Former Executive Sentenced for Conspiracy to Bribe Panamanian Government Officials

On December 16, the U.S. District Court for the Northern District of California sentenced a former regional director of a Pennsylvania-based software and technology company for his involvement in a conspiracy to bribe Panamanian government officials to obtain technology contracts. U.S. District Judge Charles R. Breyer sentenced Vicente Eduardo Garcia to 22 months in prison for his role in the bribery scheme. In August 2015, Garcia pleaded guilty to conspiracy to violate the FCPA, admitting that in 2009 he and others conspired to bribe two Panamanian government officials directly and a third official through an agent in order to obtain a contract to provide a Panamanian state agency with a technology upgrade package. Garcia and his co-conspirators used sham contracts and false invoices to conceal the bribes, and Garcia personally received over $85,000 for arranging the bribes. Garcia previously settled with the SEC and agreed to pay disgorgement of $85,965 plus prejudgment interest.

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Former Russian Government Official Sentenced For Nuclear Energy Conspiracy Involving FCPA Violations

On December 15, a former Russian government official, Vadim Mikerin, was sentenced to 48 months in prison for conspiracy to commit money laundering in connection with $2 million in bribe payments he accepted to award government contracts with a Russian state-owned nuclear energy corporation. U.S. District Judge Theodore D. Chuang of the District of Maryland also ordered Mikerin, who resides in Maryland, to forfeit $2.1 million. Between 2004 and October 2014, Mikerin received bribe payments intended to improperly influence him in his role as a key official at a subsidiary of a Russian state-owned nuclear energy corporation and to secure improper business advantages for U.S. companies that did business with the subsidiary. Mikerin admitted that, in connection with the FCPA violations, he conspired with others to transmit approximately $2,126,622 from the United States to shell company bank accounts in Cyprus, Latvia and Switzerland. Mikerin also admitted to using consulting agreements and code words to conceal the bribes. Two of Mikerin’s co-conspirators – Daren Condrey and Boris Rubizhevsky – also pleaded guilty to conspiracy charges and are awaiting sentencing.

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DOJ Announces Racketeering Indictment Alleging Money Laundering Schemes

On December 10, the DOJ announced three unsealed indictments of a total of 20 defendants in connection with various money laundering schemes. Fifteen of the defendants were arrested and taken into custody, while the remaining individuals are still being sought by authorities.

The first indictment alleges that the former president and CEO of an Orange County, California bank and five other individuals, as members of a narcotics trafficking and international money laundering organization, violated the Racketeer Influenced and Corrupt Organizations Act (RICO) by participating in schemes to launder drug proceeds. According to the DOJ, the former bank official used his position, insider knowledge, and connections to “promote and facilitate money laundering transactions involving members and associates of the enterprise.” The DOJ alleges that the six defendants (i) arranged to convert purported drug proceeds, in the form of cash provided by an undercover informant, into cashier’s checks made out to a company the informant claimed to own; (ii) proposed to an informant that the informant and his boss purchase a controlling interest in the Orange County bank to more easily facilitate money laundering operations; and (iii) proposed to set up a foundation in Liechtenstein to be used, in part, to launder the informant’s drug sale proceeds. Read more…

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DOJ Announces Sentencing of Former Secret Service Agent for Involvement in Silk Road Investigation

On December 7, the DOJ announced that a former Secret Service agent was sentenced to 71 months in prison on charges of money laundering and obstruction of justice. Between 2012 and 2014, the former agent conducted forensic computer investigations from the Northern District of California to locate, identify, and prosecute persons involved in operating Silk Road, a covert online marketplace for illicit goods, as part of the Baltimore Silk Road Task Force. As part of his guilty plea, the agent admitted to using account information from a January 2013 search and arrest of a Silk Road customer support representative to “reset passwords and pins of various accounts on Silk Road and move approximately 20,000 bitcoin, at the time worth approximately $350,000, from those accounts into a bitcoin ‘wallet’ [he] controlled.” The former agent also admitted to (i) moving stolen bitcoin money into an account on a Japan-based online digital currency exchange; (ii) liquidating the bitcoin into $820,000 in U.S. currency and transferring those funds into a personal investment account in the U.S.; (iii) using the customer support representative’s access to Silk Road to steal bitcoin, which limited the investigation of Silk Road; and (iv) making false and misleading statements to both prosecutors and investigators involved in the San Francisco grand jury investigation into his activity. In addition to the prison sentence, the court ordered the former agent to forfeit more than $650,000. The Secret Service agent is the second federal agent to be sentenced this year in connection with the Baltimore Silk Road Task Force’s investigation into the Silk Road.

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DOJ Charges 16 Additional Individuals with FIFA-Related Corruption; Swiss Authorities Arrest Two High-Ranking FIFA Members

On December 3, the DOJ charged an additional 16 individuals in connection with its ongoing corruption investigation into FIFA. The new indictment included a number of high ranking FIFA members, including Alfredo Hawit, the president of the Confederation of North, Central America and Caribbean Association Football (CONCACAF) and vice-president of FIFA, and Juan Angel Napout, the president of the South American Football Confederation (CONMEBOL) and a member of the FIFA executive committee. Both of these individuals were arrested by Swiss authorities in Zurich and are opposing extradition to the United States.

With the additional 16 individuals, a total of 41 people and entities have been charged as part of the DOJ’s ongoing investigation.

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