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DOJ Announces Individual FCPA And Related Enforcement Action In Connection With Aruba Telecom Scheme

It’s not every day that the DOJ announces a Foreign Corrupt Practices Act enforcement casually in a press release about another enforcement action, but that is what the DOJ did today in this release [1] announcing that Egbert Yvan Ferdinand Koolman (a Dutch citizen residing in Miami, Florida who was an official of Servicio di Telecommunicacion di Aruba N.V. (Setar), an instrumentality of the Aruban government) pleaded guilty to one count of conspiracy to commit money laundering involving FCPA violations.

The release further states: “in connection with the scheme, Lawrence W. Parker, Jr., 42, of Miami, pleaded guilty on Dec. 28, 2017 to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and to commit wire fraud.  Parker’s sentencing is scheduled for April 30.”

This post summarizes the original source documents in the Parker enforcement action.

According to this criminal information [2], Parker was an owner, in whole or in part, or otherwise a controlling member or participant in various Florida phone companies and he and his co-conspirators made “corrupt bribe payments to Foreign Official A [Koolman – described as a Product Manager at Setar whose job responsibilities included interacting with vendors and purchasing mobile phone and accessories for Setar] in order to obtain and retain contracts with Setar and defraud Setar of money and property.

Setar is described as “a state-owned telecommunication provider in Aruba, a constituent country of the Kingdom of the Netherlands, that was controlled by the government of Aruba and performed a function that Aruba treated as its own, and was thus an instrumentality of the Aruban government.

[3]

According to this factual proffer [4], the scheme worked as follows:

“Foreign Official A, on behalf of Setar, requested price quotations on certain mobile phones and accessories from Parker and others. In addition, on occasion, Foreign Official A , without the knowledge of, or approval from his employer Setar, provided Parker and his co-conspirators with proprietary, confidential business information via email. After receiving price quotations from companies affiliated with Parker … and others, Foreign Officials A used his position and authority as Setar’s Product Manager to assist Parker … and others with obtaining business from Setar. Foreign Official A did not inform Setar that he was accepting bribe payments from Parker and others in connection with these sales. As a result of the scheme, between in or around November 2005 and in or around March 2015, Parker, Foreign Official A, and others caused Setar to wire more than $23.8 million from bank accounts in Aruba to the United States-based bank accounts [of the various phone companies}.

Between in or around November 2005 and in or around March 2015, Parker and his co-conspirators paid Foreign Official approximately $705,000. Of this total, approximately $288,970 was wired from bank accounts in the Southern District of Foreign to a foreign bank account owned and controlled by Foreign Official A .

[…]

Additional payments were made in cash to Foreign Official A and to his former spouse during meetings in Miami, Florida and in Aruba. For example, on or about July 10, 2014, Parker caused a check to be drafted from the Florida-based account [of one of the phone companies] in the amount of approximately $5,200 and made payable to Parker, which amount Parker later caused to be provided to Foreign Official A in cash in the Southern District of Florida.

In addition, in or around December 2013, Parker provided to Foreign Official A, during a meeting in the Southern District of Florida, a debit card linked to a United States bank account. Foreign Official A returned to Aruba with the debit card and used it to withdraw cash derived from the bribery and fraud scheme. Between approximately December 2013 and October 2014, Foreign Official A received approximately $19,745 in this manner.

Parker knew that agreeing to pay, and paying, bribes to Foreign Official A , receiving Setar’s confidential business information from Foreign Official, and concealing the bribe payments from Setar was wrong and unlawful.”

In a request for a downward departure, the DOJ states that Parker “has cooperated with the government’s investigation since he was first approached by agents of the Federal Bureau of Investigation” and recommends that his sentenced “be reduced by 33 percent from the low end of the Guidelines range.”

As noted in the DOJ’s release:

“Koolman pleaded guilty … to one count of conspiracy to commit money laundering.  He is scheduled to be sentenced on June 27.

According to admissions made as part of his plea agreement, between 2005 and 2016, Koolman operated a money laundering conspiracy from his position as Setar’s product manager.  Koolman admitted that, as part of the scheme, he conspired with Parker and others to transmit funds from Florida and elsewhere in the United States to Aruba and Panama with the intent to promote a wire fraud scheme and a corrupt scheme that violated the FCPA.  Koolman was promised and received bribes from individuals and companies located in the United States and abroad in exchange for using his position at Setar to award lucrative mobile phone and accessory contracts, he admitted.  He received the corrupt payments via wire transfer from banks located in the United States, in cash during meetings in Miami and in Aruba, and by withdrawing cash in Aruba using a bankcard that drew money from a United States-based bank account, he further admitted.  In exchange for the more than $1.3 million in corrupt payments that he received, Koolman also admitted providing favored vendors with Setar’s confidential information.”

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