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DOJ Charges Two Individuals With FCPA And Other Violations In Connection With An African Bribery Scheme On Behalf Of CEFC China Energy Company Ltd.

ChinaEnergy

Yesterday, the DOJ announced that Chi Ping Patrick Ho (of Hong Kong, China) and Cheikh Gadio (of Senegal) were criminally charged with conspiring to violate the Foreign Corrupt Practices Act, violating the FCPA, conspiring to commit international money laundering, and committing international money laundering.

Although not specifically mentioned in the DOJ’s indictment, it is easy to connect the dots that Ho is associated with China Energy Fund Committee (CEFC) and as noted here, CEFC is “fully funded by CEFC China Energy Company Limited.” Gadio is associated with Sarata Holding (a consulting and advising firm specializing in business and development partnerships with Africa).

Big picture – in the past two weeks – the DOJ has announced three core FCPA enforcement actions involving 9 individuals. (See here for the November 7th action against 5 individuals associated with Rolls-Royce and here for the November 9th action against 2 individuals associated with SBM Offshore).

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DOJ Announces FCPA Enforcement Action Against Two Former SBM Offshore Executives

sbm

If you are scoring at home, in the past 48 hours the DOJ has announced FCPA enforcement actions involving 7 individuals. (See here for the prior post regarding the FCPA enforcement action earlier this week against 5 individuals associated with Rolls-Royce).

By way of comparison, as highlighted in this post, in all of 2016 8 individuals were involved in DOJ FCPA enforcement actions and in 2015 8 individuals were also involved in DOJ FCPA enforcement actions.

In other words, those predicting a slow down in FCPA enforcement in the Trump administration were ignorant to begin with, but now really need to move on to other topics.

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Various Individuals Associated With Rolls-Royce Criminally Charged In Connection With Kazakhstan – Chinese Pipeline Project

Rolls

As highlighted in prior posts here and here, in January 2017 the DOJ announced a $170 million Foreign Corrupt Practices Act enforcement action against U.K. based Rolls-Royce. The allegations included several generic references to employees at Rolls-Royce and Rolls-Royce Energy Systems (RRESI, an indirect subsidiary located in Ohio) who conspired to cause “to make over $35 million in commission payments to commercial advisors and others, knowing that the commission payments would be used to bribe foreign officials on behalf of Rolls-Royce and RRESI in Thailand, Brazil, Kazakhstan, Azerbaijan, Angola, Iraq and elsewhere, in exchange for foreign officials’ assistance in providing confidential information and awarding contracts to Rolls-Royce, RRESI, and affiliated entities.”

Earlier this week, the DOJ announced an FCPA enforcement action against five individuals based on the same Kazakhstan conduct alleged in the prior corporate action. That is, bribery in connection with an RRESI contract to supply gas turbine units to Asia Gas Pipeline LLC (AGP) for approximately $145 million.

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From The Dockets

Judicial Decision

As highlighted in this previous post, Misonix has been under FCPA scrutiny since September 2016 and in March 2017 Cicel (Beijing) Science & Technology Co. Ltd. brought a variety of civil claims against Misonix concerning its business relationship with the company.

Among the claims brought by Cicel was a breach of contract claim. Misonix acknowledged that it terminated the contract, but argued that it “was justified in doing so because of Misonix’s FCPA investigation” regarding Cicel. In response, Cicel claimed that the investigation “was a ruse for breaching the contract.” Recently, U.S. District Court Judge Arthur Spatt (E.D.N.Y.) allowed Cicel’s claim to proceed beyond the motion to dismiss stage. (See 2017 WL 4535933).

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FCPA And Then Some As Alere Resolves SEC Enforcement Action

alere

One instance of Foreign Corrupt Practices Act scrutiny that has attracted significant investor interest over the past few years (because it occurred in the context of an M&A transaction) involved Alere Inc.

As highlighted in this previous post, the company disclosed in August 2015 that it received an SEC subpoena inquiring about its foreign business practices. Thereafter, Alere announced that it would be acquired by Abbott in a $5.8 billion transaction.

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