Designed for busy in-house counsel, compliance professionals, and anti-corruption lawyers, this newsletter summarizes some of the most important international anti-corruption law and enforcement developments from the past month, with links to primary resources. This month we ask: Which defendants were convicted of bribery offenses by juries in the United States and the United Kingdom? How does the new head of the UK’s Serious Fraud Office (SFO) intend to incentivize whistleblowers? How will amendments to Australia’s criminal laws impact that country’s foreign bribery enforcement efforts? The answers to these questions and more are here in our February 2024 Top 10.
1. Federal Jury Finds Former Commodities Trader Guilty in Ecuador and Mexico Bribery and Money Laundering Schemes.
On February 24, 2024, a jury in the Eastern District of New York convicted former oil and gas trader Javier Aguilar of conspiracy to violate the Foreign Corrupt Practices Act (FCPA), violating the FCPA, and conspiracy to commit money laundering. The charges related to Aguilar’s alleged role in bribing officials of Petroecuador, Ecuador’s national oil company, and PEMEX Procurement International (PPI), a subsidiary of Mexico’s national oil company, Petroleos Mexicanos (PEMEX), to secure lucrative contracts from those companies.
In May 2023, the presiding judge, Eric Vitaliano, dismissed PEMEX-related FCPA charges against Aguilar for lack of venue (the charges were later refiled in the Southern District of Texas), but ruled that the PEMEX-related money laundering charges could go forward in the Eastern District of New York. During the trial, which began on January 5, 2024, Judge Vitaliano dismissed a portion of the money laundering charge, finding that payments to PPI officials could not be considered bribes to a public official under Article 222(II) of Mexico’s Federal Penal Code, one of the Specified Unlawful Activities (SUAs) in the money laundering charge.[1] But Vitaliano denied Aguilar’s request for a jury instruction regarding the local law affirmative defense under the FCPA, another SUA in the money laundering charge. Judge Vitaliano ruled that Aguilar did not meet his burden of showing that the payments at issue were lawful under Mexican law more generally.[2]
In December 2020, Aguilar’s former employer, Vitol Inc., agreed to pay more than $135 million to resolve criminal FCPA charges relating to bribes paid to officials in Brazil, Ecuador, and Mexico. (For more on the Vitol and Aguilar prosecutions, see our September 2020, December 2020, December 2022, May 2023, August 2023, and January 2024 Top 10s.)
2. Waste Management Executive Pleads Guilty in Conspiracy to Bribe Foreign Officials in Latin America.
On February 27, 2024, Mauricio Gomez Baez, a former Senior Vice President of international waste management company Stericycle, Inc., pleaded guilty to one count of conspiracy to violate the FCPA’s anti-bribery provisions.[3] Gomez Baez, a citizen of Mexico and resident of Miami, Florida, worked for the company’s Latin American headquarters in Miami.[4] From 2011 to 2016, Gomez Baez and others allegedly coordinated payments of roughly $10.5 million in bribes to government officials in Mexico, Brazil, and Argentina to obtain government contracts for medical waste collection, resulting in approximately $21.5 million in profits for the company. In each of these alleged schemes, Gomez Baez and others typically generated spreadsheets with false transactions and used code words to discuss the bribes. Under the terms of the Plea Agreement, Gomez Baez faces a term of imprisonment of up to five years, a supervised release term of up to three years, and a fine of up to $250,000, along with any additional forfeiture and restitution that the court orders. This criminal charge follows Stericycle’s April 2022 resolutions with the U.S. Department of Justice (DOJ) and U.S. Securities and Exchange Commission (SEC) for related conduct.
3. FBI Informant Arrested for Bringing False Bribery Allegations against President Biden.
On February 15, 2024, DOJ announced that a two-count indictment charging Alexander Smirnov with felony false statement and obstruction crimes had been unsealed in the Central District of California. The indictment alleges that Smirnov made numerous false statements to the FBI during his time as a “confidential human source (CHS).” Among other things, Smirnov allegedly falsely told FBI agents in 2020 that executives of Burisma Holdings, Limited, a Ukrainian-based industrial conglomerate, took steps to curry favor from “Public Official 1” while he was in office in 2015 and/or 2016 through his son, “Businessperson 1.” The anonymized individuals are understood to be, respectively, then-Vice President Biden and his son, Hunter Biden. Smirnov allegedly falsely claimed that, during two meetings in 2015 and 2016, the Burisma executives admitted to him that they had hired Businessperson 1 “to protect us, through his dad, from all kinds of problems.” Smirnov also allegedly later stated that Public Official 1 and Businessperson 1 both received a $5 million payment from the executives. According to the indictment, Smirnov did not actually have contact with the Burisma executives until 2017, after Public Official 1 was no longer in office. When interviewed by the FBI in September 2023, Smirnov allegedly repeated some of his false claims to the FBI, changed his story as to other claims, and promoted a new false narrative after he said he met with Russian officials. Smirnov faces a maximum sentence of 25 years in prison if convicted.
4. Middleman Sentenced for Venezuelan Food Contract Bribery Scheme.
On February 16, 2024, Venezuelan citizen Orlando Alfonso Contreras Saab was sentenced to six months in prison after pleading guilty in the Southern District of Florida to conspiring to violate the FCPA.[5] DOJ filed a criminal information against Contreras Saab in September 2023, alleging that he engaged in a scheme to bribe Venezuelan officials to obtain multi-million-dollar contracts with Venezuelan state-owned entities for the production, importation, and distribution of food and medicine to the Venezuelan people. Contreras Saab allegedly facilitated bribe payments to, among others, Jose Gregorio Vielma-Mora, the Governor of the State of Tachira in Venezuela, who oversaw a state-owned company that purchased food for residents of his state. (DOJ announced related money laundering charges against Vielma-Mora and others in October 2021.) Contreras Saab admitted that, between 2016 and 2019, he received approximately $17 million as part of the conspiracy, transferring approximately $11 million in wire payments and assets at the direction of Vielma-Mora and keeping approximately $6 million for himself.[6] In addition to six months’ imprisonment, Contreras Saab was also ordered to forfeit over $6 million.
5. DOJ Releases Final Criminal FCPA Statistics for 2023.
On February 20, 2024, DOJ’s Fraud Section published its annual Year in Review for 2023. According to the Year in Review, in 2023, the Fraud Section’s FCPA Unit obtained six corporate resolutions, which involved the imposition of over $657 million payable to U.S. or foreign authorities. Among these corporate resolutions were actions resulting in $1.2 million in disgorgement and restitution from Corsa Coal in March 2023, over $206 million recovered against Telefonaktiebolaget LM Ericsson in May 2023, over $85 million recovered against Corporación Financiera Colombiana S.A. in September 2023, and nearly $100 million recovered against Freepoint Commodities LLC in December 2023. According to the Year in Review, the FCPA Unit charged 15 individuals, and convicted seven, either through a guilty plea or at trial. The Year in Review highlighted three significant cases involving the prosecution of individuals—the conviction of Roger Ng in April 2023, the conviction of Claudia Diaz and her husband Adrian Velasquez in April 2023, and the prosecution of Georgia businessman Carl Zaglin and others, announced in December 2023.
6. UK Charges Two Oil Executives in UAE Bribery Scheme.
On February 16, 2024, the SFO announced bribery charges against two senior executives of the Petrofac Group. The two executives—Marwan Chedid and George Salibi—worked in various senior roles within the Group and were based in the United Arab Emirates (UAE). According to the SFO, from 2012 to 2018, Chedid and Salibi were involved in offering and paying agents over $30 million to influence the awarding of contracts worth approximately $3.3 billion in Petrofac’s favor. The contracts, which related to oil facilities in the UAE, allegedly included a contract for the design and infrastructure of one of the largest oil fields in the Gulf region. Petrofac agreed to plead guilty to related charges in October 2021. (For more information on SFO’s previous charges against Petrofac and its executives, see our February 2019, January 2021, October 2021, December 2021, and April 2022 Top 10s, as well as our 2021 Q4 UK Quarterly Review and our 2021 UK Litigation Year in Summary).
7. UK Jury Finds Former Madagascar Official Guilty of Bribery.
On February 20, 2024, UK’s National Crime Agency (NCA) announced that a jury at Southwark Crown Court had convicted Romy Andrianarisoa, the former chief of staff to the President of Madagascar, on bribery charges. According to the NCA, Andrianarisoa and an associate, Philippe Tabuteau, attempted to solicit bribes from Gemfields, a UK ruby and emerald mining company, in exchange for their help securing an exclusive mining joint venture with the Government of Madagascar. The company reported the suspected bribe demands to the NCA, which commenced an investigation that made use of surveillance and other covert tactics and led to the pair’s arrest in August 2023. Andrianarisoa’s sentencing is scheduled for March 18, 2024. Tabuteau pleaded guilty in September 2023.
8. New SFO Head Delivers First Speech, Emphasizing Whistleblower Incentives and Domestic Cooperation.
On February 13, 2024, Nick Ephgrave delivered his first speech as the new head of the SFO. Ephgrave emphasized his background in law enforcement and highlighted his goal of supporting the SFO in taking bold actions to resolve cases and keep up investigation momentum. Ephgrave announced that, in order to incentivize individuals to come forward with evidence of crimes, the SFO would use monetary incentives to support whistleblower reports in the UK and would better use the reduced sentences and immunity provisions for cooperating offenders under the Serious Organised Crime and Police Act 2005. Ephgrave cited the success of similar schemes in the United States. Ephgrave also noted that the SFO aims to collaborate with other UK agencies. Although he did not mention foreign agencies in this speech, Ephgrave has elsewhere emphasized the need to build “strong international relationships” to combat cross-border crimes. (For more analysis of Ephgrave’s speech, see our client alert.)
9. Prominent Russian Anti-Corruption Activist Dies in Prison.
On February 16, 2024, noted anti-corruption activist and Russian opposition leader Aleksy Navalny died in a Russian prison at the age of 47. Navalny founded the Anti-Corruption Foundation in 2011 and rose to prominence by speaking out against what he said was systemic corruption in Russia. Navalny had been jailed since January 2021, when he returned to Moscow from Germany, where he had received treatment following a suspected poisoning in August 2020 that some attributed to the Russian government. Navalny was later convicted three times on charges including embezzlement and contempt of court and sentenced to a 19-year prison term. On February 19, 2023, the EU released a statement strongly condemning the death of Navalny. The EU underlined their opposition to Navalny’s politically motivated imprisonment resulting from his anti-corruption efforts and legitimate political work. On February 23, 2024, the U.S. Department of Treasury issued new sanctions on over 300 entities to mark the second anniversary of Russia’s war against Ukraine and to recognize Navalny’s death. The Department of State and Department of Commerce joined in adding new restrictions on hundreds of Russian entities. Three Russian government officials were specifically targeted for sanctions due to their association with Navalny’s death.
10. Australian Parliament Strengthens Foreign Bribery Legislation.
On February 29, 2024, the Australian parliament passed the Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023. Proposed in June 2023, the bill removes the requirement for prosecutors to prove that a defendant had a specific advantage in mind when the defendant paid the bribe, creates an offense for corporate failure to prevent foreign bribery by an “associate” (which would include officers, employees, agents, and contractors), and expands the definition of a foreign public official to include prospective candidates for public office. Two previous attempts to introduce amendments to Australia’s foreign bribery legislation in 2017 and 2019 had failed. By removing obstacles to the foreign bribery offense and introducing the new failure to prevent offense, the new bill could help increase Australia’s foreign bribery enforcement efforts.
[1] Memorandum and Order, United States v. Aguilar, Case No. 1:20-cr-00390-ENV, (E.D.N.Y. Feb. 16, 2024), ECF No. 313.
[2] Order, United States v. Aguilar, Case No. 1:20-cr-00390-ENV, (E.D.N.Y. Feb. 20, 2024).
[3] Plea Agreement, United States v. Gomez Baez, Case No. 1:24-cr-20050 (S.D. Fla. Feb. 27, 2024), ECF No. 22.
[4] Factual Proffer, United States v. Gomez Baez, Case No. 1:24-cr-20050 (S.D. Fla. Feb. 27, 2024), ECF No. 21.
[5] Judgment as to Orlando Alfonso Contreras Saab, United States v. Contreras Saab, Case No. 1:23-cr-20364 (S.D. Fla. Feb. 16, 2024), ECF No. 50.
[6] Factual Proffer, United States v. Contreras Saab, Case No. 1:23-cr-20364 (S.D. Fla. Nov. 2, 2023), ECF No. 18.
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