Enforcement Report For Q2 ’12

There was just one corporate enforcement action during the second quarter of the year. During the same period last year, there were five, and two in 2010.

But the Morgan Stanley declination made big news during the second quarter. As did the four guilty pleas in the CCI case, and the three LatiNode and two Haiti telco sentencings.

*     *     *

Here’s what happened:

DOJ / SEC Enforcement Resolutions

Garth R. Peterson (April 25), 42, a managing director in Morgan Stanley’s real estate investment and fund advisory business in China, pleaded guilty to a one-count criminal information charging him with conspiring to evade Morgan Stanley’s internal accounting controls. He faces up to five years in prison when sentenced on July 17. Peterson also settled an SEC civil complaint filed by paying about $250,000 in disgorgement and forfeiting Shanghai real estate worth $3.4 million. The DOJ and SEC didn’t charge Morgan Stanley, citing its robust compliance program.

Data Systems & Solutions LLC (June 18) paid a criminal penalty of $8.82 million and entered into a two-year deferred prosecution agreement to resolve FCPA offenses. The DOJ’s two-count criminal information charged DS&S with conspiring to violate the FCPA’s anti-bribery provisions and a substantive FCPA count. DS&S bribed officials employed by the Ignalina Nuclear Power Plant, a state-owned nuclear power plant in Lithuania.

Sentenced

Fernando Basurto Jr. (April 6), 50, the government’s chief witness against former ABB manager John O’Shea, was sentenced to ‘time served’ for conspiracy to violate the FCPA. The Mexican citizen spent twenty-two months in jail after his arrest in Dallas in 2009.

Manuel Caceres (April 19), 66, LatiNode’s former vice president for business development, was sentenced to twenty-three months in prison. He pleaded guitly last year to one count of conspiracy to violate the FCPA and could have been jailed for up to five years.

Juan Pablo Vasquez (April 25), a former executive at LatiNode, received three years probation and a $7,500 fine after pleading guilty in January last year to conspiring to violate the FCPA.

Robert Antoine (May 30) – the former international affairs director of Haiti’s state-owned telecommunications company who pleaded guilty to money laundering — had his four-year prison sentence reduced to 18 months. After his plea, he testified against other defendants in the sprawling Haiti telco case.

Jean Rene Duperval (May 21), 45, a director of international relations for state-owned Haiti telco, was sentenced to nine years in prison for money laundering. He was convicted in March this year by a federal jury in Miami of two counts of conspiracy to commit money laundering and nineteen counts of money laundering. He was also ordered to forfeit $497,331.

Manual Salvoch (June 5), the former CFO of LatiNode, was sentenced to 10 months in prison and 3 years of supervised release. He was arrested on January 11 last year and pleaded guilty the next day in connection with payments to Hondutel.

Guilty Pleas

Stuart Carson (April 16) 73, the former president of Control Components Inc., pleaded guilty to a one-count criminal information charging him with making a corrupt payment to a foreign official. Sentencing is scheduled for October 15. Under the plea deal, he faces up to ten months in prison.

Hong “Rose” Carson (April 16) 48, wife of Stuart Carson and CCI’s former director of sales for China and Taiwan, pleaded guilty to one count of violating the FCPA. She faces up to three years probation with six months of home confinement.

Paul Cosgrove (May 29), 65, the former director of worldwide sales for CCI, pleaded guilty to one count of violating the FCPA. Sentencing for August 27. Under his plea deal, Cosgrove faces up to 15 months in federal prison.

David Edmonds (June 15), 59, the former vice president of worldwide customer service at CCI, pleaded guilty one count of violating the FCPA. His sentencing is set for November 12. He faces up to 15 months in prison.

__________________

Our Enforcement Report for Q1 ’12 is here.

Our 2011 Enforcement Index is here, the 2010 Index is here, the 2009 Index can be found here, and our 2008 Index is here.