In recent years, several entities employing alleged “foreign officials” who receive bribe payments from individuals prosecuted for Foreign Corrupt Practices Act offenses have sought “victim” status under the Mandatory Victims Restitution Act.
(See here for more on the unsuccessful attempt by Instituto Constarricense de Electricidad of Costa Rica in connection with the Alcatel-Lucent FCPA enforcement action; see here for more on the unsuccessful attempt by a subsidiary of Petroleos de Venezuela, S.A. in connection with individual FCPA enforcement actions involving the entity).
In summary fashion, Petroecuador states:
“Petroecuador is the principal corporate victim of Defendant Frank Roberto Chatburn Ripalda’s (“Chatburn”) criminal conduct and has suffered financial losses as a direct result of Chatburn’s and his co-conspirators’ criminal acts. Defendant Chatburn participated in an illegal bribery and money laundering scheme committed by a closely-knit group of individuals that included bribe-receiving corrupt Petroecuador former employees, bribe-paying owners of companies that benefited from corruption-induced Petroecuador contracts, and associated financial professionals who assisted in concealing and laundering both the bribes received by the corrupt employees and the payments made on the corruption-induced contracts. Defendant Chatburn was an integral part of the scheme.
As discussed below, the following essential facts are indisputable: (i) Petroecuador did not know of the illegal bribery scheme until the publication of the Panama Papers in May 2016; (ii) Petroecuador contacted the Ecuadorian prosecutors and actively participated in and promoted the ensuing criminal investigations and prosecutions, becoming a criminal complainant itself; and (iii) while it lasted, the scheme was successful precisely because it was concealed from Petroecuador and the Ecuadorian authorities, with significant elements of it taking place outside of Ecuador, including in the United States, Panama, and other jurisdictions.
Through his admitted criminal conduct, Chatburn actively promoted, facilitated, and furthered the illegal bribery scheme that proximately caused Petroecuador’s losses. Under the admitted facts of this case, as further detailed below, Petroecuador qualifies as a victim of Chatburn’s criminal conduct under the Mandatory Victims Restitution Act (“MVRA”), 18 U.S.C. §§ 3663 et seq., and the Crime Victims’ Rights Act (“CVRA”), 18 U.S.C. § 3771. As a victim, pursuant to 18 U.S.C. § 3664(h), Petroecuador is entitled to the recognition of its rights, and to joint and several restitution from Chatburn and his convicted co-conspirators for the losses it suffered.”
Interestingly, in the Chatburn action the DOJ alleged that Petroecuador “performed a function that Ecuador treated as its own” and thus was an “instrumentality” of the Ecuadorian government.
However, in the “victim” filing Petroecuador itself states: “Petroecuador is commercially driven and its day-to-day activities are of a private, commercial nature.”