Archive for the ‘Jorge Granados’ Category

46 Months For Jorge Granados

Friday, September 9th, 2011

After suffering its fair share of recent FCPA sentencing setbacks (see here, here, and here for instance), the DOJ largely got the sentence it was seeking (five years) earlier this week in the S.D. of Florida as Judge Joan Lenard sentenced Jorge Granados to 46 months in prison followed by 2 years of supervised release.  Unlike in certain of the cases where judges significantly rejected DOJ sentencing requests, the DOJ issued a press release (here) in connection with Granados’s sentence.

As detailed in this prior post, Granados (the founder, Chief Executive Officer and Chairman of the Board of Latin Node between 1999 and 2007) was criminally charged in December 2010 for his role in an alleged bribery scheme involving Hondutel “the wholly state-owned telecommunications authority in Honduras, established under Honduran law and headquartered in Tegucigalpa, Honduras.” According to the indictment, Hondutel’s operations “were overseen by another Honduran government entity, Comision Nacional de Telecomunicaciones.”  The indictment charged one count of conspiracy to violate the FCPA’s anti-bribery provisions, twelve counts of FCPA anti-bribery violations, one count of money laundering conspiracy, and five counts of money laundering.

In May (see here), Granados pleaded guilty to 1 count of conspiracy to violate the FCPA and, in exchange, the DOJ agreed to dismiss the remaining 18 counts.  Granados’s co-defendant Manuel Caceres (a senior executive of Latin Node) pleaded guilty in May prior to Granados and testified as a cooperating witness in the Granados sentencing hearing.   Caceres is to be sentenced on November 28th and two other defendants in a related case (Manuel Salvoch and Juan Pablo Vasquez) are to be sentenced in December.

In arguing for a sentence below the advisory guidelines range, John Wylie (counsel to Granados) asserted so-called “imperfect coercion” and stated as follows.  “Mr. Granados’ entire livelihood, his company, and the substantial investment put into both were jeopardized by the corruption of Hondutel.  Mr. Granados was put between a rock and hard place:  comply with Hondutel’s demands for additional payments or shut down the business in Honduras after almost a decade of establishing it there.  If LatiNode failed to meet Hondutel’s demands, the Hondutel officials would effectively shut down LatiNode because they controlled the telecommunications market in Honduras and set the rules.  It was the corrupt officials at Honduras that created and drove the anti-competitive market that, at a minimum, made LatiNode feel as though it had to give the corrupt officials what they wanted to survive in the market.”

The DOJ, in reply, stated that Granados’s request pursuant to Section 5K2.12 of the Sentencing Guidelines was off-base because he did not claim “physical injury, substantial damage to property or similar injury” if he refused the bribe demands.  The DOJ stated as follows.  “Rather, Defendant – who did not even live in Honduras but resided in Florida, where his business was based – simply asserts that his own and his company’s economic well-being would have been affected by his refusal to authorize the bribe payments.”  The DOJ also pointed out that Granados neglected to cite a sentence in Section 5K2.12′s policy statement that “personal financial difficulties and economic pressures upon a trade or business do not warrant a downward departure.”

The 46 month sentence of Granados is one of the most harsh individual sentences in FCPA history.  It is believed that the top 6 list includes:  Charles Edward Jumet (87 months – including 20 months for a false statement charge ), Juan Diaz (57 months),  Granados (46 months), John Warwick (37 months)  Christian Sapsizian (30 months) and Antonio Perez (24 months).  Jumet and Warwick were both sentenced in the W.D. of Virginia, all others in the S.D. of Florida – where several additional FCPA defendants (in addition to Solvach and Vasquez) are scheduled to be sentenced.

 

DOJ Charges Two Executives In Hondutel Matter

Tuesday, December 21st, 2010

In April 2009, Latin Node, Inc. (“Latin Node”), a privately-held telecommunication services company headquartered in Miami, pleaded guilty to violating the FCPA’s anti-bribery provisions in connection with improper payments made to “foreign officials” in Honduras and Yemen. (See here). The criminal information (here) details Latin Node’s efforts to obtain and retain business with Hondutel (the Honduran government-owned telecommunications company).

Yesterday, the DOJ announced (see here) the unsealing of a 19 count criminal indictment against Jorge Granados and Manuel Caceres.

According to the indictment (here), Granados “was the founder, Chief Executive Officer and Chairman of the Board of Latin Node” between 1999 and 2007. During this time period, Granados, a U.S. citizen, had authority to set company policy, contract with telecommunications companies, hire and fire employees, set sales prices, and approve sales practices in foreign countries.” Caceres was a senior executive of Latin Node from 2004 to 2007, holding such titles as Vice President of Business Development. The indictment alleges that Caceres, a citizen of Honduras and a lawful permanent resident of the U.S., was responsible for, among other things, developing Latin Node’s business in Honduras.

The indictment centers on an “interconnection agreement” between Latin Node and Hondutel “the wholly state-owned telecommunications authority in Honduras, established under Honduran law and headquartered in Tegucigalpa, Honduras.” According to the indictment, Hondutel’s operations “were overseen by another Honduran government entity, Comision Nacional de Telecomunicaciones.”

According to the indictment, “almost immediately after winning the interconnection agreement with Hondutel, Latin Node executives realized that Latin Node needed to obtain a reduction in the Termination Rates in order to be more competitive in the Honduran telecommunications market.” The indictment charges that “Latin Node executives also learned that Official 1 [a senior Hondutel executive with broad decision-making authority and influence over telecommunications contracts with private service providers] was considering whether to rescind Hondutel’s interconnection agreement with Latin Node.”

The indictment charges one count of conspiracy to violate the FCPA’s anti-bribery provisions, twelve counts of FCPA anti-bribery violations, one count of money laundering conspiracy, and five counts of money laundering.

According to the indictment, the “purpose of the conspiracy was to obtain from Hondutel business advantages for Latin Node including, but not limited to, preferred telecommunications rates, retaining the interconnection agreement, and continued operation in Honduras despite late payments to Hondutel, by paying bribes to Honduran government officials, including to officers and employees of the Government of Honduras and of Hondutel …”.

Among other things, the indictment alleges that Granados and Caceres, and others, “would and did offer to pay, promise to pay, and authorize the payments of bribes, directly and indirectly to and for the benefit of Official 1, Official 2 [an attorney in the Hondutel legal department who worked directly for Official 1], and Official 3 [a Minister in the Honduran Government who was a member of Hondutel's Board of Directors], in exchange for these Officials’ agreements to secure lower rates and other benefits for Latin Node under the interconnection agreement with Hondutel.” The indictment charges that Granados and Caceres, and others, “would and did wire and cause to be wired certain bribe payments from Latin Node’s bank accounts in Miami-Dade County, Florida, to the bank accounts designated by Official 1, Official 2 and Official 3.”

According to the DOJ release, “between September 2006 and June 2007, the defendants allegedly paid more than $500,000 in brobes to the officials, concealing many of the payments by laundering the money through Latin Node subsidiaries in Guatemala and to accounts in Honduras controlled by the Honduran government officials.”

As noted in the DOJ release, in early 2007, eLandia International Inc., (here) announced an agreement to acquire Latin Node.” “The indictment alleges that the defendants took additional measures to conceal the illicit payments during the acquisition due diligence process.”

The DOJ release further notes that the April 2009 resolution with Latin Node resulted from the “actions of eLandia in disclosing potential FCPA violations to the department after eLandia’s acquisition of Latin Node and discovery of the improper payments.”

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Did the Latin Node enforcement action contribute to a coup? That is the question asked in this interesting piece by Gregory Paw (Pepper Hamilton).