On August 10, 2023, the U.S. Securities Exchange Commission (“SEC”) and the Department of Justice (“DOJ”), in coordination with Columbian authorities, announced that Colombian conglomerate Grupo Aval Acciones y Valores S.A (“Grupo Aval”) and its banking subsidiary Corporacion Financiera Colombiana S.A. (“Corficolombiana”) agreed to pay approximately $80 million USD for their alleged involvement in a scheme to pay $23 million USD in bribes to high-ranking government officials in Colombia, in violation of the anti-bribery provisions of the Foreign Corrupt Practices Act (“FCPA”). In resolving these allegations, Corficolombiana entered into a three-year Deferred Prosecution Agreement (“DPA”) with the DOJ, and agreed to pay a $40.6 million USD criminal penalty, up to half of which may be credited against payments to the Columbian government. To settle the SEC’s claims, Grupo Aval and Corficolombiana agreed to a cease-and-desist order with the SEC and agreed to pay an additional $40 million USD.
According to the DOJ, between 2012 and 2015 Corficolombiana conspired with an executive of a Brazil-based construction conglomerate, Odebrecht S.A. (“Odebrecht”), to secure a competitive capital contract to construct and operate a 328-mile highway toll road project, the Ocaña-Gamarra Extension, in Colombia. Alongside Odebrecht, Corficolombiana offered and ultimately paid more than $23 million USD in bribes to high-ranking government officials in the executive and legislative branches to win the contract. The DOJ asserts that approximately $28 million USD in illicit payments were made to officials with the knowledge, approval, and guidance of Corficolombiana’s former president. To further the scheme, Corficolombiana allegedly motivated other entities to enter into fictitious contracts with companies associated with intermediaries in order to disseminate the bribes to government officials. Corficolombiana earned $28.6 million USD in profits from the bribes and Grupo Aval allegedly obtained an improper financial benefit of approximately $32 million USD. The former president of Corficolombiana was sentenced to nearly 12 years in prison by Colombian authorities following a criminal trial in 2019.
Pursuant to the DPA, Corficolombiana has agreed to continue cooperating with the DOJ in any future criminal investigation relating to this conduct, to further enhance its compliance program, and to provide necessary reports to the DOJ regarding remediation and the implementation of agreed upon compliance measures. The DOJ recognized that Corficolombiana acknowledged its role in the bribery scheme, timely provided facts, produced documents, and provided sworn testimony. Additionally, in announcing the resolution, the DOJ noted that the company also conducted a root cause analysis of conduct identified during investigations, bolstered its corporate governance and control systems, and improved its third-party intermediary risk management process. As a result, the DOJ credited the entity for the prompt and extensive remedial measures, noting that the $80 million USD settlement reflects a 30 percent reduction from the fine recommended by the U.S. Sentencing Guidelines.
As to the cease and desist order with the SEC, Grupo Alva and Corficolombiana have undertaken remedial efforts: conducting a comprehensive risk assessment, re-designing their anti-corruption compliance program, and improving policies and procedures for joint venture entities and investments.
The DOJ and SEC have asserted that this resolution should serve as a reminder to chief compliance and financial officers of the need to implement and monitor robust internal accounting controls, with the SEC’s FCPA Unit Chief, Charles Cain, noting, “[l]ax control environments are fertile ground for mischief, as illustrated here, where bribes were funded through payments made for invoices lacking supporting documentation and contracts for vaguely described services typically handled internally rather than by third parties.”
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United States of America v. Corporación Financiera Colombiana S.A.
In the Matter of Grupo Aval Acciones Y Valores S.A. and Corporación Financiera Colombiana S.A.
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