A federal grand jury in Philadelphia indicted the former owner and president of the Chestnut Consulting Group Inc. Tuesday for bribing an official of an international development bank.
Dmitrij Harder, 42, a Russian national living in Huntingdon Valley, Pennsylvania, was charged with one count of conspiracy to violate the FCPA and Travel Act, five counts of violating the FCPA, five counts of violating the Travel Act, one count of conspiracy to commit international money laundering, and two counts of money laundering.
According to the indictment, Harder bribed a senior official at the London-based European Bank for Reconstruction and Development.
The indictment charged Harder with paying more than $3.5 million to the EBRD official. The payments allegedly went via the official’s sister under a phony contract she had with the Chestnut Group.
The EBRD is owned by 64 shareholder countries and organizations. They contribute to its capital and provide credit guarantees. The bank finances development projects in emerging economies, primarily in Eastern Europe.
In exchange for the bribes, Tuesday’s indictment alleged, the EBRD official influenced the approval of financing for two of the Chestnut Group’s corporate clients. One project involved an investment by the EBRD of $85 million and a €90 million ($107 million) loan. The second project resulted in a $40 million investment and a $60 million convertible loan, the DOJ said.
The Chestnut Group allegedly earned about $8 million in “success fees” as a result of the EBRD’s approval of the two applications, the DOJ said.
FCPA and Travel Act violations are punishable by up to five years in prison. Money-laundering counts are punishable by up to 20 years in prison.
As the DOJ says, charges contained in an indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.
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