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Colombian conglomerate and subsidiary pay $80.8 million to settle FCPA offenses

Grupo Aval Acciones y Valores S.A. and its banking subsidiary agreed Thursday to pay the DOJ and SEC $80.8 million in penalties and disgorgement to resolve FCPA offenses related to a toll road project in Colombia.

The Bogotá-headquartered conglomerate’s subsidiary Corporación Financiera Colombiana S.A. (Corficolombiana) entered into a three-year deferred prosecution agreement with the Department of Justice, paying a $40.6 million criminal penalty.

The DOJ said it agreed to credit up to half of that criminal penalty against money that Corficolombiana and its subsidiary, Estudios y Proyectos del Sol S.A.S. (Episol), paid to Colombia’s Superintendencia de Industria y Comercio (SIC), for violations of Colombian laws related to the conduct, as long as Corficolombiana and Episol drop their appeals of the SIC resolution.

In an internal administrative order, the SEC charged Grupo Aval and Corficolombiana with violating the FCPA’s accounting provisions, and Corficolombiana with violating the FCPA’s anti-bribery provisions.

As part of the SEC settlement, Grupo Aval and Corficolombiana agreed to pay around $40.3 million in disgorgement and prejudgment interest. The SEC didn’t impose a separate penalty.

According to the DOJ, Corficolombiana, between 2012 and 2015, conspired with an executive of Brazil-based construction conglomerate Odebrecht to offer and pay more than $23 million in bribes to high-ranking Colombian government officials in order to win a contract to construct and operate a highway toll road project.

In May 2014, before the Colombian government officials approved the new financing obligations for the toll road project, an Odebrecht executive agreed to pay additional bribes to Colombian government officials “in the form of illicit campaign contributions,” the SEC said.

The DOJ said Corficolombiana earned $28.6 million in profits from the bribes.

As part of the settlement, Corficolombiana agreed to continue cooperating with the DOJ, enhancing its compliance program, and providing reports to the DOJ regarding remediation and the implementation of compliance measures for the term of the DPA.

“Corficolombiana has acknowledged its role in a significant foreign bribery scheme, and for that it is being held accountable,” a DOJ official said Thursday.

The DOJ said Thursday’s settlement reflects a 30 percent reduction off the U.S. Sentencing Guidelines because the company promptly engaged in extensive remedial measures including conducting a root cause analysis of the conduct identified during internal investigations and promptly taking actions to enhance its corporate governance and controls,  overhauling its compliance program, and enhancing its third-party intermediary risk management process, among other things.

In 2016, Brazil’s Odebrecht, now called Novonor, entered into a $3.5 billion global bribery resolution with authorities in the United States, Brazil, and Switzerland. The company paid about $788 million in bribes to government officials and political parties in at least a dozen countries to win business.

Colombian billionaire Luis Carlos Sarmiento is the majority shareholder and chairman of Grupo Aval, which is traded on the New York Stock Exchange.

According to FCPA Tracker, Grupo Aval first disclosed the investigation in an SEC filing in April 2017.

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