Corsa Coal Corp. is a publicly traded Pennsylvania-based coal mining company focused on the production and sales of metallurgical coal, an essential ingredient in the production of steel. It’s core business is producing and selling metallurgical coal to domestic and international steel and coke producers.
Between 2016 and 2020, Frederick Cushmore Jr. (pictured) was employed by Corsa in various international sales positions including Vice-President, Head of International Sales. (See here for Corsa’s 2018 press release announcing Cushmore’s promotion. In the release, Corsa’s CEO stated: “We are thrilled to … provide Fred with a well-deserved promotion.”
Recently, Cushmore was criminally charged and plead guilty to a conspiracy charge to violate the FCPA’s anti-bribery provisions in connection with a bribery scheme in Egypt.
According to the charging document, Al Nasr Company for Coke and Chemicals (“Al Nasr” or “NCCC”) was an Egyptian state-owned and state-controlled entity and was a subsidiary of Metallurgical Industries Holding Company, which was owned and controlled by the Egyptian government.
Between 2016 and 2020, Al Nasr contracted with Corsa to purchase coal and during that time Corsa shipped coal to Al Nasr in Egypt on approximately 13 occasions. In total, Al Nasr paid Corsa approximately $143 million in connection with the coal shipments and Corsa earned millions of dollars in profits in connection with the sale of coal to Al Nasr.
According to the DOJ, Cushmore negotiated the terms of Corsa’s coal shipments to Al Nasr and dealt directly with Agent A and Company 2 in connection with Corsa’s coal sales in Egypt. As stated in the charging document, “Agent A was an Egyptian national who controlled and operated Company 2 – a business entity based in Egypt.” Corsa paid Agent A commissions on each metric ton of coal that Corsa sold to Al Nasr and to “obtain and retain lucrative sales contracts with, and other business advantages from, Al Nasr by making corrupt bribe payments to Foreign Official A [a high-level executive at Al Nasr] and other Egyptian government officials, through Agent A and Company 2.”
According to the DOJ, Cushmore, Executive A [a former Corsa employee between 2016 and 2018 who established Corsa’s formal sales relationship with Al Nasr before Cushmore succeeded him in early 2018] and Agent A used various means including encrypted messaging services to discuss the details of the bribery scheme.
The charging document alleges that the purpose of the approximately $4.8 million in commissions paid to Agent A, a portion of which was used to pay bribes, was to obtain multiple coal contracts with Al Nasr between 2017 and 2020, help secure a long-term sales contract with Al Nasr and obtain inside, non-public information about Corsa’s competitors’ bids to sell coal to Al Nasr.