Posts Tagged With Cases of Interest

Financial Instrument Bid-Rigging/Antitrust Resolutions

This quarter, two New York-based broker-dealers, Banca IMI Securities Corp. (“Banca IMI”) and Industrial & Commercial Bank of China Financial Services, LLC (“ICBCFS”), pleaded guilty to criminal antitrust charges for their involvement in a bid-rigging conspiracy surrounding pre-release American Depository Receipts (“ADRs”).  Larry Meyers, the former head of Banca IMI’s securities lending desk, also pleaded guilty to related charges.

ADRs represent ordinary shares of publicly traded companies that are exclusively listed on foreign stock exchanges
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Merrill Lynch Commodities Inc. Enters into Corporate Resolution and Agrees to Pay $25 Million in Connection with Commodities Trading Practices

On June 25, 2019, DOJ announced that Merrill Lynch Commodities Inc. (“MLCI”), a global commodities trading business, entered into a non-prosecution agreement in connection with DOJ’s investigation into the market for precious metals futures contracts.  DOJ alleged that precious metals traders employed by MLCI provided misleading information to the futures markets by placing orders for futures contracts that the traders intended to cancel before execution.  DOJ maintained that these canceled orders created a misleading impression
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TechnipFMC Plc and U.S.-Based Subsidiary Resolve Foreign Bribery Case

On June 25, 2019, DOJ announced that TechnipFMC plc (“TFMC”), a publicly traded company in the United States and a global provider of oil and gas services, and its wholly owned U.S. subsidiary, Technip USA, Inc. (“Technip USA”), agreed to pay combined criminal penalties of more than $296 million to resolve foreign bribery charges with authorities in the United States and Brazil.  According to DOJ’s press release, between at least 2003 and 2013, Technip USA
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CEO of Public Commodities Trading Company Charged in $66 Million Accounting Fraud Scheme

On June 5, 2019, Venkata Meenavalli, the CEO of a publicly traded commodities trading company known as Longfin Corp. (“Longfin”), was indicted on charges of securities fraud.  Authorities maintain that Longfin purportedly engaged in sophisticated commodities trading and so-called “cryptocurrency” transactions, including “blockchain-empowered solutions.”  Prosecutors have alleged that the commodities transactions reported by Longfin were actually “sham” events between Longfin and separate entities that Meenavalli controlled, and that Longfin reported in its public filings with
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Opioid Manufacturer Insys Therapeutics Agrees to Enter $225 Million Global Resolution of Criminal and Civil Investigations

On June 5, 2019, authorities announced a $225 million global resolution of criminal and civil investigations into opioid manufacturer Insys Therapeutics, Inc. (“Insys”) in connection with the company’s marketing of the fentanyl spray Subsys.  Insys entered into a five-year deferred prosecution agreement, and operating subsidiary Insys Pharma, Inc. agreed to plead guilty to five counts of mail fraud.

According to charging documents, Insys used “speaker programs” to funnel bribes and kickbacks to practitioners in exchange
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Two Global Financial Institutions Pay More than $2.3 Billion to Resolve Multi-Jurisdiction Sanctions-Related Investigations

On April 9, 2019, officials announced that London-based Standard Chartered Bank (“SCB”) reached resolutions with a half-dozen Federal, State, and UK agencies (DOJ, the Manhattan District Attorney’s Office (“DANY”), the Federal Reserve Bank, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), the New York Department of Financial Services, and the U.K. Financial Conduct Authority) arising out of U.S. dollar transactions involving Iran and other sanctioned countries.  Following a six-year investigation, SCB, inter alia,
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Former Chief Financial Officer at Publicly Traded Transportation Company Charged with $245 Million Securities and Accounting Fraud Scheme; Two Other Defendants Previously Indicted Charged with Additional Offenses

On April 3, 2019, DOJ officials announced the indictment of the former CFO of publicly traded trucking company Roadrunner Transportation Systems, Inc. (“Roadrunner”) on numerous charges in connection with an alleged securities and accounting fraud scheme that resulted in the loss of over $245 million in shareholder value.  According to the indictment, former CFO Peter Armbruster and two former controllers of Roadrunner’s Truckload operating segment, Mark Woglsand and Bret Naggs, carried out a scheme to
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Fresenius Medical Care Agrees to Pay $231 Million in Criminal Penalties and Disgorgement to Resolve Foreign Corrupt Practices Act Charges

On March 29, 2019, DOJ officials announced a non-prosecution agreement (“NPA”) with Germany-based Fresenius Medical Care AG & Co. KGaA (“Fresenius”) to resolve a seven-year DOJ and SEC investigation into FCPA violations.  Fresenius admitted to paying bribes to public officials to obtain or retain business, failing to implement reasonable internal accounting controls, and failing to maintain accurate books and records in connection with its activities in several countries in Africa and the Middle East between
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Patrick Ho, Former Head of Organization Backed by Chinese Energy Conglomerate, Sentenced to Three Years in Prison for International Bribery and Money Laundering Offenses

On March 25, 2019, Patrick Ho was sentenced to three years in prison for his role in a scheme to bribe officials of Chad and Uganda.  Ho, the former head of a non governmental organization, admitted to paying the bribes to obtain business advantages for CEFC China Energy Company Limited (“CEFC China”), an international energy and banking conglomerate.  The schemes involved a $2 million bribe to the then-president of Chad to obtain oil rights, as
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Lumber Liquidators Enters into Corporate Resolution for Securities Fraud and Agrees to Pay $33 Million Penalty

On March 12, 2019, Lumber Liquidators Holdings Inc. entered into a deferred prosecution agreement with DOJ and agreed to pay $33 million for filing materially false and misleading statements to investors based on its compliance with formaldehyde regulations.  According to the DPA, in 2014, U.S. flooring suppliers notified the company that its Chinese laminate products were emitting high levels of formaldehyde.  Despite visiting the Chinese laminate supplier and learning that the supplier could not demonstrate
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Mizrahi-Tefahot Bank LTD. Admits Its Employees Helped U.S. Taxpayers Conceal Income and Assets

On March 12, 2019, Mizrahi-Tefahot Bank Ltd. (“Mizrahi-Tefahot”), one of Israel’s largest banks, entered into a deferred prosecution agreement (“DPA”) with DOJ to settle a cross-border tax investigation.  Mizrahi-Tefahot admitted that, from 2002 until 2012, its employees helped U.S. customers evade U.S. taxes by concealing ownership and control of assets at the bank.  As part of the DPA, Mizrahi-Tefahot agreed to pay $195 million, which included restitution to the United States, disgorgement of fees paid
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Former KPMG Executive And Former PCAOB Employee Convicted of Wire Fraud

On March 11, 2019, a jury convicted David Middendorf, the former National Managing Partner for audit quality at KPMG LLP (“KPMG”), and Jeffrey Wada, a former employee of the Public Company Accounting Oversight Board (“PCAOB”), of wire fraud charges in connection with a scheme to use confidential PCAOB materials to improve KPMG’s performance on PCAOB inspections.  At trial, the government asserted that, beginning in fall 2015, Wada—an inspections leader at the PCAOB—began passing confidential information
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Mozambique’s Former Finance Minister Indicted Alongside Other Former Mozambican Officials, Business Executives, and Investment Bankers in Alleged $2 Billion Fraud and Money Laundering Scheme that Victimized U.S. Investors

On March 7, 2019, a four-count indictment was unsealed charging three former senior Mozambican government officials, investment bankers, and business executives in connection with a $2 billion fraud and money laundering scheme.  According to the indictment, between 2013 and 2016 the defendants organized loans made to entities controlled by the Mozambican government.  The defendants allegedly defrauded U.S. investors by misrepresenting the purpose of the loans and the ability of Mozambique and its state-owned entities to
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Mobile TeleSystems PJSC and Its Uzbek Subsidiary Enter into Resolutions of $850 Million with the Department of Justice for Paying Bribes in Uzbekistan

On February 22, 2019, Mobile TeleSystems PJSC (“MTS”), the largest mobile telecommunications company in Russia and an issuer of publicly traded securities in the United States, and its wholly owned Uzbek subsidiary, Kolorit Dizayn Ink LLC (“Kolorit”), entered a deferred prosecution agreement and guilty plea, respectively, to resolve charges based on their roles in a scheme to pay bribes in Uzbekistan.  In total, the entities agreed to pay a penalty of $850 million.

The entities
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Former President and Former Chief Legal Officer of Publicly Traded Fortune 200 Technology Services Company Indicted in Connection with Alleged Multimillion Dollar Foreign Bribery Scheme

On February 14, 2019, a federal grand jury returned an indictment charging two former officers of Cognizant Technology Solutions Corporation (“Cognizant”), a publicly traded Fortune 200 technology services company, in connection with a foreign bribery scheme.  The indictment alleged that, in April 2014, the two officers—the company’s former president and chief legal officer—authorized a $2 million payment to government officials in India to obtain the permit necessary to open a new office campus.  The individuals,
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Chinese Telecommunications Conglomerate, Affiliates, and CFO Indicted in Separate Alleged Fraud Schemes

On January 28, 2019, indictments were unsealed in Seattle and Brooklyn against Chinese telecommunications conglomerate Huawei Technologies Co. Ltd., a number of Huawei affiliates (collectively, “Huawei”), and Huawei’s CFO in connection with two separate alleged fraud schemes.  The indictment in Seattle charged two Huawei affiliates with theft of trade secrets, attempted theft of trade secrets, wire fraud, and obstruction of justice.  According to the indictment, between 2012 and 2014, Huawei undertook concerted, company-wide efforts to
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Two Ukrainian Nationals Indicted in Computer Hacking and Securities Fraud Scheme Targeting U.S. Securities and Exchange Commission

On January 15, 2019, DOJ unsealed indictments charging two Ukrainian individuals with conspiring to hack into the SEC’s computer systems and profit by trading on critical information they stole.  The indictment alleges that, between February 2016 and March 2017, defendants hacked into the SEC’s Electronic Data Gathering, Analysis and Retrieval (EDGAR) system and stole thousands of files, including annual and quarterly earnings reports containing confidential, nonpublic, financial information, which the SEC requires publicly traded companies
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IAV GmbH to Pay $35 Million Criminal Fine in Guilty Plea for Its Role in Emissions Issues

On December 18, 2018, officials announced that Germany-based automotive system maker IAV GmbH  (“IAV”) has agreed to plead guilty to one felony count and pay a $35 million criminal penalty in connection with its role in Volkswagen AG’s (“VW’s”) use of so-called “defeat device” software to improve performance on U.S. emissions tests.  According to court filings, starting in 2006, IAV worked with VW to design, test, and implement this software in VW- and Audi-branded diesel
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Former Head of Organization Backed by Chinese Energy Conglomerate Convicted of International Bribery, Money Laundering Offenses

On December 5, 2018, a federal jury in New York convicted the head of a Hong Kong- and Virginia-based nongovernmental organization on seven criminal counts for his participation in a multi-year, multimillion-dollar scheme to bribe top officials of Chad and Uganda to secure business advantages for a Chinese oil and gas conglomerate.  According to trial evidence and court documents, the defendant, Chi Ping Patrick Ho, was involved in two schemes: offering a $2 million bribe
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Four Defendants Charged in Panama Papers Investigation for Their Roles in Panamanian-Based Global Law Firm’s Decades-Long Scheme to Defraud the United States

On December 4, 2018, four individuals were charged with wire fraud, tax fraud, money laundering, and other counts in connection with a criminal scheme involving Mossack Fonseca & Co. (“Mossack Fonseca”), a Panamanian law firm.  According to the indictment, from 2000 through 2017, the defendants conspired with others to help U.S. taxpayers and clients of Mossack Fonseca to conceal assets from the IRS through fraudulent means.  These individuals allegedly used sham foundations and shell companies
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Venezuelan Billionaire News Network Owner, Former Venezuelan National Treasurer, and Former Owner of Dominican Republic Bank Charged in Money-Laundering Conspiracy Involving over $1 Billion in Bribes

On November 20, 2018, a Venezuelan billionaire who owns the Globovision news network was charged for his alleged role in a billion-dollar currency exchange and money-laundering scheme.  On the same day, a former Venezuelan national treasurer and former owner of Dominican Republic-based Banco Peravia pleaded guilty to charges for their roles in the scheme.  The charges involve a scheme to pay and receive bribes in exchange for the right to conduct foreign exchange transactions on
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MoneyGram International Inc. Agrees to Extend Deferred Prosecution Agreement, Forfeits $125 Million in Settlement with Justice Department and Federal Trade Commission

On November 8, 2018, officials announced that money services business MoneyGram International, Inc. (“MoneyGram”) had breached a 2012 deferred prosecution agreement (“DPA”) with DOJ in relation to its anti-fraud and anti-money laundering (“AML”) programs.  MoneyGram was charged in November 2012 with failing to maintain an effective AML program and aiding and abetting wire fraud, after MoneyGram agents and others engaged in fraud schemes through the company’s payment systems.  At the time, DOJ agreed to defer
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Malaysian Financier and Former Banker Indicted for Conspiring to Launder Billions of Dollars in Illegal Proceeds and to Pay Hundreds of Millions of Dollars in Bribes

On November 1, 2018, an indictment was unsealed charging two individuals with conspiring to violate the FCPA and to launder billions of dollars embezzled from Malaysia’s investment development fund, 1Malaysia Development Berhad (“1MDB”), between approximately 2009 and 2014.  The first individual, known as “Jho Low,” is a Malaysian financier, while the other, known as “Roger Ng,” is a former managing director at a New York-based financial institution (the “Financial Institution”).  On the same day that
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Former Executive Director at Venezuelan State-Owned Oil Company, Petroleos De Venezuela, S.A., Pleads Guilty to Role in Billion-Dollar Money Laundering Conspiracy

On October 31, 2018, a former executive director at the Venezuelan state-owned oil company, Petróleos de Venezuela, S.A. (“PDVSA”), pleaded guilty to one count of conspiracy to commit money laundering for his role in a billion-dollar international scheme to launder funds embezzled from PDVSA.  Abraham Edgardo Ortega, who was PDVSA’s Executive Director of Financial Planning, admitted as part of his plea that in his position with PDVSA, he accepted $5 million in bribes to give
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