Enforcement Report For Q3 ’10

After the busiest first quarter on record for FCPA enforcement, things were quiet from April to June. But during the quarter just ended, there was plenty of action. It included the sputtering end to James Giffen’s high-profile prosecution, the Greens’ ultra-light jail term, a settlement by Snamprogetti that ranked fourth on our all-time top ten list, and ABB’s deal this week that will land seventh.

Here’s what happened:

Indicted

Enrique Faustino Aguilar Noriega and Angela Maria Gomez Aguilar (September 15), of Cuernavaca, Mexico, were charged in a seven-count indictment with conspiracy to violate the Foreign Corrupt Practices Act, four substantive FCPA violations, money laundering conspiracy, and money laundering for their alleged roles in bribery and money laundering involving Mexican government officials at the state-owned electric utility, Comisión Federal de Electridad, or CFE. (See ABB below.)

DOJ / SEC Enforcement Action Resolutions

Snamprogetti Netherlands B.V. and its parent company ENI S.p.A of Italy (July 7) paid $365 million to resolve FCPA-related charges for Snamprogetti’s role in the TSKJ-Nigeria joint venture, including a $240 million criminal penalty to the DOJ and disgorgement of $125 million to the SEC.

General Electric Company (July 27) paid $23.4 million to the SEC to resolve oil-for-food related civil violations of the books and records and internal controls provisions of the FCPA. The SEC charged GE and two subsidiaries — Ionics Inc. and Amersham plc — with civil violations

Oussama Naaman and David Turner (August 5) settled civil FCPA charges with the SEC. Turner agreed to disgorge $40,000 to the SEC. Naaman agreed to disgorge $810,076 plus prejudgment interest of $67,030, and pay a civil penalty of $438,038. Turner was an executive of Innospec Inc. and Naaman was its sales agent for Iraq. 

Joe Summers (August 5) agreed to pay a civil penalty of $25,000 to the SEC. The former country manager in Venezuela for Pride International, Inc. last week settled civil FCPA charges with the SEC. August 5

Alliance One International Inc. (August 6) Two foreign subsidiaries of Alliance One paid a total of $9.45 million in fines to the DOJ. Alliance One entered into a three-year non-prosecution agreement. In the SEC civil case, Alliance One disgorged $10 million.

Universal Corporation (August 6) A Brazilian subsidiary of Virginia-based Universal paid a $4.4 million criminal fine to the DOJ. Universal entered into a three-year non-prosecution agreement. In the SEC civil case, Universal disgorged $4.58.

ABB Ltd (September 29) of Switzerland paid $58.3 million, including a fine of $19 million to resolve the DOJ’s criminal charges, and disgorgement of $22.8 million and a $16.5 million civil penalty to the SEC. ABB and two subsidiaries admitted bribing officials at Mexico’s CFE (see the Aguilar indictments above) and paying kickbacks to the Iraqi government under the U.N. oil-for-food program.

Guilty Pleas

Bobby Jay Elkin Jr. (August 3) former executive from tobacco company Dimon Inc, now called Alliance One International, pleaded guilty to a one-count criminal information charging him with conspiracy to violate the FCPA. No sentencing date has been set.

James Giffen (August 6) pleaded guilty to a tax-related misdemeanor — failing to report a foreign bank account in a 1996 tax return. His now-dormant firm, Mercator Corporation, pleaded guilty to one count of violating the FCPA by giving two snowmobiles to officials in Kazakhstan in 1999. Giffen faces not more than a year in prison. Sentencing is scheduled for November 19.

Richard Bistrong (September 16) a former vice president of Armor Holdings Inc and a key witness in the historic bribery indictment of 22 people from the military and police-equipment industry, pleaded guilty to one count of conspiracy to violate the FCPA and other statutes. He faces up to five years in prison and a $250,000 fine. His sentencing date hasn’t been set.

Sentenced

Juan Diaz (July 30), a Miami businessman at the center of the Haiti telco bribery case, was sentenced to 57 months in prison. He pleaded guilty in May 2009 to a one-count criminal information charging him with conspiracy to violate the FCPA and money laundering. He was also ordered to serve three years of supervised release following his prison term and to forfeit $1,028,851 and pay $73,824 in restitution.

Gerald Green and Patricia Green (August 12), the husband-and-wife Hollywood movie producers convicted of bribing a Thai government official, were each sentenced to six months in jail and six months home confinement. They were also ordered to jointly pay $250,000 in restitution.

Nam Nguyen (September 15), the owner of Nexus Technologies Inc., was sentenced to 16 months in prison and ordered to serve two years of supervised release following the prison term. He and his brother, An, and sister Kim, below, were charged with conspiracy, violations of the FCPA, violations of the Travel Act in connection with commercial bribes, and money laundering.

An Nguyen (September 15) was sentenced to nine months in prison, followed by three years of supervised release.

Kim Nguyen (September 15) was sentenced to two years probation and ordered to pay a $20,000 fine.

Joseph Lukas (September 15) a former partner with Nexus, was sentenced to two years probation and ordered to pay a $1,000 fine. He pleaded guilty to conspiracy and to violating the FCPA.

Extradited

Flavio Ricotti (July 1) an Italian citizen indicted in April 2009 with five other former executives of California-based valve-maker Control Components Inc. was extradited from Germany to the United States. He’s facing trial for his alleged role in a conspiracy to bribe officials of foreign state-owned companies and private parties.

James “Ken” Tillery (August 19) was seized by the FBI in Lagos. A report in the press there said the Nigerian high court halted the extradition for further hearings because due process wasn’t followed. There’s been no further news since August about Tillery, who ran Willbros in Nigeria. He was indicted in 2008 for conspiracy to violate the FCPA, two counts of violating the FCPA in connection with the authorization of specific corrupt payments to officials in Nigeria and Ecuador, and one count of conspiring to launder the bribe payments. He faces up to 35 years in prison.