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).
As stated in the DOJ’s release:
“[T]he defendants engaged in two bribery schemes to pay high-level officials of Chad and Uganda in exchange for business advantages for the Energy Company, a Shanghai-headquartered multibillion-dollar conglomerate that operates internationally in the energy and financial sectors. Defendant Ho was the head of a non-governmental organization based in Hong Kong and Virginia (the “Energy NGO”) that holds “Special Consultative Status” with the United Nations (UN) Economic and Social Council. The Energy NGO is funded by the Energy Company.
The complaint alleges that Ho, with Gadio’s assistance, caused the Energy Company to offer a $2 million bribe to the President of Chad in exchange for securing business advantages for the Energy Company in its efforts to obtain valuable oil rights from the Chadian government. In particular, in exchange for the bribe, the President of Chad provided the Energy Company with, among other things, an exclusive opportunity to obtain particular oil rights in Chad without facing international competition. Gadio, who is the former Foreign Minister of Senegal and who operated an international consulting firm, is alleged to have played an instrumental role in the scheme by, among other things, connecting Ho with the President of Chad and conveying the $2 million bribe offer to the President of Chad. Ho allegedly compensated Gadio by paying him $400,000 via wires transmitted through New York, New York.
It is further alleged that Ho caused a $500,000 bribe to be paid, via wires transmitted through New York, New York, to an account designated by the Minister of Foreign Affairs of Uganda, who had recently completed his term as the President of the UN General Assembly (the “Ugandan Foreign Minister”). Ho also allegedly provided the Ugandan Foreign Minister, as well as the President of Uganda, with gifts and promises of future benefits, including offering to share the profits of a potential joint venture in Uganda involving the Energy Company and businesses owned by the families of the Ugandan Foreign Minister and the President of Uganda. These payments and promises were allegedly made in exchange for assistance from the Ugandan Foreign Minister in obtaining business advantages for the Energy Company, including the potential acquisition of a Ugandan bank.”
From a jurisdictional standpoint, CEFC is alleged to be a “domestic concern” and Ho is alleged to be an officer, director, employee, and agent of the domestic concern. Gadio is alleged to be a lawful permanent resident of the U.S. In addition, the complaint invokes dd-3 of the FCPA’s anti-bribery provisions applicable to foreign nationals.
The criminal compliant alleges:
“Ho furthered both schemes while present in New York, New York, and also caused wire transfers in furtherance of both schemes to pass through New York, New York.”
Among the allegations are that Ho caused a $500,000 payment to an account in Uganda “purportedly for the benefit of the Ugandan Foreign Minister’s charitable foundation” and that “Ho and his delegation provided gifts to the President of Uganda and to the Ugandan Foreign Minister and his wife.” Regarding the charitable contribution, the complaint alleges that the foundation does not appear to have any physical address or website.
In the DOJ’s release, Acting Assistant Attorney General Kenneth Blanco stated:
“This alleged scheme involved bribes at the highest levels of the governments of two nations. The Criminal Division is committed to investigating and prosecuting corrupt individuals who put at risk a level playing field for corporate competitiveness, regardless of where they live or work. Their bribes and corrupt acts hurt our economy and undermine confidence in the free marketplace.”
Acting U.S. Attorney Joon Kim (S.D. of New York) stated:
“In an international corruption scheme that spanned the globe, Chi Ping Patrick Ho and Cheikh Gadio allegedly conspired to bribe African government officials on behalf of a Chinese energy conglomerate. Wiring almost a million dollars through New York’s banking system in furtherance of their corrupt schemes, the defendants allegedly sought to generate business through bribes paid to the President of Chad and the Ugandan Foreign Minister. As alleged, Ho’s Ugandan scheme was hatched in the halls of the United Nations in New York, when the country’s current Foreign Minister served as the President of the U.N. General Assembly, and then continued unabated upon his return to Uganda. International bribery not only harms legitimate businesses and fair competition, but it also destroys public faith in the integrity of government. And when this type of international corruption and bribery touches our shores and our financial system, as the alleged schemes did, federal criminal charges in an American court may very well be the end result.”
William Sweeney Jr. (FBI New York Field Office) stated:
“The scheme described in this case boils down to these subjects allegedly trying to get their hands on the rights to lucrative opportunities in Africa. They were allegedly willing to throw money at the leaders of two countries to bypass the normal course of business, but didn’t realize that using the U.S. banking system would be their undoing. The FBI, our partners in the IRS and the law enforcement community work diligently day after day to protect the integrity of our financial institutions, and stop foreign entities corrupting international commerce.”
James Robnett (Special Agent in Charge of the Internal Revenue Service Criminal Investigation) stated:
“IRS Criminal Investigation operates worldwide and has the expertise to identify bribery schemes such as alleged in the criminal complaint. Our special agents are especially skilled at piecing together these financial puzzles, even those that involve such high level participants.”
Angel Melendez (Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations New York Field Office) stated:
“These individuals allegedly offered millions of dollars in bribes to foreign officials, disguised as charitable donations, in order to seek business advantages. One used his position with a United Nations Council to further this scheme. We will continue to aggressively investigate financial crimes committed by corrupt foreign officials while working collaboratively with our counterparts at the FBI and IRS.”
CEFC China Energy Co. Limited issued the following statement :
“1. China Energy Fund, registered in Hong Kong, is a non-governmental and non-profit organization established and fully funded by CEFC China in accordance with the relevant laws. It aims to promote international energy research, conduct public diplomacy, and facilitate global energy cooperation and cultural exchange.
2. As a non-governmental and non-profit organization, the Fund is not involved in any of the commercial activities of CEFC China, and has no commercial authorization relationship whatsoever with the company.
3. CEFC China does not have any investment activities in Uganda. CEFC China’s investment project in Chad is only a financial investment in CPC Corporation, Taiwan. Therefore, it does not have any of the so-called “interest relationship” with the Chadian government.
4. CEFC China conducts its business activities in strict accordance with the law, and it operates under sound business management. With the establishment of the Board of Supervisors, the Discipline Inspection Committee and the Audit Department, the company exercises strict internal control and has a strict supervisory system in place. Any activities that go against the law and discipline are strictly prohibited by the company.
We will continue to follow the latest developments of the incident, and will take necessary measures as required to safeguard our legitimate rights and interests.”
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