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 company resolved Angola-related bribery allegations with the U.S. Securities and Exchange Commission (SEC)? Which Hollywood megastar and self-proclaimed “King of the World” testified in a foreign bribery-related trial in federal court in Washington, D.C.? Why did the Paris Bar criticize internal investigation guidance from French authorities? The answers to these questions and more are here in our April 2023 Top 10.
1. Netherlands-Based Energy Services Company Resolves Angola Bribery Allegations
On April 26, 2023, SEC announced that Frank’s International N.V. (now known as Expro Group Holdings N.V.) agreed to pay nearly $8 million in combined disgorgement, prejudgment interest, and civil penalties to resolve allegations that its subsidiaries obtained oil and natural gas services contracts by bribing Angolan government officials. According to the SEC’s Order, from January 2008 through October 2014, Frank’s subsidiaries paid commissions to an Angolan sales agent, knowing that there was a high probability that the agent would use the commissions to bribe Angolan government officials on the company’s behalf. According to the SEC, the company retained the agent in Angola “without conducting due diligence and without a contract in place,” and the contracts with the agent were reviewed and approved by some of the company’s Texas‑based employees. The SEC alleged that the agent lacked the “relevant technical background” to perform the services but “had personal relationships with Angola Official and other … employees” of Angola’s national oil company, Sociedade Nacional de Combustíveis de Angola, E.P. (Sonangol). SEC alleged that the company violated the anti-bribery and accounting provisions of the U.S. Foreign Corrupt Practices Act (FCPA). The company neither admitted nor denied the SEC’s findings. According to the company’s April 26, 2023, Form 8-K, the U.S. Department of Justice (DOJ) declined to bring charges against the company, subject to a satisfactory resolution of civil claims with SEC.
2. Federal Jury Convicts Rapper of Tampering with U.S. Investigation into Malaysia Bribery Scheme
On April 26, 2023, DOJ announced that Prakazrel “Pras” Michel, a member of the U.S. hip hop group the Fugees, had been convicted by a jury in the District of Columbia of charges related to his role in orchestrating an unregistered, back-channel campaign to influence DOJ to drop an investigation into Low Taek Jho (a/k/a Jho Low), a Malaysian businessman suspected of masterminding the corruption and money laundering scheme that stole billions from Malaysia’s state-owned investment and development fund, 1Malaysia Development Berhad (1MDB). According to DOJ, Michel conspired with several others to engage in undisclosed lobbying campaigns at the direction of Low and the Vice Minister of Public Security for the People’s Republic of China to have the 1MDB investigation dropped and to have a Chinese national sent back to China. In August 2020 and October 2020, respectively, U.S. political consultants Nickie Lum Davis and Elliott Broidy pleaded guilty to related charges. DOJ further alleged that Michel and Low conspired to conceal a scheme to funnel millions of dollars of Low’s money into the 2012 U.S. presidential election. Michel was convicted of conspiracy, concealment of material facts, making false entries in records, witness tampering, and serving as an unregistered agent of a foreign power. In addition to its being named a Top 10 International Anti-Corruption Development, the trial was notable for the court appearance of Titanic actor Leonardo DiCaprio, who testified about interactions between Michel and Low (whom DiCaprio knew from, among other things, Low’s role in funding The Wolf of Wall Street) and Low telling him that he intended to donate “$20 to $30 million” to the 2012 presidential election (to which DiCaprio replied, “wow, that’s a lot of money”). (For more on the 1MDB case, see our July 2016, August 2016, June 2017, December 2017, May 2018, June 2018, August 2018, October 2018, February 2019, May 2019, April 2020, August 2020, August 2021, September 2021, December 2021, February 2022, April 2022, and March 2023 Top 10s.)
3. Switzerland Indicts Two Managers of a Saudi Oil Exploration Company in Connection with the 1MDB Scandal
In another criminal action relating to 1MDB, on April 25, 2023, Swiss prosecutors announced that they had indicted two managers of the Saudi oil exploration company, PetroSaudi, in connection with an alleged scheme to misappropriate at least $1.8 billion through a fake joint venture between 1MDB and PetroSaudi. According to prosecutors, the defendants and others used the fake JV to move $700 million from 1MDB into an account controlled by Jho Low, who later transferred $85 million to the PetroSaudi managers for their efforts. In a subsequent transaction, the managers allegedly helped convince 1MDB to loan an additional $830 million to the fake JV. The Swiss press release did not include the names of the defendants, but it did thank authorities in the United States of America, Malaysia, the United Kingdom, Singapore, Jersey, Canada, and Barbados for their “excellent cooperation” in the investigation.
4. Former Venezuelan National Treasurer Sentenced to 15 Years in Prison for Bribery and Money Laundering, While Venezuela Begins Anti-Corruption Sweep
- Former Venezuelan National Treasurer Sentenced. On April 19, 2023, DOJ announced that former Venezuelan National Treasurer, Claudia Patricia Díaz Guillén, and her husband, Adrian Jose Velásquez Figueroa, had each been sentenced to 15 years in prison following their December 2022 convictions in the Southern District of Florida on corruption-related money laundering charges. According to DOJ, the couple accepted and laundered over $136 million in bribes from a Venezuelan billionaire businessman, Raúl Gorrin Belisario, in exchange for providing Gorrin access to Venezuelan National Treasury bonds at advantageous exchange rates. Díaz and Velásquez allegedly used the funds to purchase multiple private jets and yachts and to fund a high-end fashion line they started in South Florida. In July 2022, Díaz lost her pre-trial motion to dismiss the charges against her. In November 2018, DOJ unsealed an indictment filed in the Southern District of Florida charging Gorrin with conspiring to violate the FCPA’s anti-bribery provisions and to launder millions of dollars. He is currently a fugitive residing in Venezuela. (For additional details, see our December 2020, January 2021, May 2022, July 2022, and December 2022 Top 10s.)
- Venezuela Begins Anti-Corruption Sweep. Allegations of corruption involving Venezuela’s national oil company, Petróleos de Venezuela, S.A. (PDVSA), have accounted for a significant portion of DOJ FCPA and FCPA-related money laundering cases in recent years. (See our June 2021, March 2022, August 2022, and February 2023 Top 10s for examples of recent PDVSA-related cases.) In April 2023, Venezuelan authorities began arresting individuals for corruption related to PDVSA and other state‑owned companies. In March 2023, Venezuela’s Anti-Corruption Police called for the prosecution of officials who “could be involved in serious acts of corruption and misappropriation of funds.” On April 2, 2023, Venezuelan authorities had reportedly arrested a total of 42 individuals, and by month’s end, over 60 individuals had reportedly been detained. One of the detainees died in custody in what Venezuela’s Attorney General Tarek William Saab described as a “regrettable suicide.”
5. Swiss Appeals Court Upholds Foreign Bribery Conviction of Israeli Billionaire
On April 4, 2023, the Geneva appeals court upheld the January 2021 conviction of Israeli diamond magnate Beny Steinmetz on corruption and forgery charges. Steinmetz allegedly schemed to pay about $8.5 million in bribes to a wife of former Guinean president Lansana Conté in an effort to secure exploration permits for iron ore in Guinea’s Simanco region. On appeal, Steinmetz argued that he was innocent, that Switzerland was an inappropriate venue for the charges, and that prosecutors had improperly blocked his legal team from speaking with Conté’s wife, who resides in the United States, prior to trial. Steinmetz’s spokesperson said he plans to appeal his conviction to Switzerland’s highest federal court. Steinmetz did secure a partial victory on appeal. The trial court sentenced Steinmetz to five years in prison and a 50 million Swiss franc fine, but the appeals court reduced the prison term from five years to three, suspending half.
6. Banknote Security Firm Convicted in Switzerland for Failing to Prevent Foreign Bribery
On April 27, 2023, the Office of the Attorney General of Switzerland (OAG) announced that it had ordered banknote security firm SICPA SA to pay CHF 81 million (approximately USD 90.6 million), including a CHF 1 million fine and CHF 80 million in compensation, following the company’s conviction for failing to take all organizational measures that were reasonable and necessary to prevent its employees from bribing public officials in the course of business in Brazil, Colombia, and Venezuela. According to OAG, the company’s organizational deficiencies were particularly apparent in the areas of risk management, corporate governance, and compliance. OAG also found a former sales manager of SICPA guilty of bribery of foreign public officials, stating that he “took advantage” of SICPA’s organizational deficiencies and sentencing him to a conditional prison term of 170 days. OAG also announced that it had discontinued related proceedings against the company’s CEO and main shareholder. According to reports, the investigation was initially opened in 2015 and extended to the CEO in 2021. The company entered into a related leniency agreement in Brazil in June 2021.
7. African Development Bank Launches Sensitization Campaign for New Whistleblowing Policy
On April 25, 2023, the African Development Bank Group (AfDB) announced the launch of a “sensitization campaign” to familiarize internal and external stakeholders with its new whistleblowing policy. The policy, approved by the AfDB Boards of Directors in January 2023, builds on a 2007 policy to set new standards to protect whistleblowers. Under the new policy, AfDB Boards members and elected officials will be subject to discipline for retaliation against whistleblowers who report fraud or corruption in AfDB’s operations. The new policy adds retaliation by external parties in the context of AfDB-financed operations to “Obstructive Practices,” which are grounds for debarment. AfDB’s Boards of Directors will review the policy’s implementation in five years. The sensitization campaign will be implemented over six months in AfDB’s headquarters, regional and country offices, and in Regional Member Countries.
8. Banking Group Publishes Anti-Corruption Guidance
On April 17, 2023, the Wolfsberg Group published an updated version of its Anti-Bribery and Corruption Compliance Programme Guidance (“ABC Guidance”). The Wolfsberg Group is an association of global banks that publishes frameworks and guidance for best practices to manage financial crime risks. The ABC Guidance describes a risk-based approach for developing and implementing an internal compliance program with effective anti-corruption and anti-bribery controls. The updated version, which supersedes the prior version from 2017, “incorporates learnings from enforcement actions since 2017” and “has been aligned to current and evolving legal regulatory expectations.” While the previous focus of the ABC Guidance was “corruption in the form of bribery,” the updated version appears to take a wider lens, considering a broader definition of corruption. The new version also expands the guidance on customer and transaction corruption risks and updates the list of red flags for bribery and corruption.
9. Paris Bar Criticizes French Guidance on Anti-Corruption Investigations
On April 13, 2023, the Paris Bar criticized guidance from the French Anti-Corruption Agency (AFA) and the National Financial Prosecutor’s Office (PNF) on best practices for internal anti‑corruption investigations (AFA/PNF Guidance). The AFA/PNF Guidance, which was released in March 2023, recommends that companies create formal investigation procedures that comply with labor and data-protection laws. It describes various protections for employees, including that the company should provide a written document to employees that explains their rights and duties in an internal investigation. It suggests that companies should not use the same attorneys for conducting an internal investigation and their representation in a related criminal proceeding. Finally, the AFA/PNF Guidance states that, pursuant to case law, the final report at the end of an internal investigation is not protected from disclosure. The Paris Bar criticized the suggestion that companies should not use the same attorneys for an internal investigation and their criminal defense, explaining that litigants have the right to an attorney of their own choosing and lawyers are equipped to prevent conflicts of interest by way of their ethical obligations. The Paris Bar also took issue with the AFA and PNF’s conclusion that case law would not protect final investigation reports from disclosure.
10. First Convictions in Tokyo Olympics Bribery Case
On April 21, 2023, former leaders of Aoki Holdings, an operator of an office wear chain in Japan, were convicted in Tokyo District Court of paying over 28 million yen in bribes to Haruyuki Takahashi, a member of the 2020 Tokyo Olympics organizing committee. These are the first convictions in the scandal, which has led to the indictment of fifteen individuals, including Takahashi himself, who was charged in September 2022. The court suspended the sentences of the former founder of Aoki and two other Aoki officials who were found guilty. The bribes were allegedly paid in return for the selection of Aoki to design the uniforms for the Japanese Olympic team.