Foreign Corrupt Practices Act: Enforcement Action Dataset

Initiation Date: 10/24/2016

Prosecuting Agency: U.S. Department of Justice

Type of Action: DOJ Criminal Proceeding

Docket or Case Number: 16-cr-60294

Court: S.D. Florida

Name of Prosecuting Attorneys:

Andrew Weissman, Chief, Fraud Section, Criminal Division
Jason Linder, Senior Trial Attorney, Fraud Section, Criminal Division
John-Alex Romano, Trial Attorney, Fraud Section, Criminal Division

US Assisting Agencies:

U.S. Securities and Exchange Commission
Federal Bureau of Investigation

Foreign Enforcement Action/Investigation: Unknown

Foreign Assistance:

Brazilian Law Enforcement Agency (BR)
Dominican Republic Law Enforcement Agency (DO)
South African Law Enforcement Agency (ZA)

Origin of the Proceeding: SEC subpoena

Whistleblower: Unknown

Case Status: Resolved

Summary

Embraer S.A., a company incorporated and headquartered in Brazil, was a large manufacturer of mid-size commercial and executive jets and supplier of defense aircraft to the Brazilian Air Force and other countries throughout the world. Embraer's shares were registered with the SEC and traded on the New York Stock Exchange.

Embraer Representations LLC ("Embraer RL") was a wholly-owned American Embraer subsidiary.

ECC Investment Switzerland AG ("Embraer AG") was a wholly-owned Swiss Embraer subsidiary.

Between 2005 and 2011, Embraer made bribe payments through third-party agents and a bank account held by Embraer RL to foreign government officials in the Dominican Republic, Mozambique, and Saudi Arabia. In all, Embraer paid approximately $6 million in illicit payments and reaped over $83 million in profits from the business obtained by the bribes. During roughly the same time period, Embraer made payments to a commercial agent in order to obtain a defense contract in India--the use of agents in securing defense contracts were proscribed under Indian law--then covered up the payments in accounting records by marking them under an unrelated but otherwise legitimate contract in a different country.

On October 24, 2016, the DOJ filed an information in the Southern District of Florida against Embraer alleging conspiracy to violate the anti-bribery and books and records provisions of the FCPA as well as direct violations of the internal controls provisions of the FCPA. On the same date, the company and the DOJ entered into a deferred prosecution agreement with a period of three years. Under the terms of that DPA, Embraer was ordered to pay a criminal fine of $107 million and to hire an independent compliance monitor for a term of three years.

In a related proceeding filed on the same date, the SEC brought a settled civil action against Embraer alleging violations of the anti-bribery, books & records, and internal controls provisions of the FCPA. Under the terms of the consent agreement, Embraer was enjoined from future violations of the FCPA, required to pay $83.8 million in disgorgement plus $14.4 million in prejudgment interest, and ordered to appoint an independent compliance monitor for a term of three years. The company may receive up to a $20 million credit depending on the amount of disgorgement Brazilian authorities will require in a parallel civil proceeding in Brazil.

Also on the same day, Embraer confirmed in a press release that it had reached a settlement with Brazilian authorities. Under the terms of that settlement, Embraer agreed to pay R$58 million in disgorgement to a Brazilian federal fund and R$6 million in penalties to the Brazilian Securities and Exchange Commission.

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Enforcement Action Dataset

Case Information

United States of America v. Embraer S.A.

Case Information

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