Several prior posts (see here, here, here and here for instance) have highlighted the clustering phenomenon and how a few discreet instances of alleged bribery yield an inordinate amount of Foreign Corrupt Practices Act enforcement activity against individuals.
One such example is the DOJ’s long-standing enforcement action (charges were first brought in late 2015) in connection with alleged corrupt schemes to secure contracts from Venezuela’s state-owned and state-controlled energy company, PDVSA.
Yesterday, the DOJ announced that two additional individuals were criminally charged “for their alleged roles in a scheme to corruptly secure business advantages, including contracts and payment on past due invoices, from Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A. (PDVSA).”
In this criminal indictment, Rafael Enrique Pinto Franceschi (“Pinto” – a Venezuelan national and resident of the U.S.) and Franz Herman Muller Huber (“Muller” – also a Venezuelan national and resident of the U.S.) were each charged with one count of conspiracy to violate the FCPA, one count of conspiracy to commit wire fraud, two counts of wire fraud, and one count of conspiracy to launder money.
According to the indictment, Muller was the President of Company A (described as a U.S.-based supplier of industrial equipment which, along with its affiliates, were PDVSA’s exclusive supplier of heavy equipment manufactured by another company headquartered in the U.S.) and Pinto was employed as a sales representative for Company A. According to this LinkedIn page, Muller is associated with Venequip Machinery Sales Corp.
According to the indictment:
“Pinto and the PDVSA officials [described as Jose Orlando Camacho – a dual Venezuelan and U.S. citizen who has been charged separately and was employed by PDVSA including as a sourcing supervisor and planning and procurement manager for PDVSA Services Inc. (PSI) – a U.S. based affiliate of PDVSA; Ivan Alexis Guedez – a U.S. citizen who has been charged separately and was employed by PSI; and Official A a Venezuelan national and resident of the U.S. who was employed by PSI as a buyer] agreed that in exchange for bribe payments, which they called “commissions,” the PDVSA officials would assist Company A in its business with PDVSA. Pinto, and later Muller, would receive kickbacks as part of the scheme. They agreed that they would take three percent of each payment that PDVSA made to Company A and split it equally amongst themselves.
Pinto and Muller, together with others, paid bribes to the PDVSA officials through the use of interstate and foreign wires in order to secure an improper advantage, influence acts and decisions of the PDVSA officials in their official capacities, and induce the PDVSA officials to do and omit to do certain acts, including, but not limited to:
a. taking steps to ensure that end users at PDVSA would request a certain brand of equipment for which Company A was a distributor, resulting in additional business from PDVSA lor Company A;
b. providing Pinto with inside information regarding PDVSA;
c. assisting Company A in receiving payment for previously awarded PDVSA business, including by requesting payment priority for Company A over other vendors.”
According to the indictment, Pinto, Muller and others concealed the nature, source and ownership of the bribes and kickbacks by, among other things, create false invoices and “communicating about the scheme using their personal email accounts, rather than their official Company A email accounts.”
As stated in the DOJ’s release:
“With the unsealing of the [Pinto and Muller] indictment, the Justice Department has announced charges against 21 individuals, 15 of whom have pleaded guilty, as part of a larger, ongoing investigation by the U.S. government into bribery at PDVSA.”
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