Processing your request


please wait...

Enforcement Action Dataset

 

Initiation Date:    12/16/2016  Information

Prosecuting Agency:    U.S. Department of Justice

Name of Prosecuting Attorneys:   

  • Robert L. Capers, United States Attorney
  • Andrew Weissman, Chief, Fraud Section, Criminal Division
  • Alixandra Smith, Assistant United States Attorney
  • Julia Nestor, Assistant United States Attorney
  • Christopher Cestaro, Trial Attorney, Fraud Section, Criminal Division
  • David Last, Trial Attorney, Fraud Section, Criminal Division
  • David M. Fuhr, Trial Attorney, Fraud Section, Criminal Division
  • Lorinda Laryea, Trial Attorney, Fraud Section, Criminal Division
  • Kevin R. Gingras, Trial Attorney, Fraud Section, Criminal Division

Assisting Agencies:    U.S. Securities and Exchange Commission , Federal Bureau of Investigation , Department of Justice- Criminal Division’s Office of International Affairs , Swiss Attorney General's Office , Brazilian Federal Police (Departamento de Policia Federal) , Federal Prosecution Service (MPF)

Type of Action:    DOJ Criminal Proceeding

Docket or Case Number:    16-cr-643

Court:    E.D. New York

Origin of the Proceeding:    Unknown

Whistleblower:    Unknown

Case Status:    Resolved


Summary  Information

Odebrecht S.A. was a Brazilian conglomerate that conducted business in a variety of industries.

From 2001 to 2016, Odebrecht engaged in a scheme with others to make improper payments to government officials in Angola, Argentina, Brazil, Colombia, the Dominican Republic, Ecuador, Guatemala, Mexico, Mozambique, Panama, Peru, and Venezuela. The company paid the bribes in connection with over 100 projects in those twelve countries. To facilitate this scheme, Odebrecht established a standalone division within the company called the Division of Structured Operations that, according to the Information filed by the DOJ "effectively functioned as a bribe department with Odebrecht and its related entities." In all, Odebrecht paid approximately $788 million in bribes and made $3.336 billion in profits on the contracts obtained by those bribes in the 15 year period.

On December 16, 2017, the DOJ filed a single count Information against Odebrecht in the Eastern District of New York alleging conspiracy to violate the anti-bribery provisions of the FCPA. On December 21, the company entered into a plea agreement with the DOJ. Under the terms of the agreement, Odebrecht plead guilty to the conspiracy charge, agreed to pay a criminal fine of $2.6 billion, and agreed to appoint an independent compliance monitor for a term of three years. The $2.6 billion fine was to be divvied up by the United States, Brazil, and Switzerland. Assuming full payment of the the fine to Brazil and Switzerland, the share that Odebrecht is scheduled to pay to the United States is 10% of the total fine, or $260 million, plus any interest accrued before payment, which is due in June 2017. This fine represents a significant departure from the minimum guidelines range for the offense. The DOJ agreed that a 25% downward departure from the minimum fine under the sentencing guidelines was appropriate given the company's cooperation and remediation, but even that amount, $4.5 billion, was more than the company could afford. Due to inability to pay the full fine, the DOJ agreed to allow the company to pay only $2.6 billion. Subsequent negotiations between the company and the enforcement authorities resulted in a further diminution of the fine. In the sentencing memorandum filed by the government on April 11, 2017, the DOJ reduced the fine that Odebrecht must pay to the United States to $93 million due to the company's inability to pay the full fine.

In a related proceeding, Braskem S.A., a company controlled and partially owned by Odebrecht, entered into a plea agreement with the DOJ on December 21, 2016. Under the terms of the agreement, Braskem agreed to plead guilty to the conspiracy charge, pay a criminal penalty of $632,625,336.81 plus disgorgement of $325 million, strengthen its anti-corruption compliance policies and procedures, and hire an independent compliance monitor for a term of three years. The DOJ agreed to that the criminal penalty imposed represented a 15% downward departure from the minimum guidelines range based on the company's remediation and partial cooperation. Of the total criminal penalty imposed, Brakem will pay 15%, or $94,893,800.52, to the United States, 15% to Switzerland, and 70% to Brazil. The DOJ deemed that the disgorgement imposed in this proceeding would be satisfied by payment of $325 million in disgorgement in the parallel SEC proceeding.

In a related proceeding, Braskem entered into a consent agreement with the SEC on December 21, 2016. Under the terms of that agreement, Braskem was permanently enjoined from future violations of the FCPA, agreed to pay $325 million in disgorgement, and hire an independent compliance monitor for a term of three years. Payment of the $325 million disgorgement will be split between the United States and Brazil, with the United States receiving $65 million share contigent upon payment of the remainder to Brazil (if the company fails to pay the Brazilian share, the full amount will be due to the United States).

In a related proceeding, on February 27, 2019, the DOJ filed a sealed three count indictment in the Eastern District of New York against the former CEO of Braskem, Jose Carlos Grubisich, alleging conspiracy to violate the anti-bribery and books and records provisions of the FCPA as well as conspiracy to commit money laundering. Though the indictment was initially filed under seal, the DOJ announced the indictment on November 20, 2019, following the arrest of Grubisich. That case is ongoing.

Protected Content


Please Log In or Sign Up for a free account to access restricted features of the Clearinghouse website, including the Advanced Search form and the full case pages.

When you sign up, you will have the option to save your search queries performed on the Advanced Search form.