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Medical Services Company To File Restitution Claim In Connection With Glencore FCPA Enforcement Action


As highlighted here, in May 2022 Glencore (a commodities company incorporated in the United Kingdom and headquartered in Switzerland) resolved a net $443 million FCPA enforcement action.

According to the DOJ: “From at least in or about 2007 up to and including in or about 2018, Glencore, through certain of its employees and agents, while acting on behalf of Glencore, together with its co-conspirators, knowingly and willfully conspired and agreed with others to corruptly provide more than $100 million in payments and other things of value to various intermediaries with the intent that a significant portion of these payments would be used to pay bribes to and for the benefit of foreign officials to secure an improper advantage and to influence those foreign officials in order to obtain or retain business in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea, Brazil, Venezuela, and the Democratic Republic of Congo.”

A portion of the conduct in the Democratic Republic of Congo related to bribe paid in connection with a litigation dispute.

As alleged in the criminal information:

“In or about January 2010, a medical services company sued Glencore Mining for breach of contract in the amount of more than $16 million. Glencore employees, overseeing Glencore Mining’s operations, approved a $500,000 invoice that was used as a bribe payment to have the lawsuit dismissed.

Specifically, on or about November 3, 2010, emails between DRC Agent and Executive 3 stated, in substance and in part, that DRC Agent talked with a DRC official who was meeting with DRC Agent and a judge presiding over the contract dispute and that, ‘without [the DRC’s official’s] help we will be screwed big time, I believe. We need political pressure.’ DRC Agent suggested that Glencore could ensure that Glencore Mining would prevail in the contract dispute if DRC Agent had a ‘reasonable amount of ammunition to make it happen,’ and further indicated that the attorney for the third-party plaintiff ‘is ready to play along for the good cause.’

On or about November 4, 2010, DRC Agent emailed an employee for Glencore and copied Employee Z, asking whether to prepare an invoice for $500,000 in the name of an accountant or lawyer. The next day, DRC Agent forwarded Employee Z and others a fake invoice in the amount of $500,000, purportedly from DRC Agent’s attorney for work relating to the contract dispute. On or about November 9, 2010 Glencore Mining Company paid a $500,000 invoice via wire transfer through a correspondent bank account held at a financial institution located in the Southern District of New York.

On or about November 17, 2010, DRC Agent emailed Employee Z and Executive 3, explaining that DRC Agent had attended a ‘personal meeting’ with the judge for the contract dispute, stating the meeting was ‘in front of [a public official] and that ‘everything is under control .. its thanks to [public official] that [Glencore Mining] will win that case …’.

In or about January 2011, the contract dispute was decided in Glencore Mining’s favor. Accordingly, Glencore avoided paying approximately $16,084,000 to settle the claim.”

Recently, counsel for Ian and Laurethe Hagen (the 90% owners of Crusader Health RDC SARL – formerly Crusader Health RDC SPRL) petitioned the court in the underlying Glencore FCPA enforcement action to file a restitution claim under the Mandatory Victims Restitution Act and the Crime Victims Act on the basis that the entities were the “medical services company” in the FCPA enforcement action.

The judge granted the petition and set a briefing schedule over the next month.

As highlighted here and here, in the aftermath of the 2016 Och-Ziff FCPA enforcement action, former shareholders of Canadian mining company Africo Resources Ltd.  sough restitution pursuant to the Mandatory Victims Restitution Act for losses allegedly incurred as a result of Och-Ziff’s bribery of corrupt officials in the Democratic Republic of the Congo. The court ultimately awarded the claimants $138 million in restitution.

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