This Week in Compliance

Serco Group Settles UK Fraud Probe for GBP 19.2 Million

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Serco Group Settles UK Fraud Probe for GBP 19.2 Million: 

Serco Group agreed this week to pay GBP 19.2 million to settle a six-year probe by the Serious Fraud Office (SFO) over allegations that the company overcharged for electronic tagging services of criminals, including for some who had passed away already. Serco lost contracts, it’s CEO and a fifth of its value after the scandal emerged. The company will enter into a deferred prosecution agreement (DPA), following the approval of a judge on Thursday. Serco already paid GBP 70 million to the UK’s Ministry of Justice and will also have to pay the SFO’s costs. The SFO said the fine was reduced by 50 percent to reflect the company’s cooperation with the probe. The DPA was approved in court on Thursday, as an attorney for the SFO said that the agency is looking to charge individuals in the case by December 18th. Deloitte was also fined GBP 4.2 million this week for failures in its audit of Serco’s books. READ MORE 

Business

New leak exposes millions of USD in questionable payments in Odebrecht scandal:

After having admitted to a massive corruption scheme in 2016, the Brazilian construction firm Odebrecht was recently subjected to a new investigation by the International Consortium of Investigative Journalists. The leaked findings from the investigation revealed that the corruption scheme involved many previously unknown public work projects and public figures including payments related to infrastructure projects in Peru, Ecuador, Panama and Venezuela. Odebrecht paid off public officials to the extent that the company created a special unit devised specifically to handle bribes; the Division of Structured Operations. The investigation looked into leaked files from this division which were obtained jointly by La Posta, local Ecuadorian newspaper, and ICIJ.

CFTC award two whistleblowers USD 2 million award:

The Commodity Futures Trading Commission (CFTC) announced on Monday that is has awarded two whistleblowers a combined USD 2 million award for providing “significant information” that led to an investigation. The CFTC referred to the whistleblowers as “model” whistleblowers because of the quality of the information provided and the “integrity and courage” it took the whistleblowers to “report specific, timely, and credible information about misconduct”. One of the whistleblowers explained “complex financial arrangements and identified key relationships” to the CFTC. Since the inception of the whistleblower award program in 2014, the commission has awarded in excess of USD 90 million to whistleblowers.

Senior Walmart compliance director nominated to U.S. federal bench:

President Trump nominated Lee Rudofsky, the Senior Director for Global Anti-Corruption Compliance at Walmart Inc, to serve as a judge on the U.S. District Court for the Eastern District of Arkansas. Rudofsky was previously the Solicitor General of Arkansas. He also worked on several political campaigns, including as Deputy General Counsel to Mitt Romeny’s 2012 Presidential campaign. The nomination will have now have to be confirmed by the United States Senate.

Government

Two plead guilty to FCPA offenses for bribing former Venezuelan electricity minister:

Two Venezuelan business owners were found guilty in a federal court in Miami under the FCPA for bribing two Venezuela public officials, including a former Venezuelan minister. The two businessmen reportedly bribed the previous minister of electrical energy and head of Venezuelan state-owned electricity company, Corpoelec, as well as the director of procurement of Corpoelec in exchange for USD 60 million in contracts for their Florida based business. Both  businessmen as well as the two public functionaries have been indicted. While the two business owners will each forfeit at least USD 5.5 million in profits they made from the corrupt contracts, the officials are being sanctioned by the OFAC and being charged with money laundering. OFAC sanctions prohibit any type of business involving blocked persons and freezes any assets under U.S. jurisdiction.

Uzbek Prosecutor-General gets 10 year sentence for corruption:

Rashid Qodirov, former Prosecutor-General of Uzbekistan was sentenced to 10 years in prison over money laundering, financial fraud, obstruction of justice, extortion and other charges. In 2015, Qodirov was deposed from his position and reassigned a month later as judge at the Constitutional Court. The dismissal was allegedly linked to his son’s mis-use of the Prosecutor’s influence to eliminate competition for his retail luxury stores and healthcare supply firm in the country. Qodirov was initially arrested for corruption in February 2018, but only faced trial in January 2019. During this time, human rights organizations raised concerns over potential torture and ill-treatment of the previous Prosecutor and the other defendants linked to his case. In the recent sentence, Qodirov was sentenced alongside his 12 co-defendants who were sentenced for various crime allegations facing jail time of up to 19 years.

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