This post continues a spontaneous journey around South America by highlighting the many FCPA enforcement actions regarding conduct (in whole or in part) in Argentina.
As highlighted in this prior post, the related companies resolved a net $420 million FCPA enforcement action primarily focused on Brazil, but also involving conduct in Angola, Argentina, Brazil, Colombia, Dominican Republic, Ecuador, Guatemala, Mexico, Mozambique, Panama, Peru, and Venezuela.
As to Argentina, the DOJ alleged:
“In or about and between 2007 and 2014, Odebrect made and caused to be made more than $35 million in corrupt payments to intermediaries with the understanding that these payments would be passed, in part, to government officials in Argentina. The corrupt payments were made in association with at least three infrastructure projects, and Odebrecht realized benefits of approximately $278 million.”
LAN Airlines & Ignacio Cueto Plaza (2016)
As highlighted in this prior post, the Chilean airline resolved a $22 million FCPA enforcement action in connection with an Argentine labor dispute. According to the government:
“These proceedings arise from violations of the FCPA by Respondent LAN Airlines S.A. In 2006 and 2007, LAN, through Ignacio Cueto Plaza (“the CEO”), the current CEO of LAN, authorized $1.15 million in improper payments to a third party consultant in Argentina in connection with LAN’s attempts to settle disputes on wages and other work conditions between LAN Argentina S.A. (“LAN Argentina”), a subsidiary of LAN, and its employees. At the time, LAN understood that it was possible the consultant would pass some portion of the $1.15 million to union officials in Argentina. The payments were made pursuant to an unsigned consulting agreement that purported to provide services that LAN understood would not occur. The CEO authorized subordinates to make the payments that were improperly booked in the Company’s books and records, which circumvented LAN’s internal accounting controls.”
Prior to the corporate action, the SEC brought an enforcement action against Cueto in which he agreed to pay a $75,000 civil penalty. (see here).
Olympus Latin America (2016)
As highlighted in this prior post, the medical imaging company resolved an approximate $23 million enforcement action “hundreds of unlawful payments” to publicly employed healthcare professionals in Brazil, Bolivia, Colombia, Argentina, Mexico, and Costa Rica to “induce the purchase of Olympus products, influence public tenders, or prevent public institutions from purchasing or converting to the technology of competitors.”
As to Argentina, the DOJ alleged:
“Between in or about April 2008 and December 2009, OLA offered or provided a physician employed at Argentina Hospital [a public hospital] and who participated in the hospital’s tender process (Physician #3), personal or non-Olympus medical education travel worth approximately $20,000, A-10 in order to improperly influence Physician #3 to continue purchasing Olympus equipment and to counter offers from two Olympus competitors to supply equipment to Argentina Hospital.
In or about early 2009, an OLA employee based in Miami, Florida, and Physician #3 signed an agreement whereby OLA improperly provided free equipment to Physician #3 which could be used for his personal practice and which intentionally omitted the provision of approximately $20,000 in personal or non-Olympus medical education travel that had been provided to him.”
Dallas Airmotive (2014)
As highlighted in this prior post, the aircraft maintenance company resolved a $14 million FCPA enforcement action based on charges it bribed Latin American government officials in order to secure government contracts.
As to Argentina, the DOJ alleged that payments were made to a bank account of a third party commercial representative in Florida and Argentina (respectively) while knowing that the funds, at least in part, would be passed on to officials in the office of the Governor of the Argentinean State of San Juan.
As highlighted in this prior post, the company resolved a $13.2 million enforcement action regarding conduct in Mexico, Poland, Romania, Argentina, and Greece.
As to Argentina, the SEC found:
“Between 2005 and 2008, Stryker’s wholly-owned subsidiary in Argentina (“Stryker Argentina”) made 392 commission payments, or “honoraria,” to physicians employed in the public healthcare system in order to obtain or retain business with affiliated public hospitals. Unlike traditional honorarium payments that are made in exchange for the provision of a service (such as making a speech), these honoraria were commissions that were calculated as a percentage of a total sale to a particular hospital and then paid to the public doctor associated with the sale. Stryker Argentina routinely made these payments by check to doctors at rates between 20% and 25% of the related sale. In total, Stryker Argentina made more than $966,500 in improper honoraria payments during the relevant period, causing Stryker Argentina to earn more than $1.04 million in profits from the public hospitals with which the doctors were associated. Stryker Argentina booked these payments as commission expenses in an account entitled “Honorarios Medicos,” when in fact they were unlawful payments made to compensate doctors for purchasing Stryker products.”
Ralph Lauren (2013)
As highlighted in this prior post, the company resolved a $1.6 million FCPA enforcement action based on the conduct of an indirect wholly-owned subsidiary headquartered and incorporated in Argentina and its General Manager who conspired with a customs clearance agency to make improper payments “to assist in improperly obtaining paperwork necessary for goods to clear customs, to permit clearance of items without the necessary paperwork, to permit the clearance of prohibited items, and to avoid inspection.” The SEC also found:
“In addition to paying bribes to Argentina customs officials, RLC Argentina’s general manager directly provided or authorized several gifts to be made to Argentine government officials to improperly secure the importation of RLC’s products into Argentina. The gifts provided to three different government officials between approximately 2005 through approximately 2009 included perfume, dresses and handbags value at between $400 and$14,000 each.”
As highlighted in this prior post, the company resolved a $22.8 million FCPA enforcement action regarding conduct in Brazil, Argentina, and China.
As to Argentina, the government alleged that “Biomet, certain of its executives, employees, and subsidiaries” “agreed to pay publicly employed Argentine health care professionals 15-20 percent commissions in exchange for the purchase of Biomet products.”
Ball Corp. (2011)
As highlighted in this prior post, the company resolved a $300,000 FCPA enforcement action regarding conduct in Argentina. The SEC found:
“From July 2006 through October 2007, Ball, through its Argentine subsidiary Formametal, S.A., offered and paid at least ten bribes, totaling at least $106,749, to employees of the Argentine government to secure the importation of prohibited used machinery and the exportation of raw materials at reduced tariffs.”
Helmerich & Payne (2009)
As highlighted in this prior post, the drilling contractor resolved an approximate $1.4 million FCPA enforcement action regarding conduct in Venezuela and Argentina based on payments “made in order to import and export goods that were not within regulations, to import good that could not lawfully be imported, and to evade higher duties and taxes on the goods.”
As to Argentina, the SEC found:
“H&P Argentina paid Argentine customs officials approximately $166,000 to permit the importation and exportation of equipment and materials without required certifications, to expedite the importation of equipment and materials, and to allow the importation of materials that could not imported under Argentine law.”
Siemens and Various Individuals (2008 & 2011)
As to Argentina, the government alleged that Siemens S.A. (Argentina), and those acting on its behalf, engaged in a bribery scheme in connection with an Argentine government contract to produce national identity cards.
As highlighted here, in connection with the same core conduct the DOJ criminally charged the following individuals: Uriel Sharef, Herbert Steffen, Andres Truppel, Ulrich Bock, Stephan Signer, Eberhard Reichert, Carlos Sergi and Miguel Czysch. The SEC charged the following individuals: Uriel Sharef, Herbert Steffen, Andres Truppel, Ulrich Bock, Stephan Signer, Carlos Sergi and Bernd Regendantz.
Misao Hioki (2008)
The DOJ criminally charged Hioki (the General Manager of the International Engineered Products Department (“IEP”) of Bridgestone Corp. who oversaw international sales of marine hose and other marine products) with antitrust and FCPA violations.
As to the FCPA, the DOJ alleged that Hioki and is co-conspirators “negotiated with employees of government-owned businesses, who are foreign officials under the FCPA, in at least the following Latin American countries, Argentina, Brazil, Ecuador, Mexico, and Venezuela, to make corrupt payments to those foreign officials to secure business …”.
In 2008, Hioki pled guilty and was “sentenced to serve two years in jail and to pay an $80,000 criminal fine.” (See here).
As highlighted in this prior post, in 2011 Bridgestone agreed to pay $28 million to resolve an antitrust and FCPA enforcement action. The FCPA conspiracy charged was based on “corrupt payments to foreign government officials in Latin America and elsewhere.” However, Mexico is the only country specifically mentioned.
BJ Services (2004)
As highlighted in this prior post, the oil field services company resolved an FCPA enforcement action focused on the company’s Argentina subsidiary and its relationships with customs officials. According to the SEC:
“During 2001, BJ Services, through its wholly owned Argentinean subsidiary B.J. Services, S.A. (“BJSA”), made illegal or questionable payments, totaling approximately 72,000 pesos to Argentinean customs officials. Further, from 1998 through April 2002 certain undocumented or improperly characterized payments were made totaling approximately 151,000 pesos. In certain instances, entries were made in BJSA’s books and records to conceal the payments. During the same period, BJ Services experienced certain breaches in the existing accounting policies, controls and procedures in certain areas of its Latin American Region.”
As highlighted in this prior post, the company resolved a $300,000 FCPA enforcement action based on conduct in Argentina. According to the SEC, the conduct involved “presumed illicit payments to foreign officials” in connection with a “$250 million systems integration contract” between Banco de la Nacion Argentina (“BNA”) (an apparent “government-owned commercial bank in Argentina) and IBM-Argentina. The SEC found that in connection with the contract, IBM-Argentina’s Former Senior Management (without the knowledge or approval of any IBM employee in the U.S.) caused IBM-Argentina to enter into a subcontract with an Argentine corporation (“CCR”) and that “money paid to CCR by IBM-Argentina in connection with the subcontract was apparently subsequently paid by CCR to certain BNA officials.”
Herbert Tannenbaum (1998)
As highlighted in this prior post, Tannenbaum (the principal of New York based Tanner Management Corporation – a garbage incinerator manufacturer) was criminally charged in connection with an FBI undercover sting operation.
An FBI agent received information from a confidential informant that Tannenbaum “had previously made payments to foreign government officials to induce them to purchase garbage incinerators from the defendant.” The informant further advised the FBI that Tannenbaum “had offered to make payments to government officials of various foreign countries in order to sell garbage incinerators in those countries” and during a recorded meeting with the informant Tannenbaum confirmed that he “had previously made a $75,000 cash payment to an official of the Government of Barbados, as an inducement for the purchase by his government of a garbage incinerator.” Thereafter, the informant, acting at the FBI’s direction, recorded a call with Tannenbaum during which Tannenbaum “admitted that he was willing to make payments to sell his garbage incinerators” and the complaint references specific payments in Taiwan and Argentina. During a meeting at the Park Lane Hotel in New York, the informant introduced Tannenbaum to the FBI special agent who was posing “as an Argentine government procurement official who wanted to purchase a garbage incinerator.” During the meeting, Tannenbaum offered to sell the Argentine “procurement official” an incinerator and stated “that he was willing to make a payment to facilitate the deal.” According to the complaint, Tannenbaum, on the way to a bank to open an account to facilitate the deal, told the undercover FBI agent posing as the “procurement official” that “for all he knew [“procurement official”] could have been an FBI agent” and that Tannenbaum was “in his seventies, and did not want to get in trouble.”
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