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In Connection With 2019 Ericsson Enforcement Action, DOJ Criminally Charges Former Ericsson Employee

Bereket

As highlighted in this prior post, in late 2019 Swedish telecom company Ericsson (a company with American Depositary Shares traded in the U.S.) resolved a $1.06 billion net FCPA enforcement action concerning conduct in Djibouti, China, Vietnam, Kuwait, Indonesia, and Saudi Arabia.

Regarding Djibouti, the enforcement action alleged that Ericsson (through certain subsidiaries and agents) provided approximately $2,100,000 in bribe payments to, and for the benefit of, foreign officials in Djibouti, including a high-ranking government official in the executive branch of the Djibouti government who had influence over decisions made by a state-owned telecommunications company and the CEO of the state-owned telecom company, in order to secure an improper advantage in order to obtain and retain business with the Telecom Company and to win a contract valued at approximately €20,300,000 with the Telecom Company.”

In connection with this prong of the Ericsson enforcement action, the DOJ announced yesterday that Afework “Affe” Bereket (pictured – a dual citizen of Ethiopia and Sweden) was criminally charged with one count of conspiracy to violate the FCPA’s anti-bribery provisions and one count of conspiracy to commit money laundering “for his alleged role in a scheme to pay approximately $2.1 million in bribes to high-level government officials in the Republic of Djibouti and conspiring to launder funds to promote the scheme.”

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US v. Bescond Addresses “Fugitive Disentitlement”: Potential Game Changer For Foreign-Based Defendants Facing US Charges

Judicial Decision

A guest post from DLA Piper attorneys John Hillebrecht, Jessica Masella, Olivia Tourgee and Jennifer Delasco.

In recent years, US prosecutors have increasingly pushed the envelope in bringing criminal charges against non-US professionals who live and work abroad and who may have never set foot in the United States, including for alleged violations of the Foreign Corrupt Practices Act, trade sanctions, the antitrust laws, and other statutes and regulations with extraterritorial implications.

Typically, pursuant to the fugitive disentitlement doctrine, these non-US citizens have not been allowed to challenge such charges unless and until they physically surrender to authorities in the US.

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Stimler Enforcement Action – The Consequential E-Mail

emailsend

Yesterday’s post highlighted the Foreign Corrupt Practices Act (and related) enforcement action against Anthony Stimler (a U.K. citizen and resident who was a trader at Glencore (a commodities company incorporated in the United Kingdom and headquartered in Switzerland).

The FCPA anti-bribery charge against Stimler invoked the so-called 78dd-3 prong of the statute which has the most demanding jurisdictional hook.

Specifically, “while in the territory of the United States, corruptly to make use of the mails or any means or instrumentality of interstate commerce or to do any other act in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to” a foreign official.

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Former Glencore Trader Pleads Guilty To FCPA And Related Offense

glencore

As highlighted in this prior post, for approximately two years Glencore (a commodities company incorporated in the United Kingdom and headquartered in Switzerland with common stock that trades on the New York based over-the-counter market) has been under scrutiny for conduct in Nigeria, the Democratic Republic of Congo, and Venezuela (as well as perhaps other countries).

Earlier this week Anthony Stimler pleaded guilty to FCPA and money laundering offenses. Stimler is described as a United Kingdom citizen and resident who was a trader at a Glencore subsidiary who worked on the West Africa desk from in or around 2002 until in or around 2009 and then again from in or around June 2011 until in or around August 2019. According to the DOJ “In that role, Stimler had responsibility for crude oil purchases from, among other places, Nigeria, and acted on behalf of Company 1 [Glencore] in procuring crude oil from Nigeria.”

In summary fashion, the criminal information alleges:

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Second Circuit Affirms Ho’s FCPA And Related Convictions

Ho

As described in this prior post, in late 2018 Chi Ping Patrick Ho was found guilty at trial of Foreign Corrupt Practices Ac and money laundering violations in connection with alleged bribery schemes in Chad and Uganda on behalf of China Energy Fund Committee, an entity funded by CEFC China Energy Company Ltd.

This prior post outlined Ho’s arguments on appeal and the FCPA specific issues were presented as follows:  (1) “Whether the government, which repeatedly argued that Ho paid bribes on behalf of a Chinese company, presented legally sufficient evidence that he acted on behalf of a “domestic concern,” as required for a conviction under 15 U.S.C. § 78dd-2;” and (2) “Whether a defendant may be prosecuted for violating § 78dd-3 where (a) the grand jury determined that he was a “domestic concern,” but § 78dd-3 expressly does not apply to domestic concerns, and (b) the defendant was also indicted for violating § 78dd-2, but §§ 78dd-2 and 78dd-3 are mutually exclusive.”

In this recent decision, the Second Circuit rejected each of Ho’s challenges and affirmed his convictions.

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