Here’s what’s been going on in the compliance world this week:
- Expansion of self-disclosure based leniency principles to all corporate cases: The acting head of the DOJ Criminal Division and Chief of the Criminal Fraud Section’s Securities and Financial Fraud Unit announced that guidance set forth by the FCPA Enforcement Policy will be used in all corporate criminal cases handled by the Criminal Division. The policy sets forth a comprehensive path towards a possible declination if companies voluntarily self-disclose misconduct, fully cooperate, and engage in timely and appropriate remediation. While companies that comply with the self-disclosure, cooperation, and remediation requirements, yet are still subject to a DOJ prosecution, will be eligible for a 50% reduction off the low end of applicable fines. Companies that do not self-disclose are eligible, at most, for only a 25 percent fine reduction. The Criminal Division’s new self-disclosure policies are not binding on any U.S. Attorney’s Office, yet the FCPA Policy’s clarifications pertaining to declinations and the application of cooperation credit could, in effect, help companies navigate potential negotiations with the DOJ.
- Former Petrobras CEO sentenced to prison for corruption: The former chief executive of Petrobras, the state-controlled oil company, was found guilty of corruption and abusing his position to take BRL 3 million (USD 924,527) in bribes from the construction company Odebrecht in return for unspecified favorable treatment from Petrobras. The ex-CEO, Aldemir Bendine, was sentenced to 11 years’ imprisonment by a federal judge Sergio Moro. Reportedly, Bendine had demanded BRL 17 million in bribes from Odebrecht while he was managing Banco do Brasil in return for authorizing the rollover of a loan to Odebrecht. Bendine served as CEO of Petrobras from 2015 to 2016 and denied benefiting any company in return for bribes.
- Two new guilty pleas in the ‘Fat Leonard’ case: Two US Navy officers, Commander Jason Starmer and Captain John Steinberger, admitted to accepting gifts and other services from Leonard Glenn Francis in the ‘Fat Leonard’ case which has so far involved several Navy officials and has lasted for a decade. Francis, a Malaysian businessman nicknamed ‘Fat Leonard’ has reportedly bribed officials to cover up overbilling of the Navy for services his company provided to ships docked in Asian ports. Both will be administratively separated from the service as part of pre-trial agreements.
- GRECO criticizes Portugal for lagging behind in corruption prevention: The Council of Europe’s Group of States against Corruption (GRECO) recently published its latest Portugal evaluation report, in which it criticized the country for not doing enough when it comes to curbing corruption among MPs, judges, and prosecutors. GRECO concluded in its report that Portugal failed in implementing a majority of the fifteen recommendations outlined in GRECO’s 2015 evaluation report. Reportedly, the Portuguese government has only satisfactorily implemented one recommendation, partly implemented three other, while eleven have not been implemented at all. GRECO described the progress as ‘globally unsatisfactory’.
- Argentina’s intelligence chief accused of involvement in the Car Wash corruption case: Brazilian law enforcement authorities accused Gustavo Arribas, Argentina’s intelligence chief, of receiving USD 850,000 as part of a money-laundering scheme that involved front companies in several Brazilian cities. Reportedly, Arribas had received the payments through a wire transfer routed through Hong Kong. Arribas is the first senior Argentinian official in President Mauricio Macri’s administration to be accused of involvement in the Car Wash investigations. Arribas has not been criminally charged and has denied the allegations. Several presidents, politicians, and businessmen have been implicated in the Car Wash case which has shaken several governments across South America.
- Red Granite Pictures settles corruption allegation: As part of an effort to regain more than USD one billion embezzled from the Malaysian state-run development fund 1MDB, prosecutors filed a civil asset forfeiture action in mid-2016 against Red Granite for allegedly using more than USD 100 million from the fund to finance several movies the company had produced including ‘The Wolf of Wall Street’. Red Granite has recently agreed to pay USD 60 million to US authorities to resolve the allegations. The Red Granite CEO, Riza Aziz, is the stepson of Malaysia’s prime minister and a close friend of Jho Low, the latter whom the DOJ has accused of masterminding a scheme to embezzle USD 4.5 billion from the 1MDB.