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.
The complaint alleges 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 complaint further alleges:
“In furtherance of the bribery scheme, from approximately August 2009 to January 2014, the defendants, together with others, took a number of steps to open and manage secret bank accounts held in the names of shell companies in foreign jurisdictions, which were used to receive, further transfer and deliver bribe payments that Odebrecht made and caused to be made for the benefit of the Panama Government Official. Specifically, [the defendants] established shell companies in foreign jurisdictions; served as the signatories on certain of the shell company bank accounts; and personally sent and caused to be sent wire transfers through the structure of shell company bank accounts to conceal and spend bribery proceeds.
In or about and between 2009 and 2012, the defendants opened bank accounts in Switzerland for the purpose of receiving, further transferring and delivering bribe payments from Odebrecht for the benefit of the Panama Government Official in the name of Offshore Company A at Bank 1, Offshore Company B at Bank 2, Offshore Company C at Bank 3, Offshore Company D at Bank 4, and Offshore Company E, Offshore Company F, Offshore Company G and Offshore Company H, all at Bank 5 (together the “Offshore Company Accounts”).
The purpose of opening and operating the Offshore Company Accounts was to promote, assist, facilitate, conceal and serve as intermediaries for Odebrecht’s payment of bribes for the benefit of the Panama Government Official so that Odebrecht could obtain an improper business advantage and gain and retain business in Panama by causing the Panama Government Official to perform acts proper to his/her position in his/her official capacity and in violation of his/her obligations.
In total, in or about and between 2009 and 2012, the Offshore Company Accounts received approximately $28 million in bribe proceeds from Odebrecht for the benefit of the Panama Government Official. At least approximately $19 million of those bribe proceeds were transferred through U.S. correspondent bank accounts, including Correspondent Bank 1 and Correspondent Bank 2 in New York, New York, into the Offshore Company Accounts.
For example, financial records show that on or about July 27, 2010, a wire transfer of approximately $350,000 U.S. dollars were transferred from an offshore shell company bank account controlled by Odebrecht and located in Portugal to the Offshore Company A account at Bank 1, through an account at Correspondent Bank 1 in New York, New York.
The defendants later conducted numerous additional financial transactions through U.S. banks, some of which were located in New York, New York, involving the proceeds of bribe payments from Odebrecht.
For example, financial records show that on or about November 12, 2013, the defendants caused the transfer of approximately $899,978.32 U.S. dollars from the Offshore Company A account at Bank 1 to the Offshore Company E account at Bank 5, through an account at Correspondent Bank 3 in New York, New York.”
As stated in the DOJ release:
“The defendants were initially charged by criminal complaint on June 27, 2020. Pursuant to a provisional arrest request from the United States, they were arrested at el Aeropuerto Internacional la Aurora in Guatemala on July 6, 2020, as they were attempting to depart Guatemala on a private plane. On February 4, 2021, Luis Martinelli Linares and Ricardo Martinelli Linares were charged in a five-count indictment, which charged both defendants with one count of conspiracy to commit money laundering and two counts of concealment money laundering; Luis Martinelli Linares was also charged with two counts of engaging in transactions in criminally derived property.
On May 17, 2021, after several preliminary appeals were dismissed, the Guatemalan Fifth Criminal Sentencing Court granted the request by the United States to extradite Luis Martinelli Linares. On June 21, 2021, the Guatemalan Court of Appeals, Criminal Branch affirmed the ruling of the Guatemalan criminal court granting extradition. On October 15, 2021, the Guatemalan Ministry of Foreign Affairs notified the United States, via diplomatic note, that the extradition was final and Luis Martinelli Linares was ready for surrender to the United States, resulting in his arrival in the United States earlier today. The United States has also requested to extradite Ricardo Martinelli Linares, and those proceedings are ongoing.”
In the DOJ release, Breon Peace (United States Attorney for the Eastern District of New York) stated:
“The extradition of Luis Martinelli Linares to the Eastern District of New York is a significant first step in holding him accountable for allegedly laundering millions of dollars in bribe payments through bank accounts in New York and elsewhere. Combatting bribery and money laundering by extraditing and prosecuting corrupt foreign actors like Martinelli is a priority of the Department of Justice.”
Kenneth Polite Jr. (Assistant Attorney General of the Justice Department’s Criminal Division) stated:
“The successful extradition of Luis Martinelli Linares demonstrates the department’s commitment to work with our international partners to pursue, capture and extradite those who use the U.S. financial system to further their corrupt schemes and launder illicit funds. Thanks to the efforts of our law enforcement partners in Guatemala, Luis Martinelli Linares will be held accountable in the United States for his alleged crimes.”
Michael J. Driscoll (Assistant Director-in-Charge of the Federal Bureau of Investigation, New York Field Office) stated:
“Anyone who facilitates bribe payments to government officials contributes to national security risks, whether overtly or inadvertently, and interrupts the free market system of international trade. The FBI will use all available resources to put an end to this type of corrupt behavior.”
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