ANTICORRUPTION DEVELOPMENTS -

DOJ Unseals Indictment of Two More Individuals Connected With PDVSA Corruption Scheme -

On February 26, 2019, the U.S. Department of Justice (DOJ) announced the unsealing of an indictment against two individuals alleged to have been involved in a corrupt payment scheme to secure contracts and other benefits with Venezuela’s state-owned energy company, Petroleos de Venezuela S.A. (PDVSA). Specifically, the DOJ alleges that both individuals, Rafael Enrique Pinto Franceschi (“Pinto”) and Franz Herman Muller Huber (“Muller”), Venezuelan citizens and Florida residents, worked for the same unnamed U.S.-based PDVSA supplier—Pinto as a sales representative and Muller as president of the company. Pinto and Muller are alleged to have made payments to PDVSA officials in exchange for insider information and assistance for their company in securing PDVSA contracts between 2009 and 2013. The DOJ further alleges that the men channeled a percentage of payments from PDVSA to the company back to the PDVSA officials involved in the scheme using a Panamanian shell company and a Swiss Bank account. Pursuant to the indictment, DOJ has charged the individuals with several counts of conspiracy to violate, among other statutes, the Foreign Corrupt Practices Act (FCPA), as well as wire fraud. Two of the three PDVSA officials to whom Pinto and Muller are alleged to have made improper payments, Jose Camacho and Ivan Guedez, have already pleaded guilty. The DOJ first brought charges relating to the PDVSA improper payment scheme in late 2015, and as previously covered in several Red Notice editions (most recently in November 2018), the DOJ has since indicted 21 individuals, 15 of whom have pleaded guilty to date.