Some Foreign Corrupt Practices Act enforcement actions slip through the cracks.
The mid-December 2020 enforcement action against Jorge Luz and his son Bruno Luz in connection with the Sargeant Marine enforcement action (see here and here for prior posts) appears to be one such action as the DOJ never issued a press release and the actions are not even mentioned on the DOJ’s FCPA website.
The Sargeant Marine enforcement action concerned conduct in Brazil, Venezuela and Ecuador and the Luz enforcement action was based on the same core Brazil conduct alleged in the Sargeant Marine (SMI) matter. As highlighted in this prior post, five individuals were previously charged with FCPA offenses in connection with the SMI matter and the Luz enforcement action continues the clustering dynamic often seen in DOJ FCPA individual enforcement actions (that is, most corporate FCPA actions lack related individual charges, yet a few corporate enforcement actions involve 5+ related individual actions).
According to separate (yet nearly carbon copy) criminal informations, in furtherance of the bribery scheme:
“Jorge Luz and Bruno Luz created offshore shell companies in the Marshall Islands that entered into fake consulting agreements with the SMI companies. Pursuant to those agreements, the SMI companies paid the shell companies millions of dollars in commissions for phony services. The SMI companies typically paid the shell companies from bank accounts in the United States or Switzerland, and wired the payments to bank accounts controlled by Luz and Bruno Luz in Switzerland. Some of those payments passed through the Eastern District of New York. Luz and Bruno Luz kept some of the commissions for themselves and caused the rest of the corrupt payments to be distributed as bribes to Brazilian officials, including Petrobras Official #1, Petrobras Official #2, Brazilian Politician #1 and Brazilian Politician #2. The bribes were paid both in cash and by wire into, from and through bank accounts located in the United States and abroad, including bank accounts in Switzerland, on behalf of the SMI companies.”
The informations charge one count of conspiracy to violate the FCPA’s anti-bribery provisions and on December 10, 2020 both Jorge and Bruno Luz pled guilty.
As highlighted in this article, Jorge Luz (who became known as the Deacon of Bribes in Brazil) was previously sentenced in Brazil to 13 years and eight months for his part in orchestrating bribes on behalf of various companies.