In March 2024, the Department of Justice (DOJ) announced the resolution of an FCPA enforcement action involving the Swiss trading firm Gunvor S.A. The enforcement action comes in with a $661 million penalty against the company, which has pleaded guilty to bribing Ecuadorian government officials through the 2010s in exchange for intelligence about upcoming business contracts with the state-owned oil company of Ecuador. The matter was resolved via a Plea Agreement. Information detailing the company’s conduct was also issued.
- Introduction
According to the DOJ Press Release, “Gunvor entered into a plea agreement with the government and pleaded guilty to an information charge charging the company with conspiracy to violate the anti-bribery provisions of the FCPA. Following the plea, the court sentenced Gunvor to pay a criminal monetary penalty of $374,560,071 and to forfeit $287,138,444 in ill-gotten gains. The sentence includes credits of up to one-quarter of the criminal fine for amounts Gunvor pays to resolve investigations by Swiss and Ecuadorean authorities into the same misconduct.”
In a DOJ Press Release, Acting Senior Counselor Brent S. Wible of the Justice Department’s Criminal Division said, “Over nearly a decade, Gunvor representatives bribed high-level government officials at Ecuador’s state-owned oil company to enter into business transactions with other state-owned entities that ultimately benefited Gunvor. As a result of this complex bribery scheme, Gunvor obtained hundreds of millions of dollars in illicit profits. Gunvor’s guilty plea demonstrates that the Criminal Division remains resolute in our efforts to root out bribery and official corruption. We will continue to hold both corporations and individuals who bribe foreign officials to account in coordination with our international partners.”
U.S. Attorney Breon Peace for the Eastern District of New York noted, “Today’s guilty plea and sentencing mark yet another example of this office’s efforts to combat widespread corruption.” He added, “Corruption erodes the public’s trust in their government, prevents government officials from acting in the best interests of the people they represent, and harms businesses that play by the rules, driving up consumer prices. The Justice Department, including my office, will not tolerate bribes paid by American companies or foreign companies misusing the U.S. financial system.”
Finally, Special Agent in Charge Jeffrey B. Veltri of the FBI Miami Field Office added, “Gunvor’s years-long bribery scheme involving high-level Ecuadoran officials was detrimental to the business environment and eroded the public’s trust and confidence in their government. This guilty plea and significant fine would not have been possible without significant cooperation from our international partners in the Cayman Islands, Colombia, Curacao, Ecuador, Panama, Portugal, Singapore, and Switzerland. This truly was an international effort.”
II.Information
The Information found that between 2012 and 2020, Gunvor and its co-conspirators paid more than $97 million to intermediaries, knowing that some of the money would be used to bribe Ecuadorean officials, including a high-ranking official at the country’s national energy concern, Petroecuador. Gunvor managers and agents attended meetings in the United States and elsewhere as part of the scheme. The bribe payments were routed through banks in the United States using shell companies in Panama and the British Virgin Islands controlled by Gunvor’s co-conspirators.
In exchange for these bribe payments, high-level Ecuadorian officials front companies for Gunvor to win the rights to a series of oil-backed loan contracts with Petroecuador. This structure allowed Gunvor and its co-conspirators to avoid a competitive bidding process and obtain contractual terms that they could not have otherwise. Gunvor also received confidential Petroecuador information in exchange for the bribes. Gunvor earned more than $384 million in profits from the contracts it obtained corruptly from Petroecuador.
The Press Release also noted the guilty pleas from multiple participants in the bribery scheme and recipients of the illegal payments. The DOJ obtained guilty pleas from the following individuals:
- Antonio Pere Ycaza, a former consultant for Gunvor, pleaded guilty to one count of conspiracy to violate the FCPA and one count of conspiracy to commit money laundering.
- Enrique Pere Ycaza pleaded guilty to one count of conspiracy to commit money laundering and to violate the FCPA.
- Raymond Kohut pleaded guilty to one count of conspiracy to commit money laundering.
- Nilsen Arias Sandoval, a former senior Petroecuador official, pleaded guilty to one count of conspiracy to commit money laundering.
Over this blog series, we will consider bribery schemes, resolutions, and lessons learned for compliance professionals.
