Enforcement Action

 

Docket or Case Number:    14-cr-00052

Court:    D. Connecticut

Initiation Date:    03/19/2014  Information

Prosecuting Agency:    US Department of Justice

Name of Prosecuting Attorneys:   

  • Jeffrey H. Knox, Chief, Fraud Section, Criminal Division
  • Daniel S. Kahn , Trial Attorney, Fraud Section, Criminal Division
  • David E. Novick , Assistant United States Attorney
  • Michael J. Gustafson , First Assistant U.S. Attorney

Assisting Agencies:    Federal Bureau of Investigation , U.K. Serious Fraud Office , Switzerland Attorney General's Office , Komisi Pemberantasan Korupsi (Corruption Eradication Commission)

Type of Action:    DOJ Criminal Proceeding

Origin of the Proceeding:    N/A

Whistleblower:    Unknown

Case Status:    Resolved


Summary

Marubeni was a trading company headquartered in Japan that did business all over the world, including Indonesia. Power Company, headquartered in France, was in the business of providing power generation and transportation related services around the world.

From 2002 to 2009, Marubeni, Power Company and several of its subsidiaries made corrupt payments to a Member of Parliament in Indonesia, officials at Indonesia's state-owned and state-controlled electricity company, Perusahaan Listrik Negara ("PLN"), and other foreign officials. The purpose of the bribes was to secure a $118 million contract, known as the Tarahan project, for Marubeni and Power Company to provide power-related services to the citizens of Indonesia. In order to conceal the bribes, Marubeni and Power Company retained two consultants "Consultant A" and "Consultant B," who would pay bribes to the Indonesian officials.

On March 19, 2014, the DOJ filed an information against Marubeni, charging the company with conspiracy to violate the anti-bribery provisions and violating the anti-bribery provisions of the FCPA. At the same time, Marubeni entered into a plea agreement with the DOJ, agreeing to pay a $88,000,000 fine.

In a related action, David Rothschild plead guilty to one count of conspiracy to violate the FCPA.

Country(ies) involved:    Indonesia

Sanction to Bribe Ratio:    N/A

Sanction to Revenue Ratio:    $88,003,200 / $118,000,000 = 74.58 %

Sanction to Profit Ratio:    N/A

Number of Related Enforcement Actions (Including This Enforcement Action):    7

Country(ies) involved:    Bahamas, Egypt, Indonesia, Saudi Arabia, Taiwan

Total $ Bribery Payments:    $75,000,000

Total $ Revenue Generated from Bribery:    $4,000,000,000

Total $ Profit Earned or Expenses Avoided from Bribery:    $296,000,000

Total $ Monetary Sanctions:    $860,294,800

Sanction to Bribe Ratio:    $860,294,800 / $75,000,000 = (1147.06 %)

Sanction to Revenue Ratio:    $860,294,800 / $4,000,000,000 = (21.51 %)

Sanction to Profit Ratio:    $860,294,800 / $296,000,000 = (290.64 %)

Name:    Marubeni Corporation

Place of Incorporation:    Japan

HQ Country(ies):    Japan

Entity Type:    Public Company

FCPA Claims:    Anti-Bribery, Conspiracy (18 U.S.C. 371) ; Anti-Bribery, Primary, Other (15 U.S.C. § 78dd-3) ; Anti-Bribery, Aiding and Abetting/Causing (18 U.S.C. § 2, 15 U.S.C. §§ 78dd-1, 78dd-2, and/or 78dd-3)

Related Claims:    N/A

Statutory Basis for FCPA Jurisdiction:    Conspirator ; Foreign Nationals and Entities ; Aider & Abettor/Cause/Control Person

Period of Bribery:   2005 - 2009

Total Bribery Payments:    N/A

Total Revenue Generated from Bribery:    $118,000,000

Total Profit Earned or Expenses Avoided from Bribery:    N/A

Country(ies) involved:    Indonesia

Officials Potentially Influenced (Name; Title; Organization): 

  • Name N/A, Official; Perusahaan Listrik Negara ("PLN")
  • Official 1; Member of Parliament; Indonesian Parliament

Defendant-Related Entities Involved in the Misconduct:    N/A

Third-Party Intermediary:   

  • Consultant A , Agent/Consultant/Broker
  • Consultant B , Agent/Consultant/Broker

Type of Bribe:   Money

Cash, Wire or Check:    Wire Transfer

Purpose of Bribe:    Obtain/retain business

TRANSACTION OVERVIEW
Marubeni Corporation and Power Company bribes to Indonesian officials

Period of Bribery:   2005 – 2009

Total Bribery Payments:    N/A

Total Revenue Generated from Bribery:    $118,000,000

Total Profit Earned or Expenses Avoided from Bribery:    N/A

Country(ies) involved:    Indonesia

Officials Potentially Influenced (Name; Title; Organization):  

  • Official 1; Member of Parliament; Indonesian Parliament;
  • Name N/A, Official; Perusahaan Listrik Negara ("PLN");

Defendant-Related Entities Involved in the Misconduct:    N/A

Third Party Intermediary:    Consultant A - Agent/Consultant/Broker
Consultant B - Agent/Consultant/Broker

Type of Bribe:   Money

Cash, Wire or Check:    Wire Transfer

Purpose of Bribe:    Obtain/retain business

Misconduct by Subsidiary?  Yes


Parent(s):   Marubeni Corporation

Subsidiary:  Marubeni Power Systems Corporation

  • Percentage of Ownership:    100.00 %
  • Direct or Indirect Ownership:    Unknown
  • Parent Had Knowledge of Sub’s Bribery?:    No
  • Subsidiary Expressly Alleged to Be Parent's Agent:    No
  • Parent Liable for Sub Misconduct?:    Yes

M&A Negotiated or Completed During Misconduct, Investigation, or Resolution?     No

N/A

Mitigating Factors Referenced by the Government (Company Defendants):

Defendant Self-Report Cooperation Voluntary Remedial Measures Misconduct Limited to Low Level Individuals Other factors
Marubeni Corporation        

Aggravating Factors Referenced by the Government (Company Defendants):

Defendant Insufficient Cooperation Insufficient Remedial Measures
Marubeni Corporation

Total Monetary Sanctions for the Action:    $88,003,200

Case Status:    Resolved


Disposition:    Plea Agreement

Date of Disposition:    03/19/2014

Marubeni Corporation

—  Total Monetary Sanctions for Defendant:    $88,003,200

—  Organizational Probation:    None

—  Compliance Obligation:    Yes

—  Reporting Obligation:    No reporting

—  Admission of Guilt/Acceptance of Responsibility:    Yes

No Document Title Date Category
5 Judgment 05/21/2014 Resolution