The Republic of Azerbaijan instituted a program in the mid-1990s to privatize its State-owned industries. Under that program, enterprises in certain industries, including oil and gas, telecommunications, and utilities could only be privatized if the President of Azerbaijan issued a special decree. One of those enterprises, in the oil and gas industry, was SOCAR, the State Oil Company of the Azerbaijan Republic, which owned Azerbaijan's substantial and extremely valuable oil deposits.
Under the privatization program, the Azeri government issued free vouchers to all Azeri citizens, which allowed them to bid for shares of industries to be privatized. Privatization vouchers were freely tradable and were bought and sold, typically with U.S. currency. Foreigners could also participate in the privatization program, but only if they purchased government-issued "options" for each voucher they held. The Azeri government sold these options at an official price.
Beginning in or about the summer of 1997, Viktor Kozeny, a Czech national and a resident of The Bahamas, invested heavily in the Azeri privatization program through two companies he controlled, Oily Rock Group Ltd. ("Oily Rock") and Minaret Group Ltd. ("Minaret"). Specifically, Kozeny directed individuals working for him to purchase Azeri vouchers and options. Kozeny also recruited American individuals and institutions to invest in the privatization program. Collectively, Oily Rock, Minaret, Oily Rock shareholders, and co-investors are referred to as the "investment consortium."
Hans Bodmer was a Swiss citizen and a lawyer with the Swiss law firm von Meiss Blum & Partners. Bodmer represented the investment consortium in connection with its investment in Azeri privatization vouchers and options. From about August 1997 until about 1999, Hans Bodmer and others paid bribes and authorized the payment of bribes (a) to induce senior officials with the Azeri government to allow the investment consortium's continued participation in privatization, (b) to privatize SOCAR, (c) and to permit the investment consortium to acquire a controlling interest in SOCAR.
On August 5, 2003, the DOJ charged Bodmer in a two count indictment with conspiracy to violate the FCPA and conspiracy to commit money laundering. On July 8, 2004, on Bodmer's motion, the court dismissed the FCPA conspiracy count. Bodmer subsequently withdrew his previously entered plea of not guilty, and on May 19, 2009, the District Court accepted Bodmer's guilty plea. Bodmer testified against Frederic Bourke, an alleged coconspirator who was ultimately convicted. Sentencing was delayed several times in the hope that Bodmer could testify in the trial against Viktor Kozeny, who remained a fugitive. On March 7, 2013, the court finally entered final judgment against Bodmer. He was sentenced to time served after having spent 5 months in jail in South Korea prior to his extradition to the U.S. The court imposed a fine of $500,000 plus a mandatory special assessment of $100 and required him to forfeit $131,906.
