The Foreign Corrupt Practices Act has been around for approximately 47 years.
However, FCPA trials are rare.
Earlier this week – in Connecticut – trial began in U.S. v. Oztemel.
The trial is believed to be only the 23rd in FCPA history.
The DOJ’s Trial Memorandum states:
“On August 29, 2023, a grand jury in this District returned a nine-count superseding indictment charging Glenn Oztemel, Gary Oztemel, and Eduardo Innecco (“Innecco”) with conspiracy, multiple counts of violating the Foreign Corrupt Practices Act (“FCPA”), money laundering conspiracy, and money laundering.
The Superseding Indictment alleges that Glenn Oztemel participated in a scheme to pay over $1 million in bribes to Rodrigo Berkowitz (“Berkowitz”) and other officials at Brazil’s state owned and state-controlled oil and gas company, Petróleo Brasileiro S.A. – Petrobras (together with its U.S. subsidiary Petrobras Americas, Inc., “Petrobras”). The bribes were paid in cash and into a shell company controlled by Berkowitz and his father, Paolo Berkowitz, in Uruguay. The government expects Berkowitz will also testify that, in or about 2016, due to various investigations in Brazil, Berkowitz and Innecco agreed that Innecco would hold the bribe payments promised to Berkowitz until they could be transmitted without detection.
As a senior oil trader at Arcadia Fuels Inc. (“Arcadia”) (from approximately 2010 through 2012) and Freepoint Commodities LLC (“Freepoint”) (from approximately 2012 through 2018) (together, the “Trading Companies”), Glenn Oztemel was responsible, along with other employees of the Trading Companies, for managing a trading book through which the Trading Companies bought and sold significant volumes of oil products. In general, the Trading Companies made money by buying oil products at one price and selling them at a higher price—in many instances after “blending” products from different cargoes of oil products, or after storing cargoes in anticipation of a rise in oil prices. Glenn Oztemel’s compensation as a trader was tied, in part, to the profitability of his trading book and of the Trading Companies as a whole.
Glenn Oztemel sometimes used agents to assist with transactions between the Trading Companies and their counterparties, including Petrobras. One such agent was Innecco, who was based in Brazil and operated several companies, identified in the Superseding Indictment as the “Innecco Companies.” The Trading Companies paid the Innecco Companies over $6 million in purported consulting fees and commissions.
The government expects the evidence at trial to show that, in or about and between 2010 and 2018, Glenn Oztemel, Innecco, and others offered, promised, and paid bribes to various Petrobras officials, including Berkowitz, on behalf of the Trading Companies, in exchange for the officials’ assistance in helping the Trading Companies win business with Petrobras. In addition, the evidence will show that Glenn Oztemel agreed to pay purported commissions and other fees to Innecco while knowing that Innecco would use a portion of those commissions and fees to pay bribes. The evidence will further show that, as part of that same scheme, Glenn Oztemel helped facilitate “back-to-back” trades between Trading Company #1, Petrobras, and a company named Oil Trade & Transport (“OTT”), which was owned by Gary Oztemel, knowing that a portion of OTT’s profits from those contracts would be used to fund additional bribe payments.
In exchange for the bribes, Berkowitz and other Petrobras officials used their official positions at Petrobras to provide business advantages to Glenn Oztemel and the Trading Companies. The government anticipates that Berkowitz will testify he received or was promised bribes in connection with all or nearly all contracts between the Trading Companies and Petrobras between 2010 and 2018.
For his role in the scheme described above, the Superseding Indictment charges Glenn Oztemel with seven felony counts:
Count One charges Glenn Oztemel with conspiring with Gary Oztemel, Innecco, and others to violate the FCPA.
Counts Two, Three, and Four charge Glenn Oztemel with substantive FCPA violations, based on wire transfers dated May 9, 2018 (Count Two) and June 12, 2018 (Count Three), and a September 12, 2018 email (Count Four) from Innecco to Glenn Oztemel and others, which attached invoices for purported consultancy fees and commissions.
Count Five of the Superseding Indictment charges Glenn Oztemel with conspiring with Gary Oztemel, Innecco, and others to engage in international promotional money laundering, coinciding with the same time period as the FCPA conspiracy. The “specified unlawful activities” (“SUAs”) alleged in Count Five include the promotion of (i) violations the FCPA and (ii) violations of Brazilian law.
Counts Six and Seven of the Superseding Indictment charge Glenn Oztemel with substantive money laundering violations based on wire transfers to Innecco, dated August 10, 2018 (Count Six) and November 13, 2018 (Count Seven). The SUAs for Counts Six and Seven are the same as for the money laundering conspiracy charge alleged in Count Five.
[…]
Innecco was arrested in France on May 4, 2023. A French court has granted the United States’ extradition request, and the case is currently on appeal. On June 24, 2024, Gary Oztemel pleaded guilty to Count Nine of the Superseding Indictment (money laundering in violation of 18 U.S.C. § 1957), pursuant to a plea agreement with the United States, and is scheduled to be sentenced on October 17, 2024.
Accordingly, trial will proceed against Glenn Oztemel only, on Counts One through Seven of the Superseding Indictment. Neither Innecco nor Gary Oztemel is expected to testify at trial.”
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An interesting side note.
Is having FCPA knowledge a reason for a potential juror to be struck for cause in an FCPA trial?
Apparently so.
According to this article about jury selection in the Oztemel matter, a potential juror was struck for cause [by U.S. District Judge Kari A. Dooley] because she worked in important export markets in South America and handled compliance matters for her employer, including Foreign Corrupt Practices Act initiatives similar to those at issue in the Oztemel case.”
