AIRCRAFT ENGINE MAINTENANCE CO. TO PAY $14 MILLION FOR PAYING BRIBES TO FOREIGN OFFICIALS

FROM:  U.S. JUSTICE DEPARTMENT 

Wednesday, December 10, 2014

Dallas Airmotive Inc. Admits Foreign Corrupt Practices Act Violations and Agrees to Pay $14 Million Criminal Penalty

Dallas Airmotive Inc., a provider of aircraft engine maintenance, repair and overhaul services based in Grapevine, Texas, has admitted to violations of the Foreign Corrupt Practices Act (FCPA) and agreed to pay a $14 million criminal penalty to resolve charges that it bribed Latin American government officials in order to secure lucrative government contracts.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Special Agent in Charge Diego Rodriguez of the FBI’s Dallas Division made the announcement.

A criminal information, filed today in federal court in the Northern District of Texas as part of the deferred prosecution agreement, charges Dallas Airmotive with one count of conspiring to violate the FCPA and one count of violating the FCPA’s anti-bribery provisions.

According to Dallas Airmotive’s detailed admissions in the statement of facts accompanying the deferred prosecution agreement, between 2008 and 2012, the company bribed officials of the Brazilian Air Force, the Peruvian Air Force, the Office of the Governor of the Brazilian State of Roraima, and the Office of the Governor of the San Juan Province in Argentina.  Dallas Airmotive used various methods to convey the bribe payments, including by entering into agreements with front companies affiliated with foreign officials, making payments to third-party representatives with the understanding that funds would be directed to foreign officials, and directly providing things of value, such as paid vacations, to foreign officials.

This case is being investigated by the FBI’s Dallas Field Office and is being prosecuted by Trial Attorney David M. Fuhr of the Criminal Division’s Fraud Section.  Assistant U.S. Attorney Michael C. Elliott from the U.S. Attorney’s Office for the Northern District of Texas has provided assistance in the case.  The department acknowledges the assistance of law enforcement counterparts in Brazil.  The Criminal Division’s Office of International Affairs also provided significant assistance.

FORMER VP OF CONTROL COMPONENTS INC. PLEADS GUILTY TO FOREIGN BRIBERY OFFENSE

FROM:  U.S. DEPARTMENT OF JUSTICE
Friday, June 15, 2012
Former Vice President at California Valve Company Pleads Guilty to Foreign Bribery Offense
WASHINGTON – David Edmonds, the former vice president of worldwide customer service at Rancho Santa Margarita, Calif.-based valve company Control Components Inc. (CCI), pleaded guilty today to violating the Foreign Corrupt Practices Act (FCPA), announced the Justice Department’s Criminal Division, the U.S. Attorney’s Office for the Central District of California and the FBI’s Washington Field Office.

Edmonds, who resides in San Clemente, Calif., pleaded guilty today before U.S. District Judge James V. Selna in Santa Ana, Calif., to a one-count superseding information charging him with making a corrupt payment to a foreign government official in Greece in violation of the FCPA.  According to court documents, CCI designed and manufactured service control valves for use in the nuclear, oil and gas, and power generation industries worldwide.

At sentencing, Edmonds, 59, faces up to 15 months in prison.  Sentencing is scheduled for Nov. 19, 2012.

Edmonds is the seventh former CCI executive to plead guilty to FCPA charges in connection with the company’s bribery scheme:

On May 29, 2012, Paul Cosgrove, CCI’s former head of worldwide sales, pleaded guilty to one count of making a corrupt payment to a foreign government official.
On April 17, 2012, Stuart Carson, CCI’s former president, and Hong “Rose” Carson, CCI’s former director of sales for China and Taiwan, each pleaded guilty to one count of making a corrupt payment to a foreign government official.

On April 28, 2011, Flavio Ricotti, CCI’s former vice president of sales for Europe, Africa, and the Middle East, pleaded guilty to one count of conspiring to violate the FCPA.
On Feb. 3, 2009, Richard Morlok, the former CCI finance director, pleaded guilty to one count of conspiracy to violate the FCPA.

On Jan. 8, 2009, Mario Covino, the former director of worldwide factory sales for CCI, pleaded guilty to one count of conspiracy to violate the FCPA.

Stuart and Rose Carson, Cosgrove, Covino, Morlok and Ricotti are scheduled to be sentenced later this year.  FCPA charges brought in April 2009 against Han Yong Kim, the former president of CCI’s Korean office, are pending.  An indictment merely contains allegations and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

On July 31, 2009, CCI pleaded guilty to a three-count criminal information charging the company with conspiracy to violate the FCPA and the Travel Act, and two substantive violations of the FCPA.  CCI was ordered to pay an $18.2 million criminal fine, placed on organizational probation for three years, and ordered to create and implement a compliance program and retain an independent compliance monitor for three years.  CCI admitted that from 2003 through 2007, it made corrupt payments in more than 30 countries, which resulted in net profits to the company of approximately $46.5 million from sales related to those corrupt payments.

The case is being prosecuted by Deputy Chief Charles G. La Bella and Trial Attorney Andrew Gentin of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Douglas McCormick and Gregory Staples of the U.S. Attorney’s Office for the Central District of California.  The case was investigated by the FBI’s Washington Field Office and its team of special agents dedicated to the investigation of foreign bribery cases.

BIZJET INTERNATIONAL RESOLVES FOREIGN CORRUPT PRACTICES ACT INVESTIGATION

The following excerpt is from the U.S. Department of Justice website:
Wednesday, March 14, 2012
Bizjet International Sales and Support Inc., Resolves Foreign Corrupt Practices Act Investigation and Agrees to Pay $11.8 Million Criminal Penalty
WASHINGTON – BizJet International Sales and Support Inc., a provider of aircraft maintenance, repair and overhaul (MRO) services based in Tulsa, Okla., has agreed to pay an $11.8 million criminal penalty to resolve charges related to the Foreign Corrupt Practices Act (FCPA) for bribing government officials in Latin America to secure contracts to perform aircraft MRO services for government agencies, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.

The department filed a one-count criminal information today charging BizJet with conspiring to violate the FCPA’s anti-bribery provisions and a deferred prosecution agreement in U.S. District Court for the Northern District of Oklahoma.
 
According to court documents, BizJet paid bribes to officials employed by the Mexican Policia Federal Preventiva, the Mexican Coordinacion General de Transportes Aereos Presidenciales, the air fleet for the Gobierno del Estado de Sinaloa, the air fleet for the Gobierno del Estado de Sonora and the Republica de Panama Autoridad Aeronautica Civil.  In many instances, BizJet paid the bribes directly to the foreign officials.  In other instances, BizJet funneled the bribes through a shell company owned and operated by a BizJet sales manager.  BizJet executives orchestrated, authorized and approved the unlawful payments.

Under the terms of the department’s agreement with BizJet, the department agreed to defer prosecution of BizJet for three years.  In addition to the monetary penalty, BizJet agreed to cooperate with the department in ongoing investigations, to report periodically to the department concerning BizJet’s compliance efforts, and to continue to implement an enhanced compliance program and internal controls designed to prevent and detect FCPA violations.  If BizJet abides by the terms of the deferred prosecution agreement, the department will dismiss the criminal information when the agreement’s term expires.

In addition, BizJet’s indirect parent company, Lufthansa Technik AG, itself a German provider of aircraft-related services, entered into an agreement with the department in connection with the unlawful payments by BizJet and its directors, officers, employees and agents.  The department has agreed not to prosecute Lufthansa Technik provided that Lufthansa Technik satisfies its obligations under the agreement for a period of three years.  Those obligations include ongoing cooperation and the continued implementation of rigorous internal controls.

The agreements acknowledge BizJet’s and Lufthansa Technik’s voluntary disclosure of the FCPA violations to the department and their extraordinary cooperation, including conducting an extensive internal investigation, voluntarily making U.S. and foreign employees available for interviews, and collecting, analyzing and organizing voluminous evidence and information for the department.  In addition, BizJet and Lufthansa Technik engaged in extensive remediation, including terminating the officers and employees responsible for the corrupt payments, enhancing their due-diligence protocol for third-party agents and consultants, and heightening review of proposals and other transactional documents for all BizJet contracts.

The case is being prosecuted by Trial Attorneys Daniel S. Kahn and Stephen J. Spiegelhalter of the Criminal Division’s Fraud Section.  Assistant U.S. Attorney Kevin Leitch from the Northern District of Oklahoma has provided assistance in the case.  The department has also worked closely with its law-enforcement counterparts in Mexico and Panama in this matter and is grateful for their assistance.  The ongoing investigation is being assisted by the FBI’s Washington Field Office.