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Former Gunvor Employee Pleads Guilty In Connection With Ecuador Bribery Scheme

gunvor

Recently 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.

Similar to the DOJ’s recent money laundering charges against Jorge Cherrez Mino and John Robert Luzuriaga Aguinaga in connection with a bribery scheme in Ecuador (see here for the prior post), the DOJ’s allegations against Kohut provide a jurisdictional basis for FCPA anti-bribery offenses, yet the information “only” charges money laundering offenses.

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Vitol Resolves Net $90 Million FCPA Enforcement Action For Conduct In Brazil, Ecuador And Mexico

vitol

Last week the DOJ announced that Vitol Inc., the U.S. affiliate of the Vitol group of companies, which together form one of the largest energy trading companies in the world, agreed to resolve a net $90 million FCPA enforcement action for conduct in Brazil, Ecuador and Mexico.

As noted in the DOJ release (and as will be explored in a future post) “Vitol has also agreed to disgorge more than $12.7 million to the Commodity Futures Trading Commission (CFTC) in a related matter and to pay the CFTC a penalty of $16 million related to trading activity not covered” by the DOJ enforcement action.

Under the heading “The Brazil Bribery Scheme” this criminal information alleges:

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FCPA Enforcement Actions Regarding Conduct In Ecuador

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 FCPA enforcement actions regarding conduct (in whole or in part) in Ecuador.

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DOJ Announces Indictment Of Oil Trader In Connection With Alleged Ecuador Bribery Scheme

oil trading

Yesterday, the DOJ announced that Javier Aguilar (described as a trader at the U.S. subsidiary of a multinational oil distributor and trading company – “Trading Company) was criminally charged for “his alleged participation in a five-year international bribery and money laundering scheme involving corrupt payments to Ecuadorian officials.” According to this report, Aguilar’s former employer is Vitol Inc. As highlighted in this previous post, Vitol has reportedly been under scrutiny.

Although not mentioned in the indictment, the DOJ releases references an “original complaint” and that the Ecuadorian officials included individuals associated with PetroEcuador (a business organization previously mentioned in FCPA enforcement actions – see here and here).

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Strict Liability For Subsidiary Conduct

oilstates

[This post is part of a periodic series regarding “old” FCPA enforcement actions]

Issuer strict liability for subsidiary conduct is a dubious prong of Foreign Corrupt Practices Act enforcement. However, as highlighted in this post concerning a 2006 enforcement action against Oil States International, it has long been an aspect of FCPA enforcement.

In 2006, the SEC brought this administrative action against Oil States International (a specialty provider to oil and gas drilling companies). The conduct at issue was based entirely on the actions of employees of a branch office in Eastern Venezuela of Hydraulic Well Control LLC, a subsidiary of Oil States. According to the SEC, HWC Venezuela contributed approximately 1% of Oil States’ consolidated revenues during the relevant time period.

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