The Foreign Corrupt Practices Act (“FCPA”), codified in 15 U.S.C. §§ 78dd-1, et. seq., prohibits certain classes of persons and entities from paying foreign government officials to assist in obtaining or retaining business. Specifically, persons and entities may not corruptly use any means of instrumentality of interstate commerce in furtherance of any offer or payment of money or thing of value to any person, while knowing that the money offered is meant to influence a foreign official in his or her official capacity.
Recently, the FCPA made headlines through its involvement in the prosecution of a bribery and money laundering scheme. Two Columbian businessmen – Alex Nain Saab Moran and Alvaro Pulido Vargas – allegedly bribed Venezuelan officials between 2011 and 2015 with payment for fake shipments of construction materials that were never sent to the country after securing a contract to build low-income housing. Funds exceeding $350 million travelled from Venezuela through the U.S. correspondent banking system, and Florida bank accounts collected approximately one half million dollars in tainted funds.
Because money laundering statutes prohibit the use of the U.S. banking system for transactions involving funds from specified unlawful activity, the government claimed jurisdiction over the case. Included within the money laundering statutes, according to the government’s indictment, are crimes against foreign governments and violations of the FCPA. Specific FCPA provisions criminalize actions taken in the U.S. to promote foreign bribery schemes. Thus, although Department of Justice (“DOJ”) prosecutors did not accuse Moran and Vargas of coming to the United States, their supposed involvement in a conspiracy with three other unnamed people – two of whom they allegedly conspired with in Miami during a meeting – subjected them to FCPA prosecution. Furthermore, prosecutors believe that these two individuals reimbursed another co-conspirator for “expenses” related to the scheme by wiring money to his Florida account.
Prosecutors charged Moran and Vargas with one count of conspiracy and seven counts of money laundering. The Treasury’s Office of Foreign Assets Control (“OFAC”) also sanctioned them and several of their companies, contending that these men bribed their way into various other government contracts, including providing food for the country’s nutritional relief program. Moran and Vargas then allegedly inflated invoices to maximize profit, used payments for bribes, and imported food of poor quality for the program. OFAC sanctions also included eight other individuals, including Moran and Vargas family members, three stepsons of Venezuelan President Nicolas Maduro, and José Gregorio Vielma Mora, the former governor of the Venezuelan state of Táchira.
Ultimately, the prosecution of Moran and Vargas demonstrates the virtually unlimited ability of the United States government to reach beyond its borders in prosecuting FCPA matters. With that in mind, DOJ prosecutors will likely continue casting a wide net over potential violators – even those who have never set foot on American soil.
Pietragallo’s Doug Rosenblum rode his bicycle this weekend for the American Cancer Society’s Bike-A-Thon from Philadelphia to Atlantic City, New Jersey. Doug rode as a part of Team Jefferson Health. The American Cancer Society’s “Bike-A-Thon” is a fund-raising event featuring four start-points with six route options and each rider is encouraged to raise at least… Read more »Read More
Pietragallo Gordon Alfano Bosick & Raspanti, LLP is pleased to announce the election of its newest partner, Douglas K. Rosenblum, in its Philadelphia office. Mr. Rosenblum, a former prosecutor and certified fraud examiner, is an accomplished attorney with experience in all aspects of White Collar Criminal Defense and Federal and State Qui Tam Litigation. Mr. Rosenblum… Read more »Read More
On Tuesday, August 27, Pietragallo’s Shelly Pagac will be speaking at the Allegheny County Bar Association’s CLE: WLD Summit: Advancement and Retention of Women in the Legal Profession. This four-credit summit is focused on the advancement and retention of women in the legal profession and will include three groups sessions and one hour of breakout… Read more »Read More
Joseph L. Gordon will be presenting on “OSHA’s Ten Most Common Violations – An Insider’s Perspective on Easy Solutions to Overlooked Hazards” at The Pennsylvania State Council of SHRM’s 2019 State Conference in State College, PA. Joe will be a co-presenter with Nicholas DeJesse, an Assistant Regional Administrator with OSHA.Read More