Vitol Inc. (Vitol), the U.S. affiliate of the Vitol group of companies, which together form one of the largest energy trading firms in the world, has agreed to pay a combined $135 million to resolve the Justice Department’s investigation into violations of the Foreign Corrupt Practices Act (FCPA) and to resolve a parallel investigation in Brazil.
The resolution arises out of Vitol schemes to pay bribes to officials in Brazil, Ecuador, and Mexico. Vitol has also agreed to disgorge more than $12.7 million to the Commodity Futures Trading Commission (CFTC) in a related matter and to pay the CFTC a penalty of $16 million related to trading activity not covered by the deferred prosecution agreement with the department.
“Over a period of 15 years, Vitol paid millions of dollars in bribes to numerous public officials – in three separate countries – to obtain improper competitive advantages that resulted in significant illicit profits for the company,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. “Today’s coordinated resolution with Brazil, along with our first coordinated FCPA resolution with the CFTC, underscores the department’s resolve to hold companies accountable for their crimes while, at the same time, avoiding unnecessarily duplicative penalties.”
“Vitol paid bribes to government officials in Brazil, Ecuador and Mexico to win lucrative business contracts and obtain competitive advantages to which they were not fairly entitled,” said Acting U.S. Attorney Seth D. DuCharme of the Eastern District of New York. “The United States Attorney’s Office for the Eastern District of New York will continue to hold accountable companies and individuals that attempt to defy U.S. law to the detriment of honest competitors.”
“This resolution demonstrates the FBI’s commitment to investigate foreign corruption and hold accountable those who circumvent laws for financial gain at the expense of American consumers,” said Assistant Director in Charge Kristi K. Johnson of the FBI’s Los Angeles Field Office. “We’ll continue to work with our partners to root out corruption, whether it occurs domestically or abroad, to ensure trust on the international playing field.”
Vitol entered into a deferred prosecution agreement with the department in connection with a criminal information filed today in the Eastern District of New York charging the company with two counts of conspiracy to violate the anti-bribery provisions of the FCPA. The case is assigned to Senior U.S. District Judge Eric N. Vitaliano.
Pursuant to its agreement with the department, Vitol’s total criminal penalty is $135 million. The department will credit $45 million – approximately one third of the total criminal penalty – against the amount that Vitol will pay to resolve an investigation by the Brazilian Ministério Público Federal for conduct related to the company’s bribery scheme in Brazil.
As part of the deferred prosecution agreement, Vitol Inc. and Vitol S.A., another company within the Vitol group of companies, have agreed to continue to cooperate with the department in any ongoing investigations and prosecutions relating to the conduct, including of individuals; to enhance their compliance programs; and to report to the department on the implementation of their compliance programs.
According to the company’s admissions and court documents, between 2005 and 2014, Vitol and its co-conspirators paid bribes of more than $8 million to at least four officials at Brazil’s state-owned and controlled oil company Petróleo Brasileiro S.A. – Petrobras (Petrobras). Vitol paid these bribes in exchange for receiving confidential Petrobras pricing and competitor information. Vitol concealed the scheme through the use of intermediaries and a fictitious company that facilitated the payments to offshore accounts and, ultimately, to the Petrobras officials.
Vitol also admitted that from 2011 to 2014, it bribed at least five other Petrobras officials in exchange for receiving confidential pricing information that Vitol used to win fuel oil contracts with Petrobras. During that scheme, a consultant acting on behalf of Vitol engaged in back-channel negotiations with a Houston-based Petrobras official. The parties would then hold staged negotiations, ultimately settling on the pre-arranged price that allowed for bribes to be paid from Vitol to the Petrobras officials. Several of the co-conspirators communicated using alias email accounts and code names, including “Batman,” “Tiger,” “Phil Collins,” “Dolphin,” “Popeye,” and “Beb.”
Vitol also admitted to a second conspiracy to bribe officials in Ecuador and Mexico in order to obtain and retain business in connection with the purchase and sale of oil products. Between 2015 and July 2020, Vitol agreed to offer and pay more than $2 million in bribes to officials in Ecuador and Mexico.
In furtherance of this bribery scheme, Vitol and its co-conspirators entered into sham consulting agreements, set up shell companies, created fake invoices for purported consulting services and used alias email accounts to transfer funds to offshore companies involved in the conspiracy – all while knowing that the funds, at least in part, would be used to pay bribes to Ecuadorian and Mexican officials.
In related matters, the department recently unsealed charges against a Houston-based former Petrobras official who received bribes in association with the scheme, and who pleaded guilty to one count of conspiracy to commit money laundering on Feb. 8, 2019, in the Eastern District of New York. In addition, the department recently unsealed charges against one of the intermediaries involved in the Brazil scheme, who pleaded guilty on Sept. 22, 2017, to one count of conspiracy to violate the FCPA in connection with a related bribery scheme. Both individuals are awaiting sentencing. Further, on Sept. 22, 2020, a federal grand jury in the Eastern District of New York returned an indictment against Javier Aguilar, a Vitol trader, for his alleged role in the Ecuador scheme.
The investigation is being conducted by the FBI’s International Corruption Unit. The government’s case is being handled by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. Fraud Section Trial Attorneys Derek J. Ettinger, Jonathan P. Robell, and Clayton P. Solomon, and Assistant U.S. Attorneys Mark E. Bini and Andrey Spektor are prosecuting the case. The U.S. Marshals Service and Justice Department’s Office of International Affairs provided assistance in the investigation.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
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- Armenia Travel AdvisoryBy Sam NewsSeptember 26, 2020
- Secretary Pompeo’s Call with NATO Secretary General Stoltenberg By Sam NewsNovember 30, 2020
- VA Vet Centers: Evaluations Needed of Expectations for Counselor Productivity and Centers’ StaffingBy Sam NewsSeptember 23, 2020The Veterans Health Administration's (VHA) Readjustment Counseling Service (RCS) provides counseling through 300 Vet Centers, which can be found in community settings and are separate from other VHA facilities. RCS has set expectations for counselor productivity at Vet Centers. For example, one expectation is for counselors to achieve an average of 1.5 visits for each hour they provide direct services. However, RCS officials told GAO that they have not conducted, and do not have plans to conduct, an evaluation of the expectations. VA Vet Center Productivity Expectations for Counselors Although most counselors met the productivity expectations in fiscal year 2019, counselors GAO spoke with said the expectations led them to change work practices in ways that could negatively affect client care. For example, counselors at one Vet Center told GAO that, to meet productivity expectations, they spend less time with each client to fit more clients into their schedules. Without an evaluation of its productivity expectations, RCS lacks reasonable assurance that it is identifying any unintended or potentially negative effects of the expectations on counselor practices and client care. RCS officials told GAO that by the start of fiscal year 2021 they plan to implement a staffing model to identify criteria for determining staffing needs at Vet Centers. The model incorporates data on counselors' productivity (work hours and number of visits), and total clients to determine criteria for adding or removing a counselor position from a Vet Center. However, the model does not fully address key practices in staffing model design GAO identified in previous work. For example, the model does not include the input of Vet Center counselors, or client data associated with directors, who also provide counseling. As a result, RCS is at risk of making decisions about Vet Center staffing that may not be responsive to changing client needs. Shortages of mental health staff within VHA coupled with the increasing veteran demand for mental health services highlight the critical importance of ensuring appropriate Vet Center staffing. VHA's RCS provided counseling (individual, group, marriage, and family) and outreach services through Vet Centers to more than 300,000 veterans and their families in fiscal year 2019. In 2017, RCS implemented changes to expectations that it uses to assess Vet Center counselor productivity, setting expectations for counselors' percentage of time with clients and number of client visits. GAO was asked to review Vet Center productivity expectations for counselors and staffing. Among other issues, this report examines the extent to which VHA (1) evaluates its productivity expectations; and (2) assesses Vet Centers' staffing needs. To do this work, GAO reviewed RCS documentation regarding counselors' productivity expectations and analyzed RCS data on counselor productivity expectations and staffing, for fiscal year 2019. GAO interviewed RCS leadership, including district directors, and directors and counselors from 12 Vet Centers, selected for variation in geographic location and total number of clients, among other factors. GAO is making four recommendations, including that VHA (1) evaluate Vet Center productivity expectations for counselors; and (2) develop and implement a staffing model that incorporates key practices. The Department of Veterans Affairs concurred with GAO's recommendations and identified actions VHA is taking to implement them. For more information, contact Debra A. Draper at (202) 512-7114 or firstname.lastname@example.org.[Read More…]
- Cuba Travel AdvisoryBy Sam NewsSeptember 26, 2020Do not travel to Cuba [Read More…]
- Canadian Man Extradited from Spain to Face Charges for Massive Psychic Mail Fraud SchemeBy Sam NewsDecember 22, 2020A Canadian citizen accused of operating a decades-long psychic mail fraud scheme was extradited to the United States and made his initial appearance today in federal court in Central Islip, New York, the Department of Justice and the U.S. Postal Inspection Service announced.[Read More…]
- Assistant Attorney General Makan Delrahim Announces Re-Organization of the Antitrust Division’s Civil Enforcement ProgramBy Sam NewsAugust 20, 2020The Department of Justice’s Antitrust Division announced today that it is creating the Office of Decree Enforcement and Compliance and a Civil Conduct Task Force. Additionally, it will redistribute matters among its six civil sections in order to build expertise based on current trends in the economy.[Read More…]
- Secretary Michael R. Pompeo With David Rubenstein of Bloomberg NewsBy Sam NewsJanuary 5, 2021
- Namibia Travel AdvisoryBy Sam NewsSeptember 26, 2020Do not travel to Namibia [Read More…]
- Environmental Liabilities: NASA’s Reported Financial Liabilities Have Grown, and Several Factors Contribute to Future UncertaintiesBy Sam NewsJanuary 15, 2021The National Aeronautics and Space Administration (NASA) estimated cleanup and restoration across the agency would cost $1.9 billion as of fiscal year 2020, up from $1.7 billion in fiscal year 2019. This reflects an increase of $724 million, or 61 percent, from 2014. NASA identified contamination at 14 centers around the country, as of 2019. Five of the 14 centers decreased their environmental liabilities from 2014 to 2019, but liability growth at the other centers offset those decreases and contributed to the net increase in environmental liabilities. Santa Susana Field Laboratory, California, had about $502 million in environmental liabilities growth during this period (see fig.). Nearly all this growth resulted from California soil cleanup requirements that NASA did not anticipate. These NASA Centers Reported Increases or Decreases in Restoration Project Environmental Liabilities Greater Than $10 Million Between Fiscal Years 2014 and 2019 NASA's reported fiscal year 2019 environmental liabilities estimate for restoration projects does not include certain costs, and some factors may affect NASA's future environmental liabilities, potentially increasing or decreasing the federal government's fiscal exposure. Certain costs are not included in the fiscal year 2019 estimate because some projects are in a developing stage where NASA needs to gather more information to fully estimate cleanup costs. Further, NASA limits its restoration project estimates to 30 years, as the agency views anything beyond 30 years as not reasonably estimable. Sixty of NASA's 115 open restoration projects in fiscal year 2019 are expected to last longer than 30 years. With regard to factors that could affect future environmental liabilities, NASA is assessing its centers for contamination of some chemicals it had not previously identified but does not yet know the impact associated cleanup will have on the agency's liabilities in part because standards for cleaning up these chemicals do not yet exist. New cleanup requirements for emerging contaminants could increase NASA's environmental liabilities and create additional fiscal exposure for the federal government. Additionally, NASA is committed, through an agreement with the state of California, to clean soil at Santa Susana Field Laboratory to a certain standard, but the agency issued a decision in September 2020 to pursue a risk-based cleanup standard, which the state of California has opposed. According to NASA, a risk-based cleanup standard at Santa Susana Field Laboratory could decrease NASA's environmental liabilities and reduce the federal government's fiscal exposure by about $355 million. Decades of NASA's research for space exploration relied on some chemicals that can be hazardous to human health and the environment. NASA identified 14 centers around the country with hazardous chemicals that require environmental cleanup and restoration. NASA's Environmental Compliance and Restoration Program oversees the agency's environmental cleanup. NASA's environmental liabilities estimate is reported annually in the agency's financial statement. Federal accounting standards require agencies responsible for contamination to estimate and report their future cleanup costs when they are both probable and reasonably estimable. This report describes (1) NASA's environmental liabilities for restoration projects from fiscal years 2014 to 2019—the most recent data available at the time of our review—and (2) factors that could contribute to uncertainties in NASA's current or future environmental liabilities. GAO reviewed NASA financial statements, guidance, and other relevant reports and interviewed NASA officials from headquarters and three centers, selected because of changes in their reported liabilities. NASA provided technical comments on a draft of this report, which were incorporated as appropriate. For more information, contact Allison Bawden at (202) 512-3841 or email@example.com.[Read More…]
- Federalism: Opportunities Exist to Improve Coordination and Consultation with State and Local GovernmentsBy Sam NewsSeptember 8, 2020Federal agencies' intergovernmental affairs activities advance agency objectives that require coordination with state and local governments. Most of the 24 Chief Financial Officers (CFO) Act agencies GAO surveyed reported undertaking similar information-sharing and coordination activities, such as serving as liaisons, conducting outreach, and hosting and attending events. The agencies GAO surveyed also reported taking varied approaches to structuring their intergovernmental affairs operations to conduct these activities. Of the 20 agencies with agency-wide intergovernmental affairs offices, half focused on intergovernmental affairs as their sole function while the other half included multiple functions, such as congressional or legislative affairs. How Agencies Organized Their Intergovernmental Affairs Operations Most agencies also reported that intergovernmental affairs activities and responsibilities were dispersed across their agencies. Regional and program offices perform intergovernmental affairs functions at some agencies, while others have an agency-wide office for them. Responsibilities for consulting with state and local governments under Executive Order (E.O.) 13132 also varied. The order requires that each federal agency designate an official to implement the order. Fourteen agencies reported having such an official; 10 did not report having one. Representatives from state and local associations GAO interviewed reported interacting with federal agency intergovernmental affairs offices for outreach and information-sharing purposes. They also cited coordination and consultation challenges, such as difficulty identifying intergovernmental affairs contacts, limited federal agency knowledge of state and local government, and inconsistent consultation on proposed regulations. The Office of Management and Budget (OMB) has primary responsibility for implementing E.O. 13132 and related implementation guidance, including a requirement for the designation of a federalism official. However, OMB could not identify any oversight steps it had taken to ensure federal agencies' designation of a federalism official consistent with its guidance for implementation of the executive order. Taking steps to ensure federal agencies' designation of a federalism official could help ensure that agencies have an accountable process in place for appropriately consulting with state and local governments. Federal programs fulfilling national goals in education, health care, transportation infrastructure, and homeland security, among other issues, are implemented through a complex partnership between federal, state, and local governments. E.O. 13132, Federalism, outlines principles and criteria to guide the formulation and implementation of policies and the appropriate division of responsibilities between levels of government. GAO was asked to review intergovernmental affairs activities at executive branch agencies. This report (1) identifies intergovernmental affairs offices' key responsibilities and activities at selected federal agencies and how these offices are organized, and (2) assesses state and local government officials' interaction with intergovernmental affairs offices, including their reported strengths and challenges. GAO examined relevant policies and executive orders and surveyed officials from the 24 CFO Act agencies. GAO also interviewed a nongeneralizable sample of individuals from 10 associations representing state and local government officials. GAO is recommending that OMB ensure that federal agencies implement its guidance on agency adherence to E.O. 13132 requirements, particularly related to designating a federalism official. OMB neither agreed nor disagreed with the recommendation. For more information, contact Michelle Sager at (202) 512-6806 or firstname.lastname@example.org.[Read More…]
- Morocco Travel AdvisoryBy Sam NewsSeptember 26, 2020
- United States and ASEAN: A Billion Futures Across the Indo-PacificBy Sam NewsNovember 15, 2020
- Justice Department Announces Results in Fight Against the Opioid Crisis Two Years after Launch of Operation S.O.S.By Sam NewsSeptember 24, 2020In July 2018, the Department of Justice announced the launch of Operation Synthetic Opioid Surge (S.O.S), a program aimed at reducing the supply of synthetic opioids in 10 high impact areas and identifying wholesale distribution networks and international and domestic suppliers.[Read More…]