoing investigation of the alleged breach.

Safran Declination

On December 21, 2022, the Justice Department issued its second FCPA declination and disgorgement for 2022 under the Corporate Enforcement Policy.  DOJ declined to prosecute Safran SA for bribery committed by Safran’s U.S. subsidiary, Monogram Systems (“Monogram”), and its German subsidiary, EVAC, during the period of 1999 to 2015.  The bribery conduct occurred prior to Safran’s acquisition of Monogram.

In exchange for the declination, Safran agreed to pay $17 million in disgorgement.

During the sixteen year period ending in 2015, Monogram and EVAC paid millions of dollars in bribes to a Chinese business consultant who was a close relative to a Chinese government official.  Monogram and EVAC paid the consultant knowing that a portion of the payments would be used to pay bribes in exchange for lucrative train lavatory contracts with the Chinese government.

Safran earned the declination under DOJ’s Corporate Enforcement Policy because of its: (1) timely voluntary disclosure of the conduct; (2) full cooperation with the investigation; (3) timely and enhanced remediation, including termination of a remaining employee involved in the misconduct, withholding of deferred compensation of another employee involved in the misconduct who had since left the company, and enhancements to its anti-corruption compliance program; (4) status as an acquiring company where the misconduct occurred prior to the acquisition; (5) identification of the misconduct through its pre-acquisition due diligence; and (6) Safran’s commitment to resolve foreign bribery charges with German authorities.

Yan and Zhou Guilty Pleas

Cary Yan and Gina Zhou, the heads of a New York-based non-governmental organization, plead guilty to one count of FCPA conspiracy for bribing elected officials of the Republic of the Marshall Islands (RMI) in exchange for passing legislation to support the creation of a semi-autonomous region called the Rongelap Atoll Special Administrative Region (RASAR) that would have benefited the business interests of Yan and Zhou and the NGO.  Yan and Zhou were arrested in Thailand in November 2020, and were extradited to the United States in September 2022.

Former Venezuelan Treasurer and Husband Convicted of International Bribery

A federal jury in Miami convicted Claudia Patricia Diaz Guillen, the former national treasurer of Venezuela, and her spouse, Adrian Jose Velasquez Figueroa, for their roles in a billion-dollar currency exchange, bribery and money laundering operation.

Diaz and Velasquez accepted over $100 million in bribes from a co-conspirator, Raul Gorrin Belisario, the owner of Globovision news network, to purchase bonds from the Venezuela National Treasury at a favorable exchange rate, resulting in Gorrin earning large profits through currency conversion transactions.  The conspiracy scheme was carried out through bulk cash, offshore shell companies, Swiss bank accounts, international wire transfers and other mechanisms designed to evade Venezuelan currency restrictions.

Gorrin is currently a fugitive in Venezuela.  Diaz and Velasquez were arrested in Spain and extradited to the United States.

Diaz and Velasquez were each convicted of one count of conspiracy to commit money laundering and one count of money laundering.  Velasquez was convicted of a second count of money laundering.

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