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Who Needs FEPA?

shrug

As long as political actors have existed, political actors have taken credit for filling a perceived legal gap by enacting new laws.

Time will tell of course, but query whether the recently enacted Foreign Extortion Prevention Act (FEPA) (a law which seeks to capture the so-called “demand” side of foreign bribery) was even needed.

As has been discussed on these pages over the last several years when various versions of FEPA were introduced in Congress, the Department of Justice already has several criminal statutes available to prosecute alleged “foreign officials” who receive bribes and has been prosecuting such cases for a long time.

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Colombian Entities Resolve Net $60.6 Million FCPA Enforcement Action

Corfi

Once upon a time, a Colombian company (owned and controlled by another Colombian company with shares registered in the U.S.), through a wholly-owned and controlled subsidiary, agreed with a Brazilian company to form a joint venture and consortium to bid for public contracts with the Colombian government.

An executive of the Brazilian company informed an executive of the Colombian company that a Colombian lobbyist would help win projects by making bribe payments to Colombian officials and the Colombian company executive agreed.

That, in a nutshell, describes last week’s net $60.6 million Foreign Corrupt Practice Act enforcement action against Corporacion Financiera Colombiana S.A. (Corficolombiana) and Grupo Aval Acciones y Valores S.A. (Grupo Aval).

The enforcement action involved a DOJ component (in which the entities agreed to pay a net $20.3 million criminal penalty) and an SEC component (in which the entities agreed to pay approximately $40.3 million in disgorgement and prejudgment interest).

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Martinelli Brothers Sentenced To Prison In Connection With Odebrecht Bribery Scheme

Prison

As highlighted here, in November 2021 announced the unsealing of a 2020 criminal complaint against agents associated with Odebrecht in connection with the company’s 2016 FCPA enforcement action (see here for the prior post).

Brothers Luis Enrique Martinelli Linares and Ricardo Alberto Martinelli Linares (both citizens of Panama and Italy and the sons of former Panamanian President Ricardo Martinelli) allegedly “participated in the Odebrecht bribery scheme by, among other things, serving as intermediaries for bribe payments and the provision of other things of value that Odebrecht offered and provided to the Panama Government Official (their father). The complaint alleged that, among other things, the defendants “established offshore bank accounts in the names of offshore shell companies to receive and disguise bribe payments from Odebrecht made for the benefit of the Panama Government Official.

The brothers pleaded guilty and were recently sentenced to 36 months in prison and were ordered to forfeit more than $18.8 million, pay a $250,000 fine, and serve two years’ supervised release. (See here for the DOJ release).

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Friday Roundup

Roundup

Where is the outrage now, Odebrecht related, and for the people. It’s all here in the Friday roundup.

Where Is The Outrage Now?

In 2016 the Obama Justice Department invented another way to resolve an FCPA enforcement action – the so-called “declination” – a form of resolution that sometimes requires disgorgement. In 2016, the DOJ used this way of resolving an FCPA enforcement five times. (See here).

In 2017 the Trump Justice Department used this way of resolving an FCPA enforcement and – all of a sudden – some commentators were outraged. This commentator stated: “bring a matter to the department’s attention, fall all over yourself to help prosecutors understand the case, and show them you cleaned up your act—and presto, you avoid the DPA or monitor …”. The commentator added: “President Trump himself doesn’t seem much interested in enforcing the [FCPA]” (another odd statement because President’s don’t enforce the law.

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DOJ Announces Money Laundering Charges Against Odebrecht Agents In Connection With Bribery Scheme Involving Their Close Relative Panamanian Official

Linares

With increasing frequency the Department of Justice is using money laundering statutes to criminally charge participants in alleged bribery scheme. (See here for the recent post documenting the trend).

In the latest example, yesterday the DOJ announced the unsealing of a June 2020 criminal complaint against agents associated with Odebrecht in connection with the company’s 2016 FCPA enforcement action (see here for the prior post).

According to the complaint, Luis Enrique Martinelli Linares (a citizen of Panama and Italy) and his brother Ricardo Alberto Martinelli Linares (also a citizen of Panama and Italy), both of whom travelled several times to the U.S. during the relevant time period, “participated in the Odebrecht bribery scheme by, among other things, serving as intermediaries for bribe payments and the provision of other things of value that Odebrecht offered and provided to the Panama Government Official. According to the complaint, both defendants “were close relatives” of the Panama Government Official.

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