Archive for the ‘Manuel Salvoch’ Category

Friday Roundup

Friday, June 15th, 2012

Checking in on Wal-Mart, an enforcement action that flew under the radar from beginning to end, a guilty plea in the U.K., and is sex a thing of value?  It’s all here in the Friday roundup.

Wal-Mart

Various reports this week reported on the expansion of Wal-Mart’s FCPA probe.  As many readers know, this is hardly surprising as most FCPA inquiries result in the “where else” question as indicated in this prior guest post.  Even if the enforcement agencies do not actually ask the “where else” question, a company knows it will eventually be asked and will thus likely conduct a broader review of certain other FCPA high-risk jurisdictions not part of the original inquiry on its own initiative and to demonstrate to the enforcement agencies its committment to compliance and its cooperation.

This June 12th letter from Elijah Cummings (D-MD, Ranking Member, House Committee on Oversight and Government Reform) and Henry Waxman (D-CA, Ranking Member, House Committee on Energy and Commerce)  to Wal-Mart CEO Michael Dukes references that Wal-Mart’s review has expanded beyond Mexico to also include Brazil, China, South Africa and India.  Indeed, the letter references that Wal-Mart is “conducting a worldwide assessment of the company’s anti-corruption policies” something Wal-Mart indicated it was already doing.  In short, Wal-Mart’s FCPA inquiry is following a typical path.

In the letter, Cummings and Waxman again express disappointment as to Wal-Mart’s cooperation in their own Congressional probe.  For more on Cummings and Waxman’s interest in Wal-Mart, see this prior post (and links therein).

Meanwhile on the civil litigation front, a 12th lawsuit has been filed in the wake of April’s New York Times story.  As noted in this release from the New York City Comptroller, New York City Pension Funds filed a shareholder derivative action in the Delaware Chancery Court alleging “that  Wal-Mart’s officers and directors breached their fiduciary duty to the company  and its shareholders by failing to properly handle credible claims of the  bribery allegations and attempting to cover up details of the  scandal.”

Under the Radar

This post from March 2011 highlighted how criminal charges against Manual Salvoch flew under the radar in that the DOJ did not issue a press release announcing the charges and the enforcement action appeared to escape coverage elsewhere.  Salvoch is the former CFO of LatiNode and was charged in connection with payments to Hondutel (see here - according to the charging documents a state-owned telecommunications company in Honduras responsible for providing telecommunications services in Honduras). The Hondutel payments also resulted in criminal charges against Jorge Granados (the founder and former CEO and Chairman of the Board of LatiNode), Manuel Caceres (a former Vice President of Business Development) and Juan Vasquez (a former senior commercial executive).

This prior post highlights the sentences of Granados, Caceres and Vasquez.

Last week, Salvoch was sentenced by Judge Paul Huck (S.D. of Florida) t0 10 months in prison and 3 years of supervised release.  Just like the beginning, the end of the Salvoch enforcement action also flew under the radar.

The final sentencing scorecard in the LatiNode individual prosecutions is thus as follows.

Granados – 46 months

Caceres – 23 months

Vasequez – 3 years probation

Salvoch – 10 months.

U.K. Plea

Previous posts (here and here) discussed charges on both sides of the Atlantic against Paul Jennings, the former CEO of Innospec.  Earlier this week, the U.K. Serious Fraud Office announced (here) that Jennings pleaded guilty to the following charges:  “Two allegations of conspiracy to corrupt in that he gave or agreed to give corrupt payments to public officials and other agents of the Government of Indonesia (between 14 February 2002 and 31 December 2008) and Iraq (between 1 January 2003 and 31 January 2008) as inducements to secure, or as rewards for having secured, contracts from that Government for the supply of its products including Tetraethyl Lead by Innospec.”

As noted in this previous post, in March 2010, Innospec resolved enforcement actions on both sides of the Atlantic based on the same core set of facts.

Thing of Value?

At its core, the FCPA’s anti-bribery provisions require “anything of value” to a “foreign official” to “obtain or retain business.”

This recent Reuters story concerning an employee of Oracle’s business unit in Singapore has a “foreign official” (the former head of the city-state’s anti-narcotics agency) and the article describes that the thing of value was provided to the “foreign official” as “an inducement to help further the firm’s business interest.”

The thing of value?

Sex.

Can sex be a thing of value under the FCPA’s anti-bribery provisions?  I guess it depends, it’s a factual issue.

On that note, a good weekend to all.

Salvoch Enforcement Action Flies Under The Radar

Monday, March 7th, 2011

It is not every day that a former chief financial officer is criminally charged with conspiracy to violate the FCPA.

On December 17, 2010 a criminal information (here) was filed under seal against Manuel Salvoch, the former CFO of LatiNode. On January 11, 2011 Salvoch was arrested, the case unsealed, and a plea agreement (here) was executed on January 12, 2011.

This is likely the first you have heard of the Salvoch enforcement action. The DOJ did not issue a press release and, to my knowledge, this enforcement action has never been reported.

Salvoch was charged in connection with payments to Hondutel (see here), according to the charging documents a state-owned telecommunications company in Honduras responsible for providing telecommunications services in Honduras. The Hondutel payments have also resulted in criminal charges against Jorge Granados (the founder and former CEO and Chairman of the Board of LatiNode) and Manuel Caceres (a former Vice President of Business Development) (see here).

The theory of prosecution in these cases is the same theory of prosecution being challenged in the Carson and Lindsey cases (see here and here) – that employees of alleged state-owned or state-controlled enterprises are “foreign officials” under the FCPA.

This theory of prosecution was also the support for the March 2009 enforcement action against LatiNode (see here) a former privately held Florida telecommunications company that agreed to a pay a $2 million criminal penalty for violating the FCPA in connection with alleged Hondutel payments as well as payments to officials of Tele Yemen, the Yemeni government-owned telecommunications company. LatiNode was acquired by eLandia International Inc. (an issuer) in June 2007.

The conduct at issue in the Salvoch criminal information and plea agreement is similar to the conduct at issue in the Granados and Caceres indictment (see here for the prior post).

The Granados and Caceres case remains open (their trial is set for September 26, 2011) and in his plea agreement Salvoch agreed to “cooperate fully” with the DOJ including by “providing truthful and complete information and testimony” at any trial, or other Court proceeding. According to the docket, Salvoch is to be sentenced on March 23rd, but it is likely that his sentencing will be delayed until after the Granados and Caceres trial.

Thanks to Gregory Bates (here – Squire Sanders) who stumbled upon this case while wandering around on the DOJ’s FCPA website. Bates is a contributor to Squire Sanders’ Anticorruption blog (see here).