As highlighted in this prior post, in 2017 the DOJ criminally charged Chi Ping Patrick Ho (of Hong Kong, China) and another with conspiring to violate the Foreign Corrupt Practices Act, violating the FCPA, conspiring to commit international money laundering, and committing international money laundering.
Ho was associated with China Energy Fund Committee (CEFC) (a entity fully funded by CEFC Energy Company Limited.
As stated by the DOJ:
“[T]he defendants engaged in two bribery schemes to pay high-level officials of Chad and Uganda in exchange for business advantages for the Energy Company, a Shanghai-headquartered multibillion-dollar conglomerate that operates internationally in the energy and financial sectors. Defendant Ho was the head of a non-governmental organization based in Hong Kong and Virginia (the “Energy NGO”) that holds “Special Consultative Status” with the United Nations (UN) Economic and Social Council. The Energy NGO is funded by the Energy Company.”
As highlighted in this prior post, in late 2018 Ho was found guilty at trial of FCPA and money laundering violations in connection with bribery schemes in Chad and Uganda on behalf of China Energy Fund Committee, an entity funded by CEFC China Energy Company Ltd.
This recent report by the DOJ Office of Inspector General concludes that Charles McGonigal (pictured – a former Federal Bureau of Investigation (FBI) senior official who had served as the Special Agent in Charge (SAC) of Counterintelligence for the FBI’s New York Field Office (FBI NY) engaged in “disgraceful conduct” in connection with the FCPA investigation.
The Report begins with the following introduction and overview.
“This report describes an administrative investigation by the Department of Justice (Department or DOJ) Office of the Inspector General (OIG) following a criminal investigation of Charles McGonigal, a former Federal Bureau of Investigation (FBI) senior official who had served as the Special Agent in Charge (SAC) of Counterintelligence for the FBI’s New York Field Office (FBI NY) from October 2016 until he retired from the FBI in September 2018. In January 2023, the Department unsealed two indictments against McGonigal. In a case prosecuted by the U.S. Attorney’s Office for the District of Columbia (DC USAO), a grand jury charged McGonigal with concealing that he had received $225,000 in cash from an Albanian national with ties to the Albanian government, Person A in the indictment, while McGonigal served as SAC and falsely reporting aspects of his foreign travel and foreign contacts. The indictment further charged McGonigal with failing to disclose his meetings, while serving as SAC, with Person A’s business associate, Person B, who was described in the indictment as a former Albanian senior government official and an employee of a “Chinese energy conglomerate.” In September 2023, McGonigal pled guilty in the U.S. District Court for the District of Columbia (DDC) to concealing that he had received the $225,000 in cash from Person A, in violation of 18 U.S.C. § 1001(a)(1), and concealing the true nature of his relationship with Person A.
In the other indictment, prosecuted by the U.S. Attorney’s Office for the Southern District of New York (SDNY USAO), a grand jury charged McGonigal and an alleged co-conspirator with violating and conspiring to violate the International Emergency Economic Powers Act (IEEPA), money laundering, and conspiring to commit money laundering by providing services to and receiving secret payments from Oleg Deripaska, a sanctioned Russian oligarch, after McGonigal retired from the FBI. The investigation determined that prior to his retirement, and while serving as SAC, McGonigal began building a relationship with Deripaska’s agent in the hopes of doing business with Deripaska after McGonigal retired from the FBI. In August 2023, McGonigal pled guilty in the U.S. District Court for the Southern District of New York (SDNY) to conspiracy to violate IEEPA and to commit money laundering.
In December 2023, McGonigal was sentenced in SDNY to 50 months of incarceration. In February 2024, he was sentenced in DDC to 28 months of incarceration to be served after the 50-month sentence imposed in SDNY.
This report describes the OIG’s administrative investigation of an allegation that McGonigal, while serving as SAC, had obstructed a criminal investigation that he was then supervising by disclosing sensitive, non-public case information about the subjects and targets of the investigation to the foreign national identified as Person B in the DDC indictment and by withholding information relevant to the case from the investigating FBI NY case agents. Specifically, between October 2016 and September 2018, McGonigal oversaw FBI NY’s investigation, conducted jointly with SDNY USAO, of a Chinese-funded think tank called China Energy Fund Committee (CEFC NGO); its parent company, CEFC China Energy Company Limited (CEFC China), a Chinese energy company; Chi Ping Patrick Ho (Ho), an officer of CEFC NGO; and others. The CEFC investigation led to Ho’s arrest in November 2017 on bribery and money laundering charges relating to his efforts at the United Nations in New York City and elsewhere to bribe officials from Chad and Uganda into awarding business contracts to CEFC China. At the time of Ho’s arrest, FBI NY also intended to seek a search warrant to seize specified items in the possession of another individual of interest in the investigation, an IsraeliAmerican (Target 3), but Target 3, who had been overseas, did not return to the United States when expected. In December 2018, Ho was convicted and subsequently sentenced to serve 3 years in prison. Target 3 never returned to the United States.
After Ho’s conviction, FBI NY continued to investigate Target 3’s activities. On March 28 and 29, 2019, at Target 3’s initiation, Target 3 met with the FBI in Belgium pursuant to a proffer agreement with the SDNY USAO and among the information he provided to investigators was information that, in the summer of 2017, the Chairman of CEFC China had obtained nearly, but not completely, accurate information about FBI NY and SDNY USAO’s CEFC investigation, including that U.S. authorities had intentions to arrest Ho and others, including possibly Target 3. Target 3 told the FBI and SDNY USAO prosecutors that he believed the source of the Chairman’s information was someone within the U.S. government. This information was confidential to law enforcement and should not have been shared with anyone outside the limited number of government personnel authorized to have the information. After a lengthy investigation, in November 2022, Target 3 was indicted by a grand jury in the SDNY and charged with being an unregistered agent of China, brokering illicit weapons deals, violating U.S. sanctions against Iran, and making false statements to the FBI in his March 2019 proffer interview.
In December 2021, Person B in McGonigal’s DDC indictment met with FBI agents and, in October 2022, met with FBI agents and SDNY USAO prosecutors and told them that on multiple occasions before Ho’s arrest, McGonigal leaked confidential information about the CEFC investigation to Person B, which Person B thereafter provided to Ho and the CEFC China Chairman. In October and November 2022, SDNY USAO and FBI NY considered charging McGonigal with obstruction of justice for both the disclosure of confidential government information to Person B, as well as for failing to disclose to the case agents information McGonigal learned from Person B that was relevant to the CEFC investigation. Ultimately, following an evaluation of the available evidence at that time, SDNY USAO did not charge McGonigal for obstruction of justice for his conduct relating to the CEFC investigative information.
On November 17, 2023, while awaiting sentencing by SDNY and DDC, McGonigal agreed to provide a proffer to the OIG, FBI, and DC USAO regarding, among other things, his activities with Person B and CEFC. As described in this report, McGonigal acknowledged during the proffer interview that he shared information with Person B about the CEFC investigation and anticipated arrests arising from it.
In this report, we describe the evidence obtained during the FBI NY and SDNY USAO investigation of the CEFC leak, as well as additional information the OIG obtained from the two FBI NY case agents (Case Agent 1 and Case Agent 2) and their supervisor (Supervisory Special Agent) who conducted the CEFC investigation (FBI case team), and statements and acknowledgements McGonigal made to the OIG, FBI, and DC USAO during his November 17, 2023 proffer interview. After describing this evidence, we provide our findings and analysis.”
The Report contains the following “Summary of Findings.”
“[T]he OIG determined that McGonigal, while he served as the SAC entrusted with overseeing FBI NY’s Counterintelligence Program, engaged in a scheme that obstructed an important multiyear criminal investigation under his supervision and compromised the integrity of the FBI. Specifically, the evidence demonstrates that for his own personal gain, McGonigal cultivated a secret, ongoing personal and business relationship with Person B, a close associate of subjects and targets of the CEFC investigation, and leaked sensitive non-public information about the CEFC investigation to Person B, including the existence of the investigation and the anticipated arrests of multiple individuals with ties to CEFC.
The impact of McGonigal’s leaks on the CEFC investigation was substantial. Person B shared the information with at least two investigative targets, Ho and the CEFC China Chairman, which led the Chairman to warn Ho and Target 3 that U.S. authorities planned to arrest Ho, two other Chinese nationals, and possibly a Jewish person associated with CEFC, which Target 3 believed was potentially a reference to him. Based on the evidence described in this report, we concluded that the Chairman’s warning played at least some role in Target 3’s decision not to return to the United States when expected in November 201 7. Because Target 3 did not return when expected, the FBI case team did not seek a search warrant for his residence or cell phone, as they planned to do, which presented a missed opportunity to gather evidence in a significant criminal investigation.
As described in this report, Ho also debated whether to return to the United States in November 2017 after the Chairman’s warning-which, again, was based on McGonigal’s leaks to Person B-but Ho ultimately decided to return on November 18, 2017, and was arrested. Although Ho was arrested, the leaked information from McGonigal provided Ho a warning and an opportunity to assess his circumstances, and absent a faulty assurance Ho likely received that it was safe for him to return to the United States, could have resulted in further significant obstruction of the FBI and SDNY USAO’s CEFC investigation.
In addition, the evidence demonstrates that McGonigal impeded the CEFC investigation by failing to inform his FBI case team about his ongoing contacts with Person B [Redacted].
As a high-ranking FBI official entrusted with overseeing sensitive counterintelligence and criminal matters, McGonigal’s actions were extraordinary and fell far short of the FBI’s core values of integrity, accountability, and leadership expected of all FBI personnel. [W]e concluded that McGonigal (1) engaged in disgraceful conduct at the expense of a multi-year criminal investigation and undermined the FBI’s integrity and reliability in violation of FBI Offense Code 1.7; (2) deliberately disregarded his supervisory responsibilities in violation of FBI Offense Code 5.2; and (3) misused sensitive, non-public case information for his own private interest and that of another in violation of 5 C.F.R. § 2635.703 of the Standards of Ethical Conduct, FBI Offense Code 2.12, and FBI policies.”
