Tribute to Gale Sayers and Criminal FCPA Plea by Sargeant Marine

Thomas Fox

Compliance Evangelist

Gale Sayers died Wednesday. For any serious student of the National Football League (NFL), Sayers will always be known as one of the greatest runners of all-time. His rookie season was one for the record books; scoring 22 touchdowns in a 14-game season and once scoring 6 touchdowns in the mud of the old Soldiers Field in Chicago against the San Francisco 49ers. According to his New York Times obituary, he led the league in all-purpose yards (rushing, receiving and runbacks) with 2,272 yards and was named to the all-league team for the first of five consecutive years. A series of knee injuries savaged his career and he only play 7 seasons, having made the All-Pro team five of those 7 years. Noted Chicago Bears fan David Rubenstein has said, “I encourage all to watch his highlight films, as there is truly incredible football.”

To later generations he is equally famous for his friendship with Brian Piccolo, a white player. They were the first inter-racial roommates in the history of the NFL. In this age of the President screaming white superiority and his MAGA hat wearing followers salivating like Pavlovian dogs, it recalls a time when things were different. Their story was made more famous by Sayers book, I Am Third and the movie Brian’s Song which related their friendship and Piccolo’s slow death from cancer.

Although I still think Jim Brown was the greatest runner of all-time, Sayers is up there in the conversation, even with his abbreviated career. He could start and stop in a dime faster and better than anyone I have ever seen. But more than all his football greatness was his humanity. If you want the smallest sense of it, I encourage you to read I Am Third. I can still remember checking this out of my school library (when there were such things) and reading it. Green Bay Packer season ticket holder Mike Flanagan has said, “his “I love Brian Piccolo” speech – and all that it reflected – felt unprecedented in sports in the 60s and would have been incredible in any decade.”

Tuesday there was also a Foreign Corrupt Practices Act (FCPA) enforcement action. According to the Department of Justice (DOJ) Press Release, “Sargeant Marine Inc. (Sargeant Marine), an asphalt company formerly based in Boca Raton, Florida, pleaded guilty today to conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) and agreed to pay a criminal fine of $16.6 million to resolve charges stemming from a scheme to pay bribes to foreign officials in three South American countries.” Apparently never having received the Memo that the FCPA prohibited bribery of foreign government officials back in 1977, the company engaged in massive and ongoing criminal conduct from 2010 to 2018. “The company paid millions of dollars in bribes to foreign officials in Brazil, Venezuela, and Ecuador to obtain contracts to purchase or sell asphalt to the countries’ state-owned and state-controlled oil companies, in violation of the FCPA.”

Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division said, “With today’s guilty plea, Sargeant Marine has admitted to engaging in a long-running pattern of paying bribes to corrupt officials in three South American countries to obtain lucrative business. Today’s resolution, together with charges the department has brought against individuals involved in Sargeant Marine’s illegal schemes, demonstrates the department’s continuing commitment to holding companies and their executives responsible for international corruption.” Acting US Attorney Seth DuCharme of the Eastern District of New York said, “Today’s resolution is the result of a multi-year, multi-national, collaborative effort to root out corruption perpetrated by an American company in three countries. We will continue to investigate and prosecute any company that corrupts foreign government officials in order to gain a competitive edge, as well as any of their executives and employees who participate in those efforts.” Assistant Director Calvin Shivers of the FBI’s Criminal Investigative Division said, “Sargeant Marine Inc. attempted to get ahead of competitors by paying bribes to foreign officials in violation of the Foreign Corrupt Practices Act.  As today’s guilty pleas demonstrate, the FBI will relentlessly investigate those attempting to cheat the market, and we will bring them to justice.”

The bribery and corruption was widespread throughout the region. According to the company’s admissions, it engaged in an eight-year scheme to bribe foreign officials in Brazil, Venezuela, and Ecuador. In Brazil, the bribery scheme involved corrupt payments to a Minister in the Brazilian government, a high-ranking member of the Brazilian Congress, and senior executives at Petróleo Brasileiro SA (Petrobras) to obtain valuable contracts to sell asphalt. The bribery scheme was based around fake consulting agreements with bribe intermediaries. “After receiving fake invoices, it then sent international wires from Sargeant Marine bank accounts to offshore bank accounts held in the names of shell companies controlled by the bribe intermediaries. The bribe intermediaries used a portion of the commissions to pay bribes to Brazilian government officials on Sargeant Marine’s behalf, either by wire to the officials’ offshore shell companies, or in cash in Brazil.”

In Venezuela, Sargeant Marine “bribed four Petróleos de Venezuela, S.A. (PDVSA) officials in exchange for inside information, and for their assistance in steering contracts to purchase asphalt from PDVSA to a Sargeant Marine nominee. The Sargeant Marine co-conspirators used code names to hide the identities of some of the PDVSA officials receiving the bribes, referring to them simply as “Oiltrader,” “Tony,” and “Tony 2” in emails and texts. The inside information was called “Chocolates.”” The bribery scheme was paid for (yet again) by entering into fake consulting agreements with an intermediary and wiring commission payments into US and offshore bank accounts controlled by the intermediary who then paid the PDVSA officials on behalf of Sargeant Marine.

In Ecuador, Sargeant Marine also admitted that it bribed an official at the state-owned oil company EP Petroecuador (Petroecuador) to secure a 2014 contract to supply asphalt. Once again the “company used the same tactics as in Brazil and Venezuela to conceal the bribe payments. In particular, it engaged a bribe intermediary with close ties to a decisionmaker at Petroecuador and then paid commissions to the bribe intermediary pursuant to a sham consulting agreement. The intermediary used the commission payments to pay the bribes to the Petroecuador official on Sargeant Marine’s behalf.”

Perhaps equally interestingly, the DOJ announced it was unsealing “charges against, and the guilty pleas of, five of the individuals who played a major role in the bribery scheme, including Daniel Sargeant, a senior executive of the company; Jose Tomas Meneses, a Sargeant Marine trader; Luiz Eduardo Andrade and David Diaz, consultants who acted as bribe intermediaries in Brazil and Venezuela, respectively; and Hector Nuñez Troyano, a former PDVSA official who received bribes in connection with the Venezuela contracts.  A sixth individual, Roberto Finocchi, also a Sargeant Marine trader, pleaded guilty in November 2017 for his role in the Brazil scheme.”

Th DOJ has yet to release any of the documents referenced in this blog post. When they are made available, I will take a deeper dive into this matter.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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