Similar to how the April 2018 indictment of Frank Roberto Chatburn Ripalda alleging a bribery scheme involving PetroEcuador officials generally went unnoticed (see here  for the prior post), this May 2019 indictment  of Armengol Alfonso Cevallas Diaz (an Ecuadorian citizen) and Jose Melquiades Cisneros Alarcon (an Ecuadorian citizen and permanent resident of the U.S.) concerning the same alleged bribery scheme also generally went unnoticed.
The indictment charges Cevallos and Cisneros with conspiracy to violate the FCPA’s anti-bribery provisions, conspiracy to commit money laundering, and numerous money laundering offenses.
According to the indictment Cevallos, Cisneros, and their co-conspirators “unlawfully enriched themselves by making corrupt payments to PetroEcuador [described as the state-owned oil company of Ecuador] officials in order to obtain and retain contracts from PetroEcuador for companies controlled by or associated with Cevallos and others.
The PetroEcuador officials are described as Marcelo Reyes Lopez (an employee of PetroEcuador from 2012 – 2013), PetroEcuador Officials 1 (an employee of PetroEcuador from 2013 – 2016) and PetroEcuador Official 2 (an employee of PetroEcuador from 2012 – 2013).
The indictment alleges that the defendants along with their co-conspirators funneled bribe payments totaling approximately $4.4 million, including through U.S. bank accounts, to PetroEcuador officials” and that the individuals “also attempted to conceal the bribe payments to Reyes by creating O&G International Supplies Inc. (a Miami-based company), opening a U.S. bank account for O&G, and holding O&G in Cisnero’s name while Reyes was a PetroEcuador official.
The indictment also alleges that Cisneros purchased property in Florida held in the name of a family member of PetroEcuador Official 2 and that Cisneros “transformed ownership of O&G, which owned six properties purchased in part with proceeds of the bribe payments from Oil Services Company [described as an Ecuadorian company that provided services in the oil industry, including to PetroEcuador] and Gaileo [described as an Ecuadorian company that provides services in the oil industry, including to PetroEcuador], to Reyes and Reyes’ family members.
In the related Chatburn enforcement action, a magistrate judge has recommended that Chatburn’s motion to dismiss motion laundering charges be denied. The opinion highlights how in October 2017 the U.S. government submitted an official request to the Republic of Panama under the United Nations Convention Against Corruption seeking bank account records and corporate records.
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