- FCPA Professor - http://fcpaprofessor.com -

Stiffed By Co-Conspirators, Individual Cooperates With Government And The End Result Is Yet Another FCPA Enforcement Action Concerning Conduct In Venezuela

Earlier this week, the DOJ announced [1] yet another Foreign Corrupt Practices Act and related enforcement action concerning conduct in Venezuela.

Jesus Ramon Veroes and Luis Alberto Chacin Haddad were each charged and plead guilty to conspiracy to violate the FCPA’s anti-bribery provisions in connection with obtaining various contracts with Corporacion Electric Nacional S.A. (Corpoelec), Venezuela’s state-owned electric company.

In the resolution documents, Veroes is described as a Venezuelan citizen whose close relative is the President of NV Oriental Trading Corporation (a company based in Doral, Florida) and Chacin is described as a Venezuelan citizen and resident of the U.S. who owns and manages businesses in Miami including Search Trading LLC and Headline LLC (companies that purchase goods from around the world for export to Central and South America).

The originating criminal complaint contains an affidavit from a Special Agent of the Internal Revenue Service Criminal Investigations Unit describing a Confidential Witness who engaged in various business ventures with Chacin and occupied office suites next to each other in a building in Doral Florida.

As stated in the Affidavit:

“The Cooperating Witness has been providing information with the DEA for 16 months. He/she is motivated to provide information because the coconspirators did not provide the promised payments. The information provided by the CW has been corroborated through an audio recording, bank statements, e-mails, chats, invoices, and documentary evidence. Throughout his/her cooperation, the CW has appeared to be truthful and trustworthy.”

According to the information, Veroes, Chacin and others made corrupt payments to officials at Corpoelec in order to obtain and retain contracts from Corpoelec and to supply Corpoelec with equipment. In terms of a U.S. nexus, the information alleges various meetings in the S.D. of Florida as well as financial transactions into and out of U.S. based bank accounts.

The information alleges that after Chacin and a co-conspirator failed to obtain contracts from Corpoelec based on competitive bids, Veroes told Chacin that he “had a longstanding personal relationship with Foreign Official 1 (described as a high-level official in Venezuela’s Ministry of Electrical Energy and at Corpoelec) and that Chacin gave Veroes “a proposal to supply Corpoelec with transformers, generators, and forklifts” which Veroes agreed to raise with Foreign Official 1.

Thereafter, the information alleges that Veroes was subsequently directed to work with Foreign Official 2 (described as a high-level official in procurement at Corpoelec who worked under Foreign Official 1) to finalize the contracts for transformers, generators and forklifts. According to the information, defendants understood that “they would need to give some profits from the contracts to Foreign Official 2 in order to get the contracts granted” and that the defendants further “understood that the purpose of the payments to Foreign Official 2 was to obtain business and secure an improper advantage with Corpoelec” and that defendants “believed that a portion of the payments to Foreign Official 2 would go to Foreign Official 1.”

[2]

The information then highlights the following contracts: (i) a 2016 contract to provide forklifts for approximately $6.4 million; (ii) a 2016 contract to provide transformers for approximately $9.8 million; (iii) a 2016 contract to provide generators for approximately $900,000. The information further alleges that the defendants were awarded additional contracts including a contract to supply lightbulbs for approximately $5.8 million and contract to provide street lightbulbs for approximately $35 million.

As noted in the DOJ’s release, under the terms of their plea agreements “Veroes and Chacin will each be required to forfeit at least $5.5 million in profits from the corruptly obtained contracts, as well as real property in Miami.”

According to the DOJ’s release, the alleged “foreign officials” Luis Alfredo Motta Dominguez and Eustiquio Jose Lugo Gomez were criminally charged in an eight-count indictment with various money laundering offenses.

Elevate Your FCPA Research

There are several subject matter tags in this post. However, only subscribers to FCPA Professor's premium search feature can see and use them in research. Efficient and cost-effective FCPA research is just a click away.

Elevate Your Research [3]