As highlighted in this previous post, in January 2017 the DOJ announced Foreign Corrupt Practices Act, and related charges, against four individuals for their roles in a scheme to pay $2.5 million in bribes to facilitate the $800 million sale of a commercial building in Vietnam (the so-called Landmark 72 pictured) to a Middle Eastern sovereign wealth fund.
It certainly was not a typical FCPA enforcement action. In fact it was downright strange in that the bribery scheme was unsuccessful and the third party intended to facilitate the bribery scheme simply pocketed the money for himself.
In the criminal indictment, the DOJ charged Joo Hyun Bahn and his father Ban Ki Sang with conspiracy to violate the FCPA’s anti-bribery provisions, three substantive FCPA offenses, and other criminal offenses. In addition, Malcom Harris, the third party, was criminally charged with one count of wire fraud, one count of conducting monetary transactions in illegal funds and aggravated identity theft. San Woo was also charged in a separate complaint with one count of conspiracy to violate the FCPA for the same alleged bribery scheme.
As highlighted in this previous post, in January 2018 Bahn pleaded guilty to one count of conspiracy to violate the FCPA and one count of violating the FCPA. The DOJ sought a 70-87 month sentence for Bahn (see here for the DOJ’s sentencing brief, see here for Bahn’s brief).
However, earlier today U.S. District Judge Edgardo Ramos of the Southern District of New York sentenced Bahn to 6 months. (See here for coverage).
In a related development and based on the same core conduct as the DOJ action, the SEC announced earlier today an administrative order finding that Bahn, “while acting as a broker for Colliers International Group, Inc.” violated the FCPA’s antibribery provisions, caused violations of the Act’s books and records provisions, intentionally circumvented Colliers’ internal accounting controls, and falsified its corporate books and records. As noted in the release, Bahn agreed to pay $225,000 in disgorgement, which was deemed satisfied by the forfeiture and restitution ordered at his September 6, 2018 sentencing in a related criminal proceeding.”
The SEC’s order states in summary fashion as follows:
“From March 2013 through May 2015, Bahn, while acting as a broker for Colliers International Group Inc. (“Colliers”), a foreign private issuer, violated the [FCPA], when he attempted to bribe a foreign official of a country in the Middle East in connection with his efforts to broker the sale of an $800 million highrise commercial building in Vietnam, known as Landmark 72. The foreign official was unaware of the offered bribe. In an effort to obtain money for himself, an accomplice had misrepresented the official’s involvement in the scheme to Bahn. As part of his illicit conduct, Bahn circumvented Colliers’ internal accounting controls, fabricated documents, created fictitious email messages, and lied to Colliers executives. Among other actions, Bahn falsely represented that the foreign country’s sovereign wealth fund had committed to acquire the building, thus causing Colliers to record commission revenue on a transaction that never had a committed buyer and never ultimately closed.
Bahn’s conduct violated the anti-bribery provisions of the FCPA.
Bahn also caused Colliers’ violations of [books and records provisions] in which Colliers failed to make and keep books, records, and accounts which, in reasonable detail, accurately and fairly reflected its transactions and disposition of its assets.
Bahn also took steps to circumvent Colliers’ then existing internal accounting controls by making false statements, fabricating documents, and creating multiple email accounts in order that: (a) the Landmark 72 transaction appeared to be a legitimate real estate transaction; and (b) Colliers improperly recognized the commission revenue derived therefrom in its books and records, thereby violating Section 13(b)(5) of the Exchange Act and Exchange Act Rule 13b2-1.”
In the Order, Colliers is described as follows:
“[A] Canadian corporation with headquarters in Toronto, Ontario. Colliers is a foreign private issuer that has a class of securities registered pursuant to Exchange Act Section 12(b) and listed on the NASDAQ stock market and the Toronto Securities Exchange. In June 2015, Colliers became a successor of the issuer, FirstService Corporation, following a spin-off from FirstService.”
FCPA Institute - Phoenix (January 17-18, 2019)
A unique two-day learning experience ideal for a diverse group of professionals seeking to elevate their FCPA knowledge and practical skills through active learing. Learn more, spend less. CLE credit is available.