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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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Friday Roundup

Roundup

A strange scenario, scrutiny alert, and Odebrecht related. It’s all here in the Friday roundup.

A Strange Scenario

FCPA enforcement actions have concerned some interesting family relationships. Husband/Wife as co-defendants. Brother/Sister as co-defendants. Father/Son as co-defendants.

But a wife bribing a husband? To my knowledge, this has never occurred in an FCPA enforcement action.

Until, that is … this week’s FCPA (and related) enforcement action against various individuals in relation to Griffiths Energy International’s bribery scheme involving Chad. (See here for the prior post).

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Former Braskem CEO Grubisich Pleads Guilty

grubisich

As highlighted in this prior post, in late 2016 the DOJ and SEC brought a Foreign Corrupt Practices Act enforcement action against Odebrecht S.A. (a Brazilian holding company) and Braskem S.A. (a Brazil-based petrochemical company with shares traded on the NYSE in which Odebrecht owned a majority of voting shares).

The conduct at issue was egregious and largely centered on a business unit, the Division of Structured Operations, housed within an Odebrecht subsidiary that allegedly served as little more than a bribe-paying department for the benefit of Odebrecht and Braskem. According to the resolution documents, former senior executives authorized approximately $788 million in bribes, largely through the Division of Structured Operations, to alleged foreign officials in at least twelve countries. While the principal focus of the DOJ’s action (and the exclusive focus of the SEC action) concerned conduct in Brazil including the companies relationships with Petrobras, the DOJ action also alleges improper payments in Angola, Argentina, Brazil, Colombia, Dominican Republic, Ecuador, Guatemala, Mexico, Mozambique, Panama, Peru, and Venezuela.

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