Enforcement Actions Against Individuals
Trends/Takeaways From Enforcement Actions Against Individuals
Recent enforcement actions against government officials and company executives underscore the Department of Justice’s (DOJ) commitment to holding individuals accountable for violations of anti-corruption statutes. The actions detailed below illustrate several trends in DOJ’s enforcement priorities, including DOJ finding evidence of the crimes on encrypted messaging services, prosecuting individuals before, during, and after the resolution of actions against affiliated corporate entities, and attempting to extend US anti-corruption efforts to matters where the connection to the US is limited by using money laundering laws to charge individuals with the unlawful expenditure of bribe proceeds in the US.
1. Former Coal Company Executive
On March 29, 2022, a grand jury in the Western District of Pennsylvania indicted Charles Hunter Hobson, a former Vice President of Pennsylvania-based coal company Corsa Coal Corp (Corsa Coal), on violations of conspiracy, FCPA, money laundering, and wire fraud laws. The indictment alleged that Hobson conspired with others, including another former Corsa Coal executive, Fred Cushmore, to pay bribes to government officials in Egypt to obtain and retain business with an Egyptian state-owned and controlled company, Al Nasr Company, for Coke and Chemicals (Al Nasr). The scheme allegedly involved paying commissions to Corsa Coal’s sales agent in Egypt, who passed on a portion of those commissions to Al Nasr officials in exchange for coal contracts and other business advantages, such as inside, non-public information about Corsa Coal’s competitors’ bids to sell coal to Al Nasr.
The indictment also alleged that Hobson and others used encrypted messaging services as well as personal email accounts in connection with the alleged bribery scheme and that Hobson conspired to secretly receive a portion of the commissions paid to the sales intermediary as kickbacks. In total, Corsa Coal paid the Egyptian officials approximately $4.8 million, and Al Nasr paid Corsa Coal approximately $143 million in connection with the company’s awarded contracts.
Hobson pleaded not guilty on April 19, 2022, and as of November 2022, the case has not gone to trial. Cushmore has pleaded guilty to one count of conspiracy to violate the anti-bribery provisions of the FCPA for his involvement in the same alleged bribery scheme. He has not yet been sentenced.
2. Former Comptroller General of Ecuador
On March 24, 2022, Carlos Ramon Polit Faggioni, the former Comptroller General of Ecuador, was indicted in the Southern District of Florida on conspiracy and money laundering charges related to a foreign bribery scheme. The indictment alleged that between approximately 2010 and 2016, Polit solicited and received over $10 million in bribe payments from Odebrecht S.A., a Brazil-based construction conglomerate, in exchange for using his official position to prevent the comptroller’s office from imposing large fines on Odebrecht. Polit also allegedly received a bribe from an Ecuadorian businessman in or around 2015 in exchange for assisting the businessman and his company in connection with certain contracts from Ecuador’s state-owned insurance company, Seguros Sucre S.A.
Additionally, the indictment alleged that from around 2010 until at least 2017, Polit directed another member of the conspiracy to launder certain payments through Florida-based real estate companies. Many of these Florida companies were registered in the names of associates of Polit’s, often without the associates’ knowledge. The conspirators also allegedly used funds from the bribery scheme to purchase restaurants, a dry cleaner, and other businesses.
Polit has pleaded not guilty and awaits a May 2023 trial date. The charges against Polit came more than five years after Odebrecht S.A. pleaded guilty in the Eastern District of New York to conspiring to violate the anti-bribery provisions of the FCPA in connection with a broader scheme to pay nearly $800 million in bribes to public officials in 12 countries, including Ecuador.
3. Two Former Senior Venezuelan Prosecutors
On March 8, 2022, Daniel D’Andrea Golindano and Luis Javier Sanchez Rangel, two former prosecutors with the Venezuelan Attorney General’s Office, were charged in the Southern District of Florida with conspiracy and money laundering charges. The Venezuelan Attorney General’s Office had been investigating contractors and officials for corruption involving contracts with Petróleos de Venezuela, S.A., Venezuela’s state-owned and controlled energy company. D’Andrea and Sanchez allegedly received bribes from an unnamed Venezuelan contractor in exchange for using their official positions to exert influence and forego seeking criminal charges against Venezuelan contractors and officials.
As part of this scheme, D’Andrea, Sanchez, and unnamed co-conspirators allegedly arranged private meetings with the Venezuelan contractor to discuss responses to the Venezuelan criminal investigation relating to that contractor and an unnamed Venezuelan government official. The indictment also claims that the conspirators created invoices falsely showing that the contractor owed one million US dollars to an equipment supplier to cover up D’Andrea’s and Sanchez’s receipt of a bribe of that amount.
D'Andrea and Sanchez allegedly laundered this bribe payment through bank accounts in the Southern District of Florida, where they spent it, including on the purchase of a car and the rent of an apartment. Notably, this is the only connection this case has to US jurisdiction.
As of November 2022, the defendants remained at large.
4. Former Goldman Sachs Investment Banker
On April 8, 2022, Chong Hwa (Roger) Ng, a Malaysian citizen and former Managing Director at Goldman Sachs, was convicted by a jury in the Eastern District of New York of conspiring to violate the FCPA’s anti-bribery and books and records provisions and conspiring to commit money laundering. The jury found Ng guilty on all counts.
Ng was indicted in connection with anti-corruption investigations into 1Malaysia Development Berhad (1MDB)—a sovereign wealth fund for Malaysia—by civil and criminal authorities across multiple jurisdictions, including the US, UK, Malaysia, Singapore, and Luxembourg. The DOJ has accused various businesspeople and Malaysian government officials of channeling billions of US dollars from 1MDB funds to various sources, including for the purpose of paying bribes to foreign officials. Specifically, Ng was accused of laundering illegally diverted 1MDB funds through the US financial system for the personal benefit of various co-conspirators, in order to buy luxury real estate in Manhattan, artwork from the Christie’s auction house in New York, millions of dollars of jewelry and other luxury items, and the funding of major Hollywood films, including the 2013 film “The Wolf of Wall Street.”
Ng was convicted for attempting to have Goldman Sachs obtain and retain business from 1MDB by providing bribes to government officials in Malaysia and in Abu Dhabi. Ng’s actions allegedly were connected to Low Taek Jho, a now-fugitive Malaysian businessman and socialite, who remains a key figure for investigations into 1MDB. Ng facilitated three bond offerings in 2012 and 2013 that raised a total of approximately $6.5 billion for 1MDB, which ultimately earned Goldman Sachs hundreds of millions of dollars in fees and revenue. According to the indictment, more than $2.7 billion was misappropriated and distributed to the co-conspirators and used to pay bribes and kickbacks to government officials in Malaysia and Abu Dhabi.
Ng is estimated to have received $35 million for his role in this scheme. As of November 2022, Ng still awaited sentencing. Ng also has charges pending in Malaysia.