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.
As alleged in the Cherrez criminal complaint:
“Cherrez and the U.S. Investment Fund Companies he controlled paid more than approximately $2.6 million to ISSPOL officials – including approximately $1,397,066 for the benefit of ISSPOL Official 1 [Luzuriaga] – in exchange for ISSPOL Official 1 and the other ISSPOL officials using their official positions to assist the U.S. Investment Fund Companies, Cherrez, and others to obtain and retain business for Cherrez … and others in violation of the FCPA and Ecuador’s law against bribery of a public official.”
“In order to conceal and disguise the proceeds of the bribery scheme and with the intent to promote the carrying on of the bribery scheme, Cherrez and ISSPOL Official 1, together with others, among other things, caused bribery proceeds to be laundered through bank accounts in the United States for the benefit of ISSPOL Official 1 and others, in violation of U.S. money laundering laws.”
According to the complaint, Cherrez Mino directed payments to ISSPOL Official 1 in at least three ways:
“(1) payments of approximately $419,226 made by check payable to ISSPOL Official 1; (2) payments of approximately $663,000 made to relatives of ISSPOL Official 1 for his benefit; and (3) payments to a U.S. based bank account in the name of the U.S. Investment Fund Companies and for which Cherrez held signatory authority but for which ISSPOL Official held a debit card in his name that he used for purchases and cash withdrawals of approximately $313,840.”
The criminal complaint references a text message from ISSPOL Official 1 to Cherrez stating “Thank you for fixing my financial life and that of my family.”
The complaint further references that “while physically located” in Florida “Cherrez sent text messages to ISSPOL Official 1 requesting information regarding ISSPOL investments and whether the money had been credited.”
According to the complaint, Cherrez also “caused U.S. Investment Fund Companies to transfer approximately $114,164 to an individual who appears to be a third ISSPOL official and who who was the daughter of a senior official at ISSPOL who approved ISSPOL’s investments with Cherrez’s companies” and also “caused U.S. Investment Fund Companies to transfer approximately $315,513 for the benefit of a fourth ISSPOL official who had influence over ISSPOl’s investment decisions.”
Even though the criminal complaint alleges that there is probable cause that Cherrez violated the FCPA’s anti-bribery provisions, the criminal complaint only charges money laundering offenses.
As alleged in the Luzuriaga criminal complaint:
“While acting as the ISSPOL Risk Director and sitting on ISSPOL’s Investment Committee, [Luzuriaga] received bribes totaling at least approximately $1,397,066 from the U.S. Investment Fund Companies controlled by [Cherrez], in exchange for using his official position to assist the U.S. Investment Fund Companies, [Cherrez] … and others in violation of the FCPA and Ecuador’s law against bribery of a public official.
In order to conceal and disguise the proceeds of the bribery scheme and with the intent to promote the carrying on of the bribery scheme, Luzuriaga and Cherrez, together with others, among other things, caused bribery proceeds to be laundered through bank accounts in the United States for the benefit of Luzuriaga and others, in violation of U.S. money laundering laws.”
See here for additional coverage of the criminal charges. See here for more on Jorge Cherrez Mino and his various companies.
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