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The Panama Papers Origins Of The Parker FCPA Enforcement Action

This recent post [1] highlighted the DOJ’s Foreign Corrupt Practices Act enforcement action against Lawrence Parker in connection with a telecommunications bribery scheme in Aruba in which the DOJ alleged that Servicio di Telecommunicacion di Aruba N.V. (SETAR) was an instrumentality of the Aruban government such that Egbert Yvan Ferdinand Koolman (a product manager at SETAR and alleged bribe recepient) was a “foreign official.”

This post highlights that the likely origin of the FCPA enforcement action against Parker was this March 2017 civil [2] complaint filed in U.S. court by SETAR against Koolman, Parker and several other entities and individuals and how the civil complaint originated with the so-called Panama Papers.

In summary fashion, SETAR’s complaint alleges:

“This case arises from Egbert Yvan Ferdinand Koolman’s orchestration, oversight and direction of a more than decade-long scheme of anti-competitive and racketeering activity. At all relevant times, his and others’ objective was the theft of more than $15 million from Setar  N.V. through a scheme of illegal kickbacks and improperly obtained compensation, revenues and profits on mobile phone equipment purchase contracts run through a web of secretly related companies.

Each of the Defendants needed, and in fact depended on, the participation of the others to accomplish their common purpose of fraud and deceit for financial gain. Prior to being terminated for cause in August 2016, Koolman was in charge of procurement of cellular phones and other mobile equipment for Setar – a privatized full telecommunications service provider for the island of Aruba. The other Defendants were either Setar’s suppliers or principals of Setar’s suppliers from at least 2005 through 2016. During that more than ten-year period, Koolman repeatedly and systematically abused his position with Setar by manipulating the procurement process to steer business to his co-conspirators, who would reward Koolman and others with millions of dollars in kickbacks, and who themselves were awarded millions of dollars in illgotten purchase contracts on mobile phone equipment. The Defendants’ illicit scheme of kickbacks, commercial bribery, bid-rigging and price-fixing was anti-competitive, and it was a quintessentially symbiotic illegal racketeering enterprise. All told, their individual and collective misconduct over a more than ten year period cost Setar tens of millions of dollars.”

[3]

Under the heading “The Panama Papers and Koolman’s Dismissal from Setar,” the complaint alleges:

“After the Panama Papers became public in 2015, Setar’s Board and Director independently learned that a “Koolman” who had been linked in the Panama Papers to Defendant 3DK Consulting Corp was, in fact, the same Koolman that Setar employed as its Product Manager. In a subsequent meeting with Setar representatives on May 3, 2016, Koolman finally admitted to his involvement with 3DK, but his admission was limited and highly misleading. Koolman admitted to Setar representatives that he had established 3DK with an unnamed business partner, but he also told them the company had been inactive for the past three (3) years and never got as far as opening a business bank account. In Koolman’s words, 3DK “never got off the ground.”

Importantly, this was the first instance in which Koolman had ever mentioned anything to Setar about 3DK, despite the fact that 3DK had existed for roughly a decade and apparently with little regard for the obvious conflicts of interest it presented for his continued employment with Setar. More importantly, Koolman’s disclosure was a lie.”

The DOJ’s FCPA enforcement against Parker does not specifically identify his companies, but SETAR’s complaint alleges that the following companies are connected to Parker:

For previous reporting on SETAR’s compliant see here [4] and here [5].

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