Businessman Pleads Guilty in $1 Billion Venezuelan Bribery Scheme
On June 16, 2016, Venezuelan businessman, Roberto Enrique Rincon Fernandez (Rincon) pleaded guilty to bribery in a $1 Billion scheme to obtain contracts from Venezuelan state oil company Petroleos de Venezuela SA (PDVSA). The scheme ended December 16, 2015 when Rincon and and his co-conspirator Abraham Jose Shiera Bastidas (Shiera) were arrested. Rincon pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA), one count of violating the FCPA and one count of making false statements on his 2010 federal income tax return. Shiera pleaded guilty to the bribery in March 2016.
These bribes started in 2009 and resulted in Rincon and Shiera securing lucrative energy contracts for their companies to provide equipment and services to PDVSA. Rincon admitted that with the help of Shiera, he had paid bribes to PDVSA purchasing analysts and other PDVSA officials to ensure that his and Shiera's companies were placed on PDVSA bidding panels and were given priority for payment ahead of other vendors. The bribes to the officials included money (one official alone received over $2.5 million in bribes), mortgage payments, airline tickets, liquor and hotel reservations.
Federal agents seized Rincon's 15,000-square-foot mansion, his luxury cars, and three Swiss bank accounts totaling more than $100 million. Both Rincon and Shiera agreed to forfeit all profits from their criminal activity. In return for the plea agreement, Rincon will likely face a sentence of 13 years rather than a sentence of over 100 years. Sentencing is scheduled for September 30, 2016.
Acting Special Agent in Charge McElroy Homeland Security Investigations (HSI) said: "The corruption of foreign officials through bribery has a damaging impact on the stability of trade, industries and even nations; HSI and our partners will tirelessly investigate anyone who cultivates the corruption of officials abroad and bribe their way to financial gain."
With record-setting fines, criminal penalties and imprisonment being levied by aggressive enforcement agencies in the U.S. and abroad, it is paramount for companies to establish or assess anti-corruption compliance programs to ensure they help mitigate the risks of FCPA violations and consequences presented in this Alert.
MDO Partners encourages companies to evaluate their corporate structure, conduct due diligence of their foreign partners and examine their internal controls to mitigate serious corruption risks. Our attorneys and advisors have extensive experience implementing, maintaining and advising on effective anti-corruption programs in various countries, including Venezuela.
If you have questions or comments regarding this Alert, please contact the attorney listed below.
Richard Montes de Oca
175 SW 7th Street | Suite 1900 | Miami, FL33130 | 305.704.8452 | MDOPARTNERS.COM
MDO Partners is a boutique law firm that focuses on Corporate, Real Estate and Immigration Law,
as well as Global Compliance and Business Ethics. The firm is comprised of a solid team of attorneys and advisors who are committed to the business goals and best interests of our clients.