From time to time, there are certain Foreign Corrupt Practices Act enforcement actions in which the core allegations just seem to “keep on giving” and spawn several related enforcement actions.
A prime example were the many FCPA (and related) enforcement actions involving Haiti Teleco from approximately ten years ago (see here) and the many recent enforcement actions concerning Venezuela’s PDVSA.
Enforcement actions concerning Ecuador’s Seguros Sucre S.A. (“Seguros Sucre”), an alleged state-owned insurance company and “instrumentality” of the Ecuadorian government are beginning to add up.
In February 2020, the DOJ criminally charged Juan Ribas Domenech, Jose Vicente Gomez Aviles, and Felipe Moncaleano Botero with money laundering conspiracy. Domench served as the Chairman of Seguros Sucre and as an advisor to the President of Ecuador. Gomez was an owner of a Panama registered company that operated as a reinsurance broker. Moncaleano was an executive and shareholder of the Colombian-based subsidiaries of a U.K. reinsurance broker and risk advisor. In a separate complaint, the DOJ also charged Roberto Heinert with money laundering conspiracy. Heinert was also an owner of the Panama registered company that operated as a reinsurance broker.
In March 2021, the DOJ announced that Ribas was sentenced to 51 months in prison for his role in a scheme to launder bribes paid to him in exchange for helping three U.K. reinsurance companies obtain and retain reinsurance business from Ecuador’s public surety company. As stated in the DOJ release:
“According to court documents, between 2013 and 2017, Ribas was the chairman of Seguros Sucre, Ecuador’s state-owned and -controlled surety company and an advisor to the then-president of Ecuador. In those capacities, Ribas had authority over the awarding of Seguros Sucre business. During that time, Ribas accepted approximately $5,036,465 in bribes from his co-conspirators in exchange for using his official position to allow three U.K.-based reinsurance brokers to obtain and retain contracts with Seguros Sucre. These bribe payments were paid through various intermediaries, including two reinsurance introducer companies. A portion of the bribes were laundered through the United States.”
Gomez was sentenced to 46 months in prison, Moncaleano was sentenced to 72 months, and Heinert was sentenced to 36 months. (See here and here).
As highlighted in this prior post, in March 2022 the DOJ released a so-called “declination with disgorgement” letter in which Jardine Lloyd Thompson Group Holdings Ltd., formerly Jardine Lloyd Thompson Group plc agreed to pay approximately $29 million. According to the DOJ:
“Beginning in 2014 and continuing through 2016, JLT, through its employee and agents, paid approximately $10,800,000 to a Florida-based third-party intermediary that the employee and agents knew would be used, in part, to pay approximately $3,157,000 in bribes to Ecuadorian government officials in order to obtain and retain contracts with Seguros Sucre, the Ecuadorian state-owned and -controlled surety company. Approximately $1.2 million of these bribe payments were laundered through and into bank accounts in the United States.”
Earlier this week, the DOJ announced criminal charges against Esteban Eduardo Merlo Hidalgo, Christian Patricio Pintado Garcia, and Luis Lenin Maldonado Matute.
Merlo is described as an Ecuadorian and U.S. dual citizen residing in Miami who operated and controlled Intermediary Company (a term that collectively refers to two companies that were registered in Panama and Ecuador, operated in Miami, Florida, and acted as intermediaries for reinsurance companies). Merlo is described as a “domestic concern” in FCPA speak.
Maldonado is described as an Ecuadorian citizen and Costa Rica resident and the President of Intermediary Company. Maldonado is described as an agent of a “domestic concern” in FCPA speak.
Pintado is described as an Ecuadorian and Italian dual citizen and resident of Costa Rica and the General Manager of Intermediary Company. Pintado is described as an agent of a “domestic concern” in FCPA speak.
In summary fashion, the indictment alleges that the defendants and others conspired to “unlawfully enrich themselves by bribing Ecuadorian officials to obtain and retain business from Ecuadorian entities and instrumentalities controlled by the Ecuadorian government for themselves and others.”
According to the indictment, bribes were paid, directly or indirectly, “to a for the benefit of foreign officials in Ecuador, including Ribas (described as a citizen of Ecuador who served as the Chairman of Seguros Sucre and Rocafuerte [another alleged state-owned insurance company in Ecaudor] as well as an advisor to a then high ranking executive branch official in the Ecuadorian government), Foreign Official 1 (a citizen of Ecuador who served as an official of Seguros Sucre), Foreign Official 2 (a citizen of Ecuador who served as an official of Seguros Sucre), and Foreign Official 3 (an individual who served as an official of Seguros Sucre), to secure their assistance in awarding business to Intermediary Company, Reinsurance Broker 1 (a company based in the United Kingdom), and Reinsurance Broker 2 (a company based in the United Kingdom).”
According to the indictment, the defendants used Intermediary Company, and bank accounts controlled by the defendants and others in the U.S., Switzerland, Panama, and elsewhere to “promote the illegal bribery scheme and to conceal the nature and purpose of the illegal bribery scheme” by, among other things, using false contracts that described services that were not provided.
The indictment charges conspiracy to violate the FCPA’s anti-bribery provisions, a substantive violation of the FCPA’s anti-bribery provisions, conspiracy to commit money laundering, and four counts of engaging in transactions in criminally derived property.