Insight On The Pintado Matter
This post is from Andrew Feldman (Feldman Firm PLLC).
Since President Trump issued the Executive Orders “pausing” the enforcement of the FCPA, lots of large law firms decried the potential end of the FCPA and worried that there would be a steep decline in FCPA investigations and prosecutions. Attorney General Pam Bondi had also emphasized that the FCPA should be used to prosecute narcotraffickers, not foreign nationals engaged in extraterritorial conduct which poses no threat to American interests.
In mid-March of this year and in the heart of this FCPA pause panic, the government travelled to Costa Rica to extradite the Firm’s client, Cristian Patricio Pintado Garcia. Mr. Pintado is an Ecuadorian national with no status in the United States who had been indicted in 2022 for violations of the FCPA and money laundering. Mr Pintado had been languishing in a Costa Rican prison since August of last year when he was arrested shortly after traveling from Ecuador.
Individual Pleads Guilty In Connection With Prior FCPA Enforcement Actions Involving Ecuador
This prior post discussed the many FCPA (and related) enforcement actions concerning Ecuador’s Seguros Sucre S.A. (“Seguros Sucre”), an alleged state-owned insurance company and “instrumentality” of the Ecuadorian government.
Among the enforcement actions were criminal charges announced by the DOJ in 2022 against Esteban Eduardo Merlo Hidalgo, Christian Patricio Pintado Garcia, and Luis Lenin Maldonado Matute.
Merlo was 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 was described as a “domestic concern” in FCPA speak.
U.K. Announces Enforcement Action Involving Insurance Sector In Ecuador
As detailed below, in the past approximate five years, there have been several FCPA enforcement actions against companies and individuals involved in the insurance sector in Ecuador.
Tysers Insurance Brokers Limited and H.W. Wood Limited (2023)
As highlighted in this prior post, the DOJ alleged that “Tysers and H.W. Wood were engaged in a conspiracy the purpose of which was for the co-conspirators to enrich themselves by, among other things, corruptly offering bribes to, and for the benefit of Juan Ribas Domenech, Foreign Official 1, Foreign Official 2, and Foreign Official 3, each of whom was a foreign official in Ecuador, within the meaning of the FCPA … to influence the foreign officials and to secure improper advantages in order to obtain or retain reinsurance business from Seguros Sucre and Rocafuerte” (both alleged to be state-owned insurance companies).
The Many FCPA Enforcement Actions Concerning Conduct In Ecuador
Ecuador.
It is on the smaller side of countries in South America in terms of population and land area. However, it has the third largest oil reserves in South America and thus many companies subject to the Foreign Corrupt Practices Act do business in the country.
This post summarizes the many FCPA enforcement actions (and related actions) regarding conduct (in whole or in part) in Ecuador.
As highlighted below, not all of the enforcement actions involve business interactions with PetroEcuador.
Another portion of the Ecuador FCPA enforcement actions involve business interactions with Seguros Sucre and Rocafuerte” (both alleged state-owned insurance companies).
By my count, since 2018, 6 companies and 16 individuals have resolved FCPA (or related) enforcement actions concerning conduct in Ecuador.
Gunvor Resolves Net $474.4 Million FCPA Enforcement Action
In 2021, Raymond Kohut (a Canadian citizen who lived in the Bahamas and worked in business development for Gunvor Group Ltd., a Switzerland based commodities firm) pleaded guilty in connection with an Ecuador bribery scheme. (See here for the prior post).
Last week, the DOJ returned to the same core conduct in announcing a Foreign Corrupt Practices Act enforcement action against Gunvor.
The net FCPA settlement amount was $474.4 million (a $187.3 million criminal fine and a $287.1 million forfeiture amount).