In terms of defendants (13), it is the largest FCPA enforcement action in history and its involves Haiti Teleco. As indicated in a post last week (see here), another individual – and a high-profile individual at that (former Haitian President Jean-Bertrand Aristide), has been mentioned in connection with the enforcement action.
The enforcement action(s) principally allege payments by various defendants to obtain preferred telecommunication rates from Haiti Teleco. See here for the indictment of Joel Esquenazi, Carlos Rodriguez and others. See here for the information as to Juan Diaz. See here for the information as to Antonio Perez. See here for the superseding indictment of various Cinergy Telecommunications employees and others.
Even though the Haiti Teleco enforcement action(s) are already broad in scope, other companies also obtained preferred telecommunication rates from Haiti Teleco - and allegations or suspicions have been raised as to how. However, at present, there have not been any enforcement actions as to the below companies.
Prior SEC filings by IDT Corporation (here), starting in 2008, have stated as follows. “On April 1, 2004, D. Michael Jewett, a former employee, [...] sent a copy of the complaint he had filed against the Company to the United States Attorney’s Office. In the complaint, Jewett had alleged, among other things, that improper payments were made to foreign officials in connection with an IDT Telecom contract. As a result, the Department of Justice (“DOJ”), the SEC and the United States Attorney in Newark, New Jersey conducted an investigation of this matter. The Company and the Audit Committee of the Company’s Board of Directors initiated independent investigations, by outside counsel, regarding certain of the matters raised in the Jewett complaint and in these investigations. Neither the Company’s nor the Audit Committee’s investigations have found any evidence that the Company made any such improper payments to foreign officials.”
The substance of IDT’s disclosure on this issue has not changed since 2008. In 2010, IDT entered into a confidential settlement agreement with Jewett. In its most recent quarterly filing, IDT stated as follows as to the above issue. “The Company continues to cooperate with these investigations, which the SEC and DOJ have confirmed are still ongoing.” For more on the IDT – Haiti Teleco contract, see this 2009 article from Forbes.
This March 2010 editorial in the Wall Street Journal “Democrats and Haiti Telecom” raises questions about a 1999 contract between Fusion Telecommunications (here) and Haiti Teleco (as well as Fusion board member, Joseph P. Kennedy II – the article also states that “numerous [Bill] Clinton cronies were also on Fusion’s board”). The article asserts that Fusion had access to the Teleco network at a 75% discount from the official rate on file at the Federal Communications Commission. For additional Wall Street Journal coverage of Fusion’s Haiti Teleco contract – see here and here - from today’s Wall Street Journal titled “The Looting of Haiti Teleco.”