Worldwide: Red Notice Newsletter - May 2018


New Unaoil Charges by U.K. Serious Fraud Office

On May 22, 2018, the United Kingdom's Serious Fraud Office (SFO) charged two additional individuals in the ongoing probe related to allegations that Unaoil SAM made improper payments on behalf of companies in the oil and gas sectors to governments in the Middle East. Basil Al Jarah, Unaoil's former territory manager for Iraq, and Ziad Akle, Unaoil's former "Iraq partner," face charges that they conspired to make corrupt payments on behalf of Leighton Contractors Singapore PTE Ltd (a subsidiary of Australia-based Leighton Holdings now d/b/a CIMIC Group Limited) to secure a contract to build oil pipelines in Iraq in 2010. Al Jarah and Akle were first charged in November 2017 in connection with payments made on behalf of SBM Offshore. Two other Unaoil executives were also charged in connection with SBM Offshore payments.

The SFO's press release is available here. For more information, see coverage from the FCPA Blog here. Red Notice previously covered the Unaoil investigation in December 2017.

Four-Year Sentence for Chinese Businessman for UN Bribery Scheme

On May 11, 2018, Judge Vernon Broderick of the U.S. District Court for the Southern District of New York sentenced Chinese businessman Ng Lap Seng to 48 months in prison and three years of supervised release for Ng's role in a scheme to bribe U.N. officials for the construction of a conference center in his hometown of Macau. Ng was convicted in July 2017 of money laundering, violating the Foreign Corrupt Practices Act (FCPA) and U.S. domestic bribery laws, and engaging in conspiracy related to the bribery offenses. Ng is the first to be sentenced of six defendants who have been charged in this matter. Red Notice previously reported on events in this U.N. scheme in the April 2018 edition.

The Department of Justice's (DOJ) press release is available here. For more information, see coverage from Law360 here and from the FCPA Blog here.

New DOJ Policy to Limit "Duplicative Penalties"

On May 9, 2018, Deputy Attorney General Rod Rosenstein announced a new DOJ policy to encourage cooperation among U.S. law enforcement agencies to avoid levying multiple penalties for the same conduct against the same defendant. The policy is discussed in a new section of the U.S. Attorneys' Manual. In particular, the manual counsels that criminal enforcement authority should not be used "solely to persuade a company to pay a larger settlement in a civil case," and that departments and divisions within the DOJ should coordinate with each other, as well as with other federal, state, local, and international authorities, to avoid imposing duplicative fines, penalties, and forfeitures. Rosenstein reiterated the new policy briefly in remarks delivered to compliance and risk professionals on May 21, specifically related to the policy's applicability under the FCPA.

Rosenstein's May 9 remarks are available here, and the updated U.S. Attorneys' Manual section is available here. Rosenstein's May 21 remarks are available here. For more information on the new policy, see coverage from The Wall Street Journal here and from the FCPA Blog here.

SEC's Peikin Outlines Approaches for Effective and Ineffective Wells Meetings

On May 9, 2018, Steve Peikin, the CoDirector of the Securities and Exchange Commission's (SEC) Division of Enforcement, gave remarks at the New York City Bar Association's White Collar Crime Institute, where he outlined his views regarding successful "Wells meetings," which take place between a defendant and SEC enforcement staff after the SEC has opened an investigation, but before the staff make charging recommendations to the SEC. The process allows those brought before the agency and their counsel to provide input on key issues in a case. Among his suggestions to ensure an effective Wells meeting, Peikin advised defense counsel to focus on key issues rather than addressing every fact in the case, and to educate the SEC staff on the operative facts before the Wells meeting, rather than trying to introduce new facts that the SEC staff has not had an opportunity to consider. Peikin also advised defense counsel that they can be more effective by providing recent and persuasive case law and/or prior SEC actions that support their positions, carefully setting out the ways in which a defendant is entitled to cooperation credit and substantively discussing the weaknesses in the SEC's proposed case should it proceed to trial.

Read Peikin's remarks here.

African Development Bank Debars Chinese Electric Power Company over Misrepresentations in Project Bids

On May 7, 2018, the African Development Bank ("AfDB") announced its debarment of CHINT Electric Co., Ltd. for 36 months over allegations that CHINT misrepresented its qualifications in seven bids for projects in Ethiopia, Tanzania and Zimbabwe. Early relief from the disbarment, reducing it to two years, is available to CHINT should it achieve early compliance with all of the conditions, such an enhancing internal compliance mechanisms. The settlement agreement between the AfDB and CHINT also requires CHINT to cooperate with the AfDB in its "investigations of unrelated cases of misconduct" in AfDB-financed projects.

The debarment of CHINT qualifies for cross-debarment by other Multilateral Development Banks under the Agreement of Mutual Recognition of Debarments that was signed on April 9, 2010 (available here).

See the AfDB's press release here. For more information, see coverage from the FCPA Blog here.

U.S. Charges Honduran Official's Brother with Laundering Bribe Money

On May 1, 2018, the DOJ charged Carlos Alberto Zelaya Rojas, a Honduran citizen living in New Orleans, with money laundering violations, alleging that he conspired with his brother—a former Honduran government official who was, at the time, the executive director of the Honduran Institute for Social Security—to launder more than $1.3 million in funds allegedly received as bribe payments. Rojas allegedly used some of the funds to purchase rental properties in the New Orleans area.

The DOJ's press release is available here. For more information, see coverage from the FCPA Blog here.

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