DOJ Announces Individual Criminal Charges In Connection With Ecuador Bribery Scheme
Yesterday, the DOJ announced criminal charges against Jorge Cherrez Mino (pictured) and John Robert Luzuriaga Aguinaga in connection with a bribery scheme in Ecuador.
According to this criminal complaint, Cherrez (a citizen of Ecuador who is currently located in Mexico) served as the manager, president, and director of the “U.S. Investment Fund Companies” (a domestic concern under the FCPA).
According to this separate criminal complaint, Luzuriaga (a citizen of Ecuador who is currently located in Florida) served as the Risk Director for Instituto de Seguridad Social de la Policia Nacional (“ISSPOL” – an Ecuadorian public institution responsible for managing the financial contributions by Ecuadorian police officers toward their social security). The complaint alleges that “ISSPOL was controlled by the government of Ecuador and performed a function that Ecuador treated as its own, and was an ‘instrumentality’ of the Ecuadorian government.”)
Even though the Cherrez complaint provides a jurisdictional basis for FCPA anti-bribery offenses and indeed alleges that Cherrez violated the FCPA, the Cherrez and Luzuriaga complaints charge money laundering offenses.
DOJ Individual Actions: The Strange Public – Private Divide
This recent post highlighted certain facts and figures regarding the DOJ’s prosecution of individuals for Foreign Corrupt Practices Act offenses in 2020 and historically.
As highlighted in the prior post, DOJ FCPA individual enforcement actions are significantly skewed by a small handful of enforcement actions and the reality is, despite the DOJ’s rhetoric, approximately 75% of DOJ corporate enforcement actions since 2006 have not (at least yet) resulted in any related DOJ FCPA charges against company employees.
Another very interesting and significant picture emerges when analyzing actual DOJ individual FCPA prosecutions based on whether the individual charged was employed by or otherwise associated with an issuer or a private business organization.
A Focus On DOJ Individual Actions
This recent post focused on SEC individual FCPA actions in 2020 and historically. Today’s post highlights various facts and figures regarding the DOJ’s prosecution of individuals for Foreign Corrupt Practices Act offenses in 2020 and historically.
The key word above is FCPA offenses.
Some in the FCPA space include enforcement actions containing non-FCPA charges (often money laundering charges against alleged “foreign officials”) related to an FCPA enforcement action as an individual FCPA enforcement action. While it is fine to track such enforcement actions, calling them FCPA enforcement actions is factually false.
Compared to corporate FCPA enforcement actions, tracking individual FCPA enforcement actions is often more difficult because the DOJ does not publicly announce every individual enforcement action and/or certain matters are filed under seal.
Father – Son Charged With FCPA Conspiracy In Connection With Sargeant Marine Action
Some Foreign Corrupt Practices Act enforcement actions slip through the cracks.
The mid-December 2020 enforcement action against Jorge Luz and his son Bruno Luz in connection with the Sargeant Marine enforcement action (see here and here for prior posts) appears to be one such action as the DOJ never issued a press release and the actions are not even mentioned on the DOJ’s FCPA website.
The Sargeant Marine enforcement action concerned conduct in Brazil, Venezuela and Ecuador and the Luz enforcement action was based on the same core Brazil conduct alleged in the Sargeant Marine (SMI) matter. As highlighted in this prior post, five individuals were previously charged with FCPA offenses in connection with the SMI matter and the Luz enforcement action continues the clustering dynamic often seen in DOJ FCPA individual enforcement actions (that is, most corporate FCPA actions lack related individual charges, yet a few corporate enforcement actions involve 5+ related individual actions).
FCPA Enforcement Action Alleges A Promise To Pay A “Foreign Official” After They Leave Public Office
Yesterday, the DOJ announced that Deck Won Kang pleaded guilty to a criminal information charging him with one count of violating the FCPA’s anti-bribery provisions. As discussed below, the enforcement action involved a rather unique scenario in that Kang allegedly promised things of value to a “foreign official” after the individual left public office.
According to the criminal information, Kang (a U.S. citizen who controlled two closely held companies with principal places of business in New Jersey) engaged in a bribery scheme in which he paid bribes to high-ranking official (“Official 1”) in the Korean Navy and a procurement official for the Defense Acquisition Program Administration (DPA) – a state-owned and state-controlled agency within South Korea’s Ministry of National Defense that was responsible for the procurement of munitions and military equipment and supplies for the Korean Armed Forces.