Recently Raymond Kohut (a Canadian citizen who lived in the Bahamas and worked in business development for Gunvor Group Ltd., a Switzerland based commodities firm) pleaded guilty in connection with an Ecuador bribery scheme.
Similar to the DOJ’s recent money laundering charges against Jorge Cherrez Mino and John Robert Luzuriaga Aguinaga in connection with a bribery scheme in Ecuador (see here for the prior post), the DOJ’s allegations against Kohut provide a jurisdictional basis for FCPA anti-bribery offenses, yet the information “only” charges money laundering offenses.
In summary fashion, the information alleges that between 2012 and 2020, Kohut and others “engaged in international bribery and money laundering schemes” and that in “furtherance of those schemes, Kohut, together with others, knowingly, willfully and corruptly agreed to offer and pay bribes on behalf of Trading Company [Gunvor] to, and for the benefit of, Ecuadorian officials, in order to obtain and retain business for Trading Company.”
According to the information, Petroecuador (described as the state-owned oil company of Ecuador) and the State-Owned Entities (described as two different state-owned oil and gas entities located in Asia) entered into a series of contracts in which the State-Owned Entities provided loans to Petroecuador secured by oil to be delivered over a period of years. Gunvor would then enter into agreement with the State-Owned Entities to market and sell the oil products delivered pursuant to those contract.
The information alleges that Kohut and others “agreed and understood that Consultant #1 (described as a citizen of Ecuador, Spain and the United States and an agent for Gunvor) would pay bribes to Ecuadorian officials, to, among other things, secure improper advantages for [Gunvor] in obtaining business related to Petroecuador. These improper advantages included, among other things, (i) directing Petroecuador to award contracts to the State-Owned Entities under favorable terms so that [Gunvor] could then enter into its related agreements with the State-Owned Entities; and (ii) providing confidential, non-public information about Petroecuador that assisted Consultant #1 and others in corruptly obtaining business for, and directing business to, [Gunvor] and others related to the contracts between Petroecuador and the State-Owned Entities.”
According to the information, Consultants “made bribe payments to Ecuadorian officials on behalf of [Gunvor] totaling at least $22 million.
As relevant to the FCPA, the information alleges that in furtherance of the bribery scheme, Kohut met with Ecuadorian Official #1 and others at a “house in Miami, Florida to discuss one of the Petroecuador contracts for which bribes would be paid” and that Kohut met with others “at a restaurant in Coral Gables, Florida to discuss certain of the contracts for which bribes would be paid.”
According to this article:
“A Gunvor spokesman said the company was cooperating with the Justice Department’s investigation into the matter. “Gunvor Group has learned of charges being brought against a former employee of the company by the U.S. Department of Justice that relate to business with an intermediary agent and Petroecuador,” the spokesman said. The spokesman said the company had taken steps to voluntarily terminate its relationship with the former agent before the opening of the government’s investigation and has since banned the use of agents for business-development purposes.”
As noted here:
“Previously, Gunvor agreed to pay $95 million in 2019 to settle a Swiss investigation into bribes paid to officials in the Republic of Congo and the Ivory Coast to win oil deals.”
In this November 2020 release, Gunvor stated:
“As a part of Gunvor’s efforts to continuously improve procedures in order to mitigate risk across the company, specifically in relation to areas of Compliance, the company has taken the decision to cease the use of “agents”, i.e., consultants and intermediaries, for business origination and development purposes.
Gunvor has already reduced the number of such consultants and intermediaries by approximately 45% since 2018, and is now in the process of winding-down the remainder of consultant contracts in this respect. Going forward, these activities will be managed in accordance with requirements, adopting the most suitable structures based on Compliance standards.
“The lessons of the past bear on how Gunvor operates today, and when we identify areas in which our robust Compliance standards cannot be exactly upheld, we take action. To be clear, the company will do nothing short of ensuring that we are enforcing our zero-tolerance Compliance policies. If we lose business as a result, so be it,” said Gunvor’s CEO Torbjörn Törnqvist. “Gunvor’s priority is to constantly improve how we conduct business in all areas. In the last couple years, we have overhauled our company and business model, and today, we’re clearly stronger as a result.”
Gunvor will be further assessing its use of other consultants, including risk analysts and technical operational service providers, whose services entail greater transparency and a different, lower risk profile.”
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