Designed for busy in-house counsel, compliance professionals, and anti-corruption lawyers, this newsletter summarizes some of the most important international anti-corruption law and enforcement developments from the past month, with links to primary resources. This month we ask: Which two New York officials were implicated in international bribery schemes? What compliance guidance did the U.S. Department of Justice (DOJ) provide regarding artificial intelligence (AI)? What penalties do Australian companies face for failing to prevent international bribery and what measures can they take to avoid liability? The answers to these questions and more are here in our September 2024 Top 10.
1. U.S. Agricultural Machinery Company Resolves Thailand Bribery Allegations
On September 10, 2024, the U.S. Securities and Exchange Commission (SEC) announced that Deere & Company had agreed to pay approximately $9.9 million in combined disgorgement, prejudgment interest, and civil penalties to resolve allegations that its wholly owned Thai subsidiary provided improper benefits to government officials in the Royal Thai Air Force, Department of Highways, and Department of Rural Roads, as well as employees of private companies, in order to win government contracts and sales partnerships worth millions of dollars, in violation of the FCPA’s accounting provisions. According to the SEC order, the improper benefits included cash payments, sham consulting fees, massage parlor visits, and international travel for government officials and their spouses. The order further states that SEC considered remedial acts promptly undertaken by the company—including terminating responsible employees, revising its Code of Business Conduct and relevant policies, and increasing its compliance trainings and communications—and the company’s cooperation during the investigation.
2. U.S. Oil Trader Found Guilty in Brazilian Bribery Scheme
On September 26, 2024, DOJ announced that a federal jury in the District of Connecticut had convicted former oil and gas trader Glenn Oztemel for his role in an eight-year alleged bribery scheme involving Brazil’s national oil company, Petroleo Brasileiro S.A. (Petrobras). Oztemel and his alleged co‑conspirators—Gary Oztemel (his brother) and Eduardo Innecco—were originally charged in February 2023. According to an August 2023 superseding indictment, between 2010 and 2018, Oztemel and his co-conspirators paid over $1 million in bribes to Petrobras officials in order to win lucrative contracts for two Connecticut-based commodities trading companies. The conspirators allegedly used coded language, personal email accounts, fictitious names, and encrypted messaging applications in furtherance of their scheme. The jury found Oztemel guilty of conspiracy to violate the FCPA, conspiracy to commit money laundering, three counts of violating the FCPA, and two counts of money laundering. Gary Oztemel pleaded guilty to money laundering in June 2024, while Innecco was arrested in France in May 2023 and is facing extradition to the United States. In December 2023, one of the Connecticut-based commodity trading companies, Freepoint Commodities LLC, entered into a deferred prosecution agreement (DPA) with DOJ, and a simultaneous resolution with the U.S. Commodity Futures Trading Commission (CFTC), to resolve allegations related to this same scheme.
3. Sitting New York City Mayor Charged for Accepting Benefits from Turkey
On September 26, 2024, the U.S. Attorney’s Office for the Southern District of New York announced the indictment of sitting New York City mayor Eric Adams on bribery, campaign finance, and conspiracy charges tied to nearly a decade of alleged payments and lucrative perks from Turkish nationals, including at least one Turkish official. Adams allegedly provided official favors in exchange for these payments and non-monetary benefits, including pressuring the New York City Fire Department to facilitate the opening of a 36-story Turkish consular building that had not passed a fire inspection. Adams allegedly sought and accepted illegal “nominee” or “straw” campaign donations from Turkish nationals funneled through U.S.‑based individuals or entities to create the appearance of compliance with campaign finance laws. Adams also allegedly circumvented New York City’s ban on corporate contributions by accepting money channeled through multiple corporate employees. All of these alleged fraudulent actions were compounded when Adams applied for and received more than $10,000,000 in public campaign funds under New York City’s matching funds program. (For a deeper dive into the case, read this interview with The Intelligencer.)
4. Top New York State Official Charged for Allegedly Laundering Benefits from Chinese Government
On September 3, 2024, the U.S. Attorney’s Office for the Eastern District of New York announced that Linda Sun had been charged in a multicount indictment accusing her of acting on behalf of the People’s Republic of China to influence the policies and practices of the state of New York and laundering millions of dollars in the process. Until 2023, Sun worked in various capacities for the state of New York, including serving as deputy chief of staff for the sitting governor, Kathy Hochul, and as an aid to the administration of Hochul’s predecessor, Andrew Cuomo. Sun and her family members are alleged to have received employment opportunities, event tickets, and Nanjing-style salted ducks, among other benefits, as part of the scheme. Sun allegedly laundered the monetary proceeds of this scheme to purchase New York property, currently valued at $4.1 million, a condominium in Honolulu, currently valued at $2.1 million, and luxury automobiles, including a 2024 Ferrari. Sun was charged with violating and conspiring to violate the Foreign Agents Registration Act (FARA), visa fraud, bringing in aliens, and money laundering conspiracy. Sun’s husband and co-defendant was also charged with money laundering conspiracy, as well as conspiracy to commit bank fraud and misuse of means of identification.
5. DOJ Updates Corporate Compliance Guidance on Artificial Intelligence and Whistleblowing
On September 23, 2024, DOJ Criminal Division Principal Deputy Assistant Attorney General (PDAAG) Nicole Argentieri announced changes to the Criminal Division’s Evaluation of Corporate Compliance Programs or ECCP (the “September 2024 ECCP”). Last revised in March 2023, the ECCP sets out a lengthy series of questions framed around several compliance topics and DOJ policies aimed to assist federal prosecutors in assessing the effectiveness of a corporation’s compliance program. The updates in the September 2024 ECCP focus on three areas: (1) mitigating the risks of artificial intelligence (AI) and other emerging technologies; (2) encouraging whistleblowing; and (3) ensuring compliance personnel and tools have adequate access to data to carry out their functions. The issues targeted by these revisions—in particular, AI and whistleblowing—have become a focus of the Criminal Division in 2024. The latest amendments to the ECCP further emphasize the need for companies to invest in responsible AI, strategic information sharing, and whistleblower‑friendly work environments. Although technically applicable only to the Criminal Division, Deputy Attorney General (DAG) Lisa Monaco has encouraged other DOJ components to follow the ECCP. (For more on the September 2024 revisions to the ECCP, see our client alert.)
6. Multiple U.S. Attorneys’ Offices Launch Pilot Whistleblower Programs Targeting White‑Collar Crime
Between September 13 and 16, 2024, several U.S. Attorneys’ Offices announced the launch of pilot whistleblower programs designed to increase tips on white‑collar crime. The offices include the Eastern District of New York, Northern District of Illinois, Southern District of Texas, District of Columbia, Eastern District of Virginia, District of New Jersey, and Southern District of Florida. These announcements follow on the heels of similar programs announced in the Central District of California (August 2024), Northern District of California (May 2024), and Southern District of New York (February 2024), as well DOJ’s pilot Corporate Whistleblower Awards Program (August 2024) and the DOJ Criminal Division’s Voluntary Self-Disclosure for Individuals Program (April 2024). The programs being piloted by the U.S. Attorneys’ Offices offer the possibility of a non-prosecution agreement (NPA) in exchange for voluntarily disclosed and previously unknown criminal activity. The U.S. Attorney-led pilot programs target individuals who participated in criminal activity and face criminal liability as a result. Although there is some variation among the different pilot programs, they all focus on bribery and fraud offences but exclude violations of the FCPA, which may be reported through the DOJ Criminal Division’s Voluntary Self‑Disclosure for Individuals Program.
7. Australia’s New “Failure to Prevent Bribery” Offense Goes into Effect
On September 8, 2024, Australia’s criminal offense of corporate “failure to prevent” foreign bribery came into force. Adopted by the Australian parliament in February 2024 as part of the Combatting Foreign Bribery Act, the offense makes companies liable for failing to prevent overseas corruption by employees, agents, contractors, subsidiaries, or anyone who performs services for the company. Penalties for failing to prevent the bribery of a foreign official include three times the value of the benefit obtained or 10% of the company’s annual turnover, whichever is greater. Companies can defend themselves against the charge by showing that they had “adequate procedures” in place to prevent bribery when the alleged corruption took place. In August 2024, the Australian government published guidance setting out six elements to assist corporations in establishing adequate procedures: (1) the control environment, (2) top-level management responsibilities, (3) risk assessment, (4) communication and training, (5) reporting, and (6) monitoring and review.
8. Brazil Supreme Court Allows the Retroactive Application of Non-Prosecution Agreements
On September 18, 2024, Brazil’s highest court decided that NPAs can be retroactively applied in cases that predate the law that introduced such resolutions to the country in 2020. The court’s decision allows the agreements to be used in cases that have not been through all the appeal stages and that involve crimes classified as non-violent and low risk to other people for which the minimum sentence is less than four years’ imprisonment. Thus, individuals convicted of a single count of bribery or money laundering could potentially qualify for a retroactive NPA, but not an individual convicted of both bribery and money laundering. The court’s order requires parties to discuss the possibility of extending an NPA to individuals in ongoing criminal trials or under investigation “at the first opportunity.” Prosecutors, defense counsel, and judges overseeing a case can all initiate an NPA discussion. Brazil’s prosecution service stated that it has signed nearly 18,000 NPAs since they became available in 2020.
9. London Court Overturns Conviction for Withholding Documents Requested in Congo Bribery Investigation
On September 16, 2024, Judge Nicholas Rimmer of Southwark Crown Court quashed the January 2020 conviction of Anna Machkevitch for failing to surrender material during the UK Serious Fraud Office’s (SFO) bribery investigation into the Eurasian Natural Resources Company (ENRC), a Kazakh mining company co-founded by her father. The SFO’s investigation focused on alleged fraud, bribery, and corruption surrounding mining contracts in the Democratic Republic of the Congo between 2009 and 2012. Although not a suspect herself, Machkevitch was the first person to have been convicted for failing to comply with a section 2 notice, the SFO’s tool for demanding cooperation from witnesses. The SFO closed its investigation into ENRC in August 2023, following a series of revelations of potential impropriety in how the agency handled the investigation. The SFO stated in July 2024 that it did not intend to oppose Machkevitch’s appeal.
10. Singapore’s Former Minister Convicted of Obtaining Gifts as a Public Servant and Obstruction of Justice
On September 24, 2024, former Singapore government minister S. Iswaran pleaded guilty to charges of obtaining gifts worth approximately USD 308,000 as a public servant and obstructing justice. We previously reported on Iswaran’s arrest as part of a criminal investigation into alleged corruption offenses by the Singapore authorities in our July 2023 Top 10. Iswaran originally faced 35 charges—two corruption charges under Singapore’s Prevention of Corruption Act, one charge for obstructing justice, and 32 other charges under Section 165 of Singapore’s Penal Code that prohibits public servants from accepting or obtaining anything of value, without consideration, from anyone with whom they are involved in an official capacity—and was due to begin trial on September 24, 2024, when he ultimately pleaded guilty to five charges—four under Section 165 of Singapore’s Penal Code and one for obstructing justice. Thirty other charges under Section 165 of the Penal Code will be taken into consideration for sentencing. The four Section 165 charges to which Iswaran pleaded guilty involved premium tickets for the 2017 Singapore Formula 1 Grand Prix, flights to and from Doha and a luxury hotel stay there, 14 bottles of alcohol, and a Brompton T Line bicycle worth approximately USD 6,044. Notably, the prosecution amended two of the original Prevention of Corruption Act charges to charges under Section 165 of Singapore’s Penal Code, before Iswaran pleaded guilty to them. (In an October 2022 parliamentary written reply, the Minister of Home Affairs and Minister of Law stated that unlike a charge under the Prevention of Corruption Act, for a Section 165 offense, “there is no need to further establish that [the item of value] was an inducement or reward for the public servant to act in [a particular] manner.”) The obstruction of justice charge relates to Iswaran’s retrospective payment for the cost of a business class ticket from Doha to Singapore he took in December 2022, which was at the expense of the chairman of the local promoter for Singapore’s Formula 1 Grand Prix (after being made aware that the Singapore authorities had seized a passenger manifest for a flight on that individual’s private jet to Doha that Iswaran was on, when investigating a separate matter in May 2023). The prosecution noted Iswaran’s retrospective payment had the “tendency to obstruct the course of justice” because it made it less likely that the Singapore authorities would investigate him. This case marked a rare instance of a corruption probe involving a government minister in Singapore. It also marks the first conviction under Section 165 of the Penal Code since Singapore’s independence. Singapore is ranked 5th in Transparency International’s Corruption Perception Index and has been a consistently strong performer on the index. (See our client alert for a deeper dive into the CPI results for APAC.)
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