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Potpourri

Agreement in Principle

As highlighted in prior posts here [1] and here [2] in 2016 hedge fund Och-Ziff resolved a $412 million Foreign Corrupt Practices Act enforcement action concerning improper business practices in various African countries.

As highlighted in this 2018 post [3], former shareholders of Canadian mining company Africo Resources Ltd. (“Claimants”) 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 DOJ opposed the request arguing, among other things, that Claimants had not show direct or proximate causation of quantifable harm from Och-Ziff’s conduct and that damages were too speculative.

However, as highlighted here [4], in August 2019 the court rejected the DOJ’s position and found that Claimants are victims of Och-Ziff’s crime under the MVRA and “directed the parties to submit supplemental briefing regarding how to calculate the appropriate restitution amount.”

Recently, the company now known as Sculptor Capital Management announced [5]:

“At a status conference on July 23, 2020, Oz Africa Management GP, LLC (“Oz Africa”), certain former shareholders of Africo Resources Inc. (the “Claimants”) and the U.S. Department of Justice discussed a potential settlement framework with the Honorable Nicolas Garaufis of the U.S. District Court for the Eastern District of New York (the “Court”) that would resolve the restitution dispute in U.S. v. Oz Africa Management GP, LLC, Cr. No. 16-515 (NGG) (EDNY). Oz Africa and the Claimants have agreed in principle on a restitution amount of $136 million. If the Court approves this framework then the settlement terms would be presented to the Court for approval. The proposed settlement remains subject to (i) final negotiation and signing of a formal settlement agreement, which will only be entered into if the Court approves the settlement framework and (ii) the subsequent approval by the Court of the restitution amount.”

[6]

Sentenced

As noted in this article [7]:

“Former Alstom SA executive and government cooperator Edward Thiessen was sentenced to time served … for his role in a scheme to bribe Indonesian officials to get Alstom business with the state-owned power company.

Appearing via video-conference from his home in Canada, Thiessen, 61, expressed remorse. Thiessen pled guilty last year to conspiring to violate the Foreign Corrupt Practices Act and testified at the trial of his former fellow Alstom executive Lawrence Hoskins.

“I am extremely sorry for what I have done,” Thiessen said, adding an apology to the people of Indonesia. “This corruption has cost them significantly. They deserve better.”

[…]

Based on that help and the fact that Thiessen was a “minimal” participant in the scheme, prosecutors asked the judge to give him much less time than Hoskins’ 15-month sentence.

During his sentencing, Thiessen told U.S. District Court Judge Janet Bond Arterton that after being forced to retire from Alstom amid the bribery investigation in 2014, he declined other job offers in Indonesia, knowing they would likely have required him to wade back into moral gray areas.

The judge noted his choice to do so, and credited Thiessen’s six-year cooperation in Hoskins’ case.

“As I think about what is a just sentence, I think that part of that just sentence is ending his involvement with our criminal justice process,” the judge said, noting Thiessen will face “further contrition” when he has to explain his conviction to his preteen daughter.

Judge Arterton sentenced Thiessen to pay a $15,000 fine. That is the only obligation Thiessen has left, because the judge saw no point in requiring the Canadian to check in with U.S. probation officers or otherwise serve supervised release.

“I am aware and explored in other cases how supervised release could be implemented extraterritorially. Maybe it can. I am not going to do it in this case,” the judge said.”

Across the Pond

The United Kingdom Serious Fraud Office recently announced [8]:

“The SFO has secured convictions against two former oil executives who conspired to give corrupt payments to secure contracts in Iraq.

A jury at Southwark Crown Court found Ziad Akle guilty on two counts and Stephen Whiteley guilty on one count of conspiracy to give corrupt payments. The convictions follow the guilty pleas of co-conspirator Basil Al Jarah who, in July 2019, admitted five offences of conspiracy to give corrupt payments.

In the years of reconstruction following the overthrow of Saddam Hussein in 2003, the three men conspired with others to pay bribes to public officials at the Iraqi South Oil Company and, and in Basil Al Jarah’s case the Iraqi Ministry of Oil, to secure oil contracts for Unaoil and its clients.

[…]

Basil Al Jarah admitted to paying bribes totalling over $6million to secure contracts worth $800m for the supply of oil pipelines and offshore mooring buoys. Ziad Akle and Stephen Whiteley were found guilty of paying over $500,000 in bribes to secure the $55m contract for the offshore mooring buoys.”

Recently Akle was sentenced to five years’ imprisonment (see here [9]).

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