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Potpourri

Guilty Plea

This recent post highlighted the DOJ’s money laundering case against Luis Enrique Martinelli Linares (a citizen of Panama and Italy) and his brother Ricardo Alberto Martinelli Linares (also a citizen of Panama and Italy), for “participating in the Odebrecht bribery scheme by, among other things, serving as intermediaries for bribe payments and the provision of other things of value that Odebrecht offered and provided to the Panama Government Official.

Luis recently pleaded guilty and yesterday the DOJ announced that Ricardo did as well.

According to the DOJ release:

“Ricardo Martinelli Linares admitted that he conspired with his brother, Luis Martinelli Linares, and others to establish offshore bank accounts in the names of shell companies to receive and disguise over $28 million in bribe proceeds from Odebrecht for the benefit of his close relative, a high-ranking public official in Panama. These funds were wired into, and out of, the United States.”

In the release, Assistant Attorney General Kenneth Polite Jr. stated:

“Ricardo and Luis Martinelli Linares played integral roles in the corrupt scheme to funnel Odebrecht bribes to a high-ranking Panamanian government official. They used the U.S. financial system to further their scheme, took steps to create shell company accounts at offshore banks to try to evade responsibility, and used some of the bribe proceeds for their personal benefit. The guilty pleas of Ricardo Martinelli Linares and Luis Martinelli Linares demonstrate that the Department of Justice remains committed to combating corruption at home and abroad. The Criminal Division will work with its law enforcement partners around the globe to hold individuals who use our financial system to promote corruption and launder illicit funds accountable.”

JPMorgan

In 2016, JPMorgan (and a related entity) resolved a $202.6 million Foreign Corrupt Practices Act enforcement action based on its alleged improper hiring and internship practices that the U.S. government labeled bribery and corruption (see here).

Reuters reports:

“A Brazilian police investigation of alleged bribery of Petrobras employees to fix the price of fuel sold to JPMorgan Chase & Co by the state-run oil firm has expanded from one deal to at least four over the course of 2011, according to documents and two law enforcement officials.

Previously unreported invoices related to fuel sale agreements between the two companies show one of the alleged intermediaries in the bribery scheme, known as Oil & Gas Venture Capital Corp (OGVC), received approximately $150,000 that year from another alleged intermediary named EGR Consultants to facilitate the purchase of roughly 826,000 barrels of fuel oil by JPMorgan, worth more than $80 million at the time.

The additional invoices are significant as Brazilian police have been working to determine if a 305,000-barrel JPMorgan deal facilitated by OGVC and EGR was a one-time arrangement or part of a pattern, which would raise the stakes of the investigation, according to two law enforcement sources in Brazil, who requested anonymity to discuss an ongoing probe.

Reuters reported in September that Brazil’s federal police are investigating whether JPMorgan routed bribes via intermediaries to employees on Petrobras’ trading desk in order to secure shipments of fuel at artificially low prices. If true, this would likely violate Brazilian anti-bribery law.”

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