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The First Corporate FCPA Enforcement Action In The Trump Era Is A $11.2 Million Declination With Disgorgement And Forfeiture Against Linde For Nearly Decade-Old Conduct Of An Acquired Entity

Linde

Last Friday the DOJ quietly updated its FCPA Pilot Program “declinations” page to include a June 16th letter from the Fraud Section and the U.S. Attorney’s Office (D.N.J.) to counsel for Linde North America Inc. and Linde Gas North America LLC.

The letter states that “consistent with the FCPA Pilot Program announced on April 5, 2016, the [DOJ is closing its] investigation of [Linde] and certain of their subsidiaries and affiliates concerning violations of the FCPA.”

Pursuant to the letter agreement, Linde agreed to disgorge or forfeit approximately $11.2 million. The Linde enforcement action is the first corporate FCPA enforcement action in the Trump era and is similar to the previous “declinations with disgorgement” enforcement actions released by the Obama DOJ in September 2016. (See here for a prior post).

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Africa Sting – Alvirez Superseding Indictment and Expected Plea – New Charges Relating to the Republic of Georgia

When the Africa Sting indictments were first unsealed, I noted as follows:

“Given the number of individuals indicted, and the motivations for pleading under the Sentencing Guidelines, it would seem inevitable that one or more individuals will soon “flip” and cooperate with the government thereby potentially complicating the defenses of the remaining individuals.”

Christopher Matthew’s at Main Justice reports this evening (see here) that Daniel Alvirez, the President of ALS Technologies, Inc., is expected to plead guilty to charges of conspiracy to violate the FCPA set forth in a superseding indictment and cooperate in the government’s investigation.

The superseding indictment (here) contains two conspiracy charges. The superseding indictment drops the substantive FCPA violations and conspiracy to commit money laundering charges in the original indictment.

The first charge in the superseding indictment is substantively similar to the conspiracy charge and substantive FCPA charges in the original indictment (here) and involves the same core set of facts as in the original indictment, but with more detail. For instance, the superseding indictment specifically lists the names of the Africa Sting defendants and references specific telephone calls and e-mails. The superseding indictment also newly alleges that Alvirez and others were not in Las Vegas merely to attend the Shot Show, but also “for the purpose of attending a meeting between the suppliers” in the deal and the hypothetical “Minister of Defense of Country A.” According to the superseding indictment, at this meeting Alvirez and others “expected to receive a payment at that meeting amounting to 60% of the inflated sales price” of the goods initially sold in the deal.

The second conspiracy charge in the superseding indictment is new and contains facts not yet alleged in this case concerning the Republic of Georgia.

According to the superseding indictment, Alvirez participated in “conversations and meetings with sales agents who Alvirez knew were making corrupt payments to Ministry of Defense officials of the Republic of Georgia (‘Georgia’) in order to assist in obtaining business from the government of Georgia.” The superseding indictment alleges that “Alvirez would facilitate the sale of military and law enforcement equipment to the government of Georgia, with the assistance of corrupt sales agents, knowing that the sales agents would make corrupt payments to Georgian government officials to assist in obtaining and retaining business from the government of Georgia” and that Alvirez accepted “commission payments from the corrupt sales agents for facilitating the corrupt deals with the government of Georgia.”

The Republic of Georgia charge references an “Israeli sales agent” “an executive of a company that supplied ammunition to facilitate the Israeli sales agent’s purchase (“Co-Conspirator 1”) and “Miami sales agent.”

Unlike the original Africa Sting charge, the Republic of Georgia charge does not mention any involvement by FBI agents and/or a sting.

Matthews quotes an individual familiar with the case who says that “Alvirez is a key part of the widespread conspiracy because he introduced many of the defendants to the government’s cooperating witness, Richard Bistrong, who facilitated meetings between the defendants and the undercover FBI agents.” According to this source, “other defendants were likely to work out plea agreements and that the government is using the cases to go after other defense-industry companies” including “corrupt deals in several specific countries, including the Republic of Georgia and Guatemala.”

Clearly this new development complicates the defense of the remaining Africa Sting defendants and foreshadows a much larger government investigation seemingly not involving the entrapment defense at issue in the original charges.

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