Source: https://www.fcpablog.com/blog/tag/agents?currentPage=4
Timestamp: 2019-10-14 03:10:20
Document Index: 221093704

Matched Legal Cases: ['§2', '§2', '§ 78', '§ 371', '§ 78', '§ 1956', '§ 1519']

Entries in Agents (71)
Will Tesler Make A Deal?
By Richard L. Cassin | Friday, February 25, 2011 at 5:08AM
Will Jeffrey Tesler follow Jack Stanley and Wojciech Chodan in a plea deal? Here are some reasons why he might . . . .
tagged Agents, Albert Jack Stanley, Jeffrey Tesler, Jurisdiction, Wojciech Chodan
By Richard L. Cassin | Thursday, November 11, 2010 at 2:42AM
We check in with the D&O Diary, the FCPA Prof, lawgents.com, and the WSJ online.
tagged Agents, Jurisdiction, Legislative History, Panalpina, Private Right of Action, Top Ten
Schlumberger, the Wall Street Journal reported, paid a $500,000 signing bonus to an intermediary in Yemen. Are signing bonuses for agents illegal under the FCPA? We take a look.
tagged Agents, Defenses, Due Diligence, Knowledge, Red Flags, Schlumberger, Signing Bonus, Yemen
tagged Agents, Lobbyist, Opinion Procedure Release
By Richard L. Cassin | Thursday, April 8, 2010 at 8:22AM
The criminal informations against Innospec and Daimler AG contained counts based on 18 U.S.C. §2. That's not the FCPA, the Travel Act, money laundering, or the conspiracy statute. What is it?
It's the aider and abettor law. Whoever causes someone else to commit a federal crime -- counsels, commands, induces, or procures its commission -- is punishable as a principal.
As a principal means the aider and abettor is subject to the same penalties for the crime committed by its agent, as though the principal -- the puppet-master -- had committed the crime itself. Innospec and Daimler each caused a subsidiary to violate the FCPA; therefore they were charged as an aider an abettor of those FCPA violations.
Aiding and abetting isn't an independent crime. The statute provides no penalty; it only abolishes the distinction between common law notions of "principal" and "accessory." United States v. Kegler, 724 F.2d 190, 200 (D.C. Cir. 1983).
Because 18 U.S.C. §2 applies to all crimes under U.S. law, the FCPA doesn't contain an explicit aiding and abetting provision. As mentioned, a person convicted of aiding and abetting is punishable to the same extent as if he had committed the crime himself. So aiding and abetting an FCPA antibribery offense, for example, is punishable by up to five years in prison.
It's not necessary in an aiding and abetting offense that the bribe be actually paid or that it be successful, only that the third party (the puppet) violated the FCPA by offering, promising, or authorizing the unlawful payment or gift. See 18 U.S.C. §§ 78dd-1(a), 78dd-2(a), 78dd-3(a).
tagged Agents, Travel Act, aider and abettor, money laundering
Executive Action At Innospec
By Richard L. Cassin | Friday, March 19, 2010 at 9:27AM
Photo by MJCdetroitWhat stands out about Innospec's FCPA guilty plea yesterday is the hands-on role former top managers had in the criminal activity. For nearly a decade they used bribery as just another sales tool, a manipulative and cynical revenue spinner, and did what they could to cover it up.
By 2000, the company's flagship product, TEL, an additive used only in leaded gasoline, was in trouble. The market was drying up after the U.S. and other countries ordered the switch to cleaner, healthier unleaded fuels. But under their go-team bosses, Innospec's salesmen and agents began paying bribes to move TEL into mainly third-world markets.
The SEC's complaint said "Innospec’s former management did nothing to stop the bribery, and in fact authorized and encouraged it."
An email from a former agent in October 2005 to Innospec’s then business director and another executive said Iraqi officials were demanding a 2% kickback on sales. The e-mail said: “We are sharing most of our profits with Iraqi officials. Otherwise, our business will stop and we will lose the market. We have to change our strategy and do more compensation to get the rewards.”
The Business Director authorized over $195,000 in bribes, and in an e-mail discussing the wording of the invoice, said: "The fewer words the better!”
Innospec acted like a classic corrupter. According to the SEC complaint, it paid lavish travel and entertainment expenses for Iraqi officials, including a seven day honeymoon. It handed out mobile phone cards and cameras and paid thousands in cash for “pocket money.” It even paid bribes to ensure the failure of a 2006 field test of MMT, a fuel product manufactured by a competitor.
In Indonesia, the bribes to push TEL sales came when the country was planning to go unleaded. At government-linked BP Migas, Innospec paid “special commissions” to a Swiss account and a “one off payment” of $300,000. The greed was mutual. The SEC said one Indonesian official indicated he would assist Innospec in landing TEL sales but he wanted more than just “cents” in return.
The case is far from over. The DOJ said as part of its guilty plea, the company "agreed to fully cooperate with the Department of Justice and other U.S. and foreign authorities in ongoing investigations of corrupt payments by Innospec employees and agents."
View the DOJ's March 18, 2010 release here.
Copies of the criminal information, sentencing memorandum, and plea agreement can be download from our post here.
tagged Agents, Indonesia, Innospec, Iraq
By Richard L. Cassin | Monday, March 1, 2010 at 5:43PM
BAE had announced the settlement with the DOJ and the U.K.'s Serious Fraud Office on February 5. The U.S. settlement was subject to today's court approval. See our post here.
In its release, the Justice Department said from 2000 to 2002, BAE "represented to various U.S. government agencies, including the Departments of Defense and Justice, that it would create and implement policies and procedures to ensure its compliance with the anti-bribery provisions of the FCPA, as well as similar, foreign laws implementing the Organization for Economic Cooperation and Development (OECD) Anti-bribery Convention. According to court documents, BAES knowingly and willfully failed to create mechanisms to ensure compliance with these legal prohibitions on foreign bribery. According to court documents, the gain to BAE from the various false statements and failures to make required disclosures to the U.S. government was more than $200 million."
See our post here for a copy of the criminal information against BAE. Exhibit A is a letter John Weston, BAE's chief executive, wrote on November 16, 2000 to U.S. Secretary of Defense William Cohen promising that BAE was not knowingly violating the Foreign Corrupt Practices Act and other antibribery laws.
Despite its assurances, BAE "made a series of substantial payments to shell companies and third party intermediaries" without due diligence or proper corporate controls. Some of the payments were to "marketing advisors" whose identity BAE actively concealed from the U.S. government. It also did not disclose some of the payments.
Unlike the SFO's early February release and charging documents, the DOJ referred to BAE's bribery of Saudi Arabian officials for the al-Yamamah contract -- an $80 billion deal signed in the mid-1980s for the sale of jet fighters.
In today's release, the DOJ thanked the SFO for "the significant assistance provided by the U.K.’s Serious Fraud Office, and further expresses its gratitude to that office for its ongoing partnership in the fight against overseas corruption.﻿"
A copy of the U.S. criminal information and the government's sentencing memorandum in U.S. v. BAE Systems plc can be downloaded here and here.
tagged Agents, BAE Systems, Saudi Arabia, Serious Fraud Office
tagged Agents, Due Diligence, Germany, MAN AG
Tesler Fights Extradition; Jefferson Appeals
By Richard L. Cassin | Wednesday, December 2, 2009 at 6:43PM
The London lawyer accused by the U.S. of being a middleman in KBR's bribery of Nigerian officials appeared in court last week to fight extradition. Jeffrey Tesler, 61, a U.K. citizen, was indicted in February by a federal grand jury in Houston. He was charged with one count of conspiring to violate the Foreign Corrupt Practices Act and ten substantive FCPA offenses. If convicted on all counts, he faces up to 55 years in prison. U.K. police, acting at the request of U.S. authorities, arrested Tesler in March.
According to a Press Association report, Tesler argued in the City of Westminster Magistrates' Court that his case is already under investigation by the U.K.'s Serious Fraud Office and shouldn't be duplicated by American prosecutors.
Tesler's lawyer, Bill Clegg QC, also said Tesler's case isn't linked to the U.S. "No person who was alleged to have received a bribe was promised a bribe in the U.S.A. No money to pay any bribes originated from any U.S. bank account. Mr Tesler, who it is alleged arranged the bribes, had never visited the U.S. in relation to the alleged conspiracy." The alleged bribes, Clegg said, were handled by a Gibraltar company and paid through Swiss bank accounts.
The U.S. indictment charged Tesler with using his Gibraltar company, Tri-Star Investments, to funnel about $132 million in bribes to Nigerian officials. The payments were intended to secure contracts worth more than $6 billion to build liquefied natural gas facilities on Nigeria's Bonny Island. The DOJ said Tesler was acting for a joint venture known as TSKJ, equally owned by KBR, Technip, SA of France, Snamprogetti Netherlands B.V. (a subsidiary of Saipem SpA of Italy) and JGC of Japan.
The Crown's lawyer, David Perry QC, said U.S.-based companies were involved and money had been channelled through U.S. bank accounts. According to a report in the Guardian, Perry said the allegations against Tesler could be criminal offenses "in Britain as well as the U.S., so extradition could take place under normal legal rules."
In the indictment, the U.S. made this claim of jurisdiction:
At all times relevant to this Indictment, Tesler was an "agent" of an "issuer" within the meaning of the FCPA, Title 15, United States Code, Section 78dd- 1, an "agent" of a "domestic concern" within the meaning of the FCPA, Title 15, United States Code, Section 78dd-2, and an "agent" of a "person" within the meaning of the FCPA, Title 15, United States Code, Section 78dd-3.
The London court continued Tesler's extradiction hearing.
Down But Not Out. Former congressman William Jefferson, sentenced last month to 13 years in prison for corruption and conspiring to violate the Foreign Corrupt Practices Act, managed to file his notice of appeal on time. It was touch-and-go after Jefferson, 62, filed for bankruptcy in August, saying he owes his criminal defense lawyers more than $5.7 million. But two of the lawyers are sticking with him.
The Times Picayune reported that attorneys Robert Trout and Amy Jackson received approval last week from the trial judge, T.S. Ellis III, for the court to pay Jefferson's legal fees for the appeal. The lawyers won't get their full rates but a lower amount equivalent to court-appointed public defenders. Ellis also approved their request for the court to pay for a transcript of the six-week trial, probably about $26,000.
Jefferson is free on bail pending his appeal. It's expected to take at least a year. Judge Ellis said he released Jefferson because his defense raised an argument that's untested in the appellate courts. Jefferson says he was acting as a private citizen, while a corruption statute he was convicted under applies only to public acts by elected officials. The judge also said he regretted not making the jury's verdict form more specific. (See our post here.)
Jefferson was convicted on 11 charges -- conspiracy, soliciting and taking bribes, depriving citizens of honest services, money laundering and racketeering. He was acquitted of five charges, including Count 11 of the indictment -- the only substantive FCPA charge he faced.
tagged Agents, Jeffrey Tesler, Jurisdiction, KBR, Nigeria, Saipem, Serious Fraud Office, Snamprogetti, United Kingdom, William Jefferson
tagged Agents, Blackwater, Dyncorp, Facilitating Payments
Ex-ABB Manager Arrested, Mexican Agent Pleads Guilty
By Richard L. Cassin | Monday, November 23, 2009 at 8:28PM
The Justice Department announced on Monday (November 23) the arrest of the former general manager of a Sugar Land, Texas-based ABB subsidiary for his alleged role in a conspiracy to bribe Mexican government officials. The bribes were allegedly intended to secure contracts with the Comisión Federal de Electricidad (CFE), a Mexican state-owned utility company. The DOJ also said a Mexican citizen who acted as a middleman pleaded guilty in the case and is cooperating in the investigation.
The DOJ charged John Joseph O'Shea, 57, of Pleasanton, California, in an 18-count indictment returned by a federal grand jury in Houston on November 16. He was charged with one count of conspiracy to violate the Foreign Corrupt Practices Act (18 U.S.C. § 371), 12 counts of violating the FCPA (15 U.S.C. § 78dd-2 et seq), four counts of international money laundering (18 U.S.C. § 1956), and one count of falsifying records in a federal investigation (18 U.S.C. § 1519).
tagged ABB, Agents, Fernando Maya Basurto, Germany, John O'Shea, Mexico, jur
By Richard L. Cassin | Wednesday, March 4, 2009 at 7:02PM
Our posts about extending codes of conduct to third parties (here and here) attracted some thoughtful comments from readers. We first heard from Pete from DC, an old friend of the FCPA Blog. He helps out whenever he senses we're in over our head. This time he wisely tied the issue of third-party compliance to audit rights. Here's what he said:
I recall the post you did earlier (here) about audit rights - it's bad to have them and not use them if something pops up. In regard to imposing compliance requirements, it occurs to me that you have the same issue. The DOJ said in FCPA Opinion Procedure Release 04-02 that part of their expectation is "Independent audits by outside counsel and auditors, at no longer that three-year intervals, to ensure that the Compliance Code, including its anti-corruption provisions, are implemented in an effective manner."
If you extend your compliance program to third parties, you need to have audit rights and the guts to use them. Furthermore, the audit rights can't be limited to financial data relating to the third party's business - it has to be completely "open kimono," with access to the business partner's own compliance policies, contracts, etc. That's a tough sell, but if it's a high-risk country / industry / entity, it may be the only way to truly mitigate FCPA risk.
Another reader took a darker view -- that is, using third-party compliance to "paper over" red flags that come up with intermediaries. We wouldn't recommend that medicine to anyone, but here's what our reader said about it:
Your post doesn't address one of the main reasons why ethical standards and law compliance provisions are extended to third parties in the first place.
A well drafted contract will provide the company with an "out" if it is concerned that one of its contractors may violate the FCPA or other law even if those laws are not actually applicable to the contractor. Therefore, contracts typically incorporate by reference those requirements where third party contractors can create liability for the company. Besides the FCPA, these can include references to other U.S. laws such as export controls, sanctions and anti-boycott as well as the company's own policies.
It's important to know the commercial as well as the compliance rationale behind the so-called extension. Including these provisions in contracts is a good and increasingly common commercial practice that helps to achieve the long term aims of anti-corruption and other legislation through commercial influence. If the inclusion of these standards results in a greater exposure to the companies who include them, that's definitely a "con" and surely an unintended consequence.
We also heard from Doug Cornelius at the Compliance Building blog. Doug's posts about compliance and business ethics are part of our daily diet. His comment raised a neat point about the dangers of inconsistent standards. He said:
Dear FCPA Blog -
That's some of what we've heard (the printable parts, anyway) on the subject of third-party compliance. The topic stirs plenty of interest, warnings and fear. That makes sense. Most Foreign Corrupt Practices Act offenses involve intermediaries, and yet most executives don't think their companies are dealing successfully with third-party risks. That was the conclusion from KPMG's 2008 Anti-Bribery and Anti-Corruption Survey that we talked about here, and the recent survey by the Society of Corporate Compliance & Ethics. That one found that most companies don't disseminate their internal codes of conduct to third parties or require third parties to certify to their own codes.
tagged Agents, Audit Rights, Opinion Procedure Release, Red Flags