Last month, Julian Aires (an individual associated with a joint venture partner of AAR Corp. – a U.S. based aviation services company) pleaded guilty to conspiracy to violate the FCPA’s anti-bribery provisions in connection with business dealings with South Africa Airways (SAA) as well as a contract involving Swissport and SAA. (See here for the prior post).
It was noted that the enforcement action was likely the first of several related enforcement actions to come as AAR’s recent annual report disclosed FCPA scrutiny in South Africa as well as Nepal.
Sure enough.
Recently, Deepak Sharma (pictured) (a United Kingdom citizen and resident) pleaded guilty to conspiracy to violate the FCPA’s anti-bribery provisions in connection with a bribery scheme involving Nepal Airlines Corporation (“NAC”), an alleged instrumentality of the Nepali government.
In charging documents, Sharma is described as an “agent” of Company 1 (a reference to AAR). As highlighted here, Sharma is described as the former President of Integrated Solutions at AAR and appears to be currently associated with Aircraft Finance Germany.
According to the criminal information:
“It was the purpose of the conspiracy for Sharma and his co conspirators to illegally benefit Company 1, Subsidiary 1 [a wholly-owned subsidiary of Company 1], and others by bribing Nepali officials, including Foreign Official 1 [a Nepali citizen who served as a high-level official at NAC from at least approximately 2015 through 2019] in order to win a bid to sell two Airbus A330-200 aircraft to NAC (“NAC Transaction”).”
[…]
Sharma and his co-conspirators made and received wire transfers intended, in part, as bribes for Nepali officials in connection with the NAC Transaction, using bank accounts in the United States, Ireland, and the United Arab Emirates, among other places.
Sharma and his co-conspirators attempted to disguise the wire transfers as legitimate business transactions by entering into sham agreements between Subsidiary 2 [a wholly-owned subsidiary of Company 1], Company 2 [an aircraft leasing and trading company based in Germany], and Company 3 [a special purpose vehicle incorporated in Ireland and managed by Company 2] on the one hand, and Companies 4 [a Hong Kong incorporated company used by Intermediary] and 5 [a United Arab Emirates incorporated company used by Intermediary] on the other. Some of the payments were made pursuant to sham invoices sent by Sharma and his co conspirators from Companies 4 and 5 and directed to Company 3. The invoices falsely referred to the bribe payments as “advances.”
According to the criminal information:
“In or around November 2015, Sharma attended a meeting in Nepal with Intermediary [a Nepali citizen engaged by Sharma and others to facilitate bribe payments to foreign officials, including Foreign Official 1] and Foreign Official 1, during which the potential NAC Transaction was discussed. Foreign Official 1 proposed that Sharma, on behalf of Company 1, engage Intermediary as a lobbyist for the potential NAC Transaction, via a company affiliated with, and nominated by, Intermediary.”
According to the Statement of Offense associated with the plea agreement:
“In total, between in or around May and August 2018, Company 3 paid Company 5 the equivalent of approximately $2,500,000 in connection with the NAC Transaction, a portion of which the defendant understood would be distributed as bribes to Nepali officials, including Foreign Official 1.”
Separately, the Statement of Offense alleges as follows regarding Sharma’s role in the the South African bribery scheme to which Aires pleaded guilty.
“Separately, in South Africa, Company 1, through a subsidiary and a South Africa based joint venture partner (“JV Partner”) obtained a five-year aircraft component support contract with South African Airways Technical (“SAAT”) in 2016. SAAT was a wholly-owned subsidiary of the state-owned flag carrier airline of South Africa, South African Airways (“SAA”). JV Partner, on behalf and for the benefit of Company 1, paid bribes to officials at SAA and SAAT in order to obtain and retain the SAAT contract.
During the bid process for the SAAT contract, the defendant received competitor information from JV Partner, which the defendant understood to have come from an SAAT official in exchange for bribe payments. For example, on or about April 18, 2016, the defendant requested and received information on competitors’ bids and SAAT bid scoring from a senior person of JV Partner. The information showed that Company 1 had scored the worst in an early round bid. The defendant and others at Company 1 and Subsidiary 1 then used that confidential competitor information from SAAT to modify Company 1’s later bid and win the SAAT contract.
During the course of the SAAT contract, on or about October 23, 2016, the defendant sent an email to another Company 1 executive regarding a potential price increase on the SAAT contract to cover a requested fee increase for JV Partner, stating, “The way to do this will be for them (SAAT) to request to us asking for change to the [fleet requirements]. … It will also look very authentic in terms of why rates went up. . . . I want to be absolute sure from [JV Partner] that this is possible before I say anything to [a Company 1 executive].”
During the course of the SAAT contract, SAAT paid Company 1 approximately $79.6 million. Company 1 paid JV Partner approximately $5.3 million between in or around September 2016 and January 2020, a portion of which the defendant understood was used to pay bribes to the SAA and SAAT officials involved in awarding the contract to Company 1 and JV Partner.”
Sharma is represented by Orrick attorneys David Krakoff and Jamie Parkinson.
