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FCPA Blog Daily News

Entries in Misao Hioki (7)

Monday
Apr072014

Marine hose exec extradited from Germany

Image courtesy of Dunlop Oil & MarineAn Italian citizen was extradited from Germany on a charge of participating in a conspiracy to suppress and eliminate competition by rigging bids, fixing prices, and allocating market share for marine hose sold in the United States and elsewhere, the DOJ said Friday.

Click to read more ...

Tuesday
Apr242012

Walmart's Move For Mexican Dominance 

By all accounts, Walmart's appetite for growth in Mexico was insatiable. The drive to dominate the retail market there, according to the New York Times, allegedly led the company to pay $24 million in bribes to fast track store permits.

Click to read more ...

Thursday
Sep152011

Bridgestone Pays $28 Million In Bid Rigging and FCPA Case

Bridgestone Corporation will plead guilty and pay a $28 million criminal fine for its role in conspiracies to rig bids and bribe foreign officials, the DOJ said today.

Click to read more ...

Tuesday
May112010

The Hard Timers

Compliance officers will want to keep a copy of the table below close at hand. What better way to answer those who insist that the FCPA is small potatoes, after all, when you look at the relatively few enforcement actions over the past 33 years.

Here are the 22 men (no women so far), most of them former company executives, who've spent time in prison for FCPA-related convictions. Each name that follows represents a terrible tragedy, often with permanent damage extending to families. As the compiler of the list said: "By my count there have been 187 people charged with violating the FCPA. This list will look a little different at the end of the year."

We'd like to thank the generous individual responsible for this post, but that's not possible. He or she has asked to remain anonymous, making this contribution pro bono publico.

The information is compiled from the Federal Bureau of Prisons' inmate locator. Readers with suggestions and corrections are welcome to let us know.

 

Name

Related Company

Register #

Age Race Sex

Release Date

Location

FERNANDO MAYA BASURTO

ABB Ltd

39135-177

48-White-M

UNKNOWN

HOUSTON FDC

CHARLES PAUL EDWARD JUMET

Ports Engineering Consultants Corporation

75638-083

53-White-M

UNKNOWN

NOT IN BOP CUSTODY

SULEIMAN A NASSAR

Lockheed

45723-019

73-White-M

11/19/1996

RELEASED

DAVID H MEAD

Saybolt

79529-079

72-White-M

7/21/1999

RELEASED

HERBERT STEINDLER

General Electric

02423-061

71-White-M

3/13/2000

RELEASED

HERBERT LAWRENCE TANNENBAUM

Tanner Management Corp

82537-054

85-White-M

4/20/2000

RELEASED

RICHARD G PITCHFORD

Central Asia American Enterprise Fund

26036-016

75-White-M

12/4/2003

RELEASED

ROBERT RICHARD KING

Owl Securities and Investments

14447-045

76-White-M

6/30/2006

RELEASED

STEVEN LYNWOOD HEAD

Titan

95321-198

63-White-M

9/29/2008

RELEASED

YAW OSEI AMOAKO

ITXC Corporation

60267-050

58-Black-M

12/17/2008

RELEASED

PAUL GRAYSON NOVAK

Willbros

43505-279

43-White-M

12/19/2008

RELEASED

ROGER MICHAEL YOUNG

ITXC Corporation

29574-016

49-White-M

4/10/2009

RELEASED

STEVEN JOSEPH OTT

ITXC Corporation

60540-050

50-White-M

6/17/2009

RELEASED

RAMENDRA BASU

World Bank

29254-016

47-White-M

8/7/2009

RELEASED

FAHEEM MOUSA SALAM

 

28567-016

32-White-M

1/7/2010

RELEASED

MISAO HIOKI

Bridgestone

90290-111

56-Asian-M

11/23/2010

LOMPOC USP

DAVID KAY

American Rice

13749-179

58-White-M

1/27/2011

TEXARKANA FCI

JIM BOB BROWN

Willbros

66158-179

48-White-M

1/29/2011

ATLANTA USP

CHRISTIAN SAPSIZIAN

Alcatel SA

78172-004

63-White-M

3/18/2011

NE OHIO CORR CTR CI

JASON EDWARD STEPH

Willbros

36444-177

40-White-M

3/28/2011

EL RENO FCI

DOUGLAS MURPHY

American Rice

13987-179

53-White-M

12/31/2012

EL RENO FCI

SHU QUAN-SHENG

AMAC International

58250-083

69-Asian-M

2/18/2013

LA TUNA FCI

 

Wednesday
Apr222009

Right Issue, Wrong Side?

When graft-busting becomes a political weapon, the rule of law grows weaker and corruption generally flourishes. Is that what's happening in Venezuela? Maybe. For sure the number of high-profile opposition leaders accused of bribery and corruption is growing.

  • The latest is the mayor of Maracaibo, Manuel Rosales, 56. He ran against President Hugo Chavez in 2006 and lost. A Bloomberg report said authorities claim he "could not explain some $60,000 of income while he was governor of the oil-rich state of Zulia." This week he fled to Peru instead of facing trial.
  • Leopoldo Lopez, 37, was a popular opposition mayor of Caracas' Chacao Municipality. Based on accusations of corruption, the comptroller general banned him from ever running again for public office.
  • An opposition governor from Yaracuy state, Eduardo Lapi, was convicted of corruption and jailed. He escaped two years ago and fled to Peru, which granted him political asylum.
  • Venezuelan authorities used a corruption investigation to arrest former Defense Minister Raul Baduel, who joined the opposition two years ago.
Bloomberg quoted former mayor Lopez as saying, “The fundamental problem is that there’s no credibility in the judicial system, which is a system that’s been completely politicized. This is retaliation and selective repression.”

Venezuela's 27 million people need a sincere anti-corruption campaign. Here's why. The country ranked 158 out of 180 on the 2008 Corruption Perception Index, tied with Angola, Azerbaijan, Burundi, Congo, Gambia, Guinea-Bissau and Sierra Leone. That's a rough crowd.

On the World Bank's 2009 Doing Business Index, Venezuela ranked 174. The only countries below it were Chad, São Tomé and Principe, Burundi, Congo, Guinea-Bissau, the Central African Republic and the Democratic Republic of the Congo. One symptom of Venezuela's condition is red tape, corruption's constant companion. The permits needed to build a warehouse there, for example, take 395 days to obtain and cost 344% of per capita income ($11,600). The OECD averages are 161.5 days and 56.7% of per capita income.

The Heritage Foundation's 2009 Index of Economic Freedom ranked Venezuela 174, followed only by Eritrea, Burma, Cuba, Zimbabwe and North Korea. It said, "Corruption pervades civil society and the judiciary; contracts and property rights are not well protected. Government tenders are vulnerable because the process frequently lacks transparency. Critics allege that price and exchange controls, involvement by government and military officials in narcotics trafficking, and kickbacks on major weapons purchases are sources of corruption in Venezuela."

Venezuelan oil revenues, according to the CIA World Factbook, account for roughly 90% of export earnings, about 50% of the federal budget revenues, and around 30% of GDP. It's the fourth-biggest supplier of foreign crude oil to the U.S.

In Pride International's latest Foreign Corrupt Practices Act disclosure, the oil services company said it has identified potentially corrupt payment practices in Venezuela.This year, Siemens admitted paying $16.7 million in bribes there, and former Bridgestone manager Misao Hioki said he negotiated corrupt payments with Venezuelan officials. Earlier FCPA enforcement actions involving Venezuela were Oil States International, Inc. (2007) and BellSouth Corp. (2002). In an ongoing European investigation, Swiss authorities reportedly found evidence that French engineering firm Alstom paid bribes to Venezuelan government officials.

The U.S. administration has a new narrative and looks ready to engage President Chavez. At the top of the agenda should be ways to promote sincere, non-political anti-corruption initiatives. How else will Venezuelans be able to sort their honest public servants from the crooked ones?
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Sunday
Dec282008

Cartels And Compliance

A post earlier this month reported the sentencing of former Bridgestone manager Misao Hioki to two years in jail and an $80,000 fine for violating the Foreign Corrupt Practices Act and conspiring to rig bids. Hioki, a Japanese citizen, became the ninth person from the so-called marine hose cartel to plead guilty to bid-rigging and the first to plead to an FCPA charge.

We've said before that cartel behavior often involves corrupt payments. That point was well made by Gary Spratling when he was Deputy Assistant Attorney General of the Antitrust Division at the Justice Department. In a 1999 speech to the American Conference Institute's National Conference on the FCPA, Spratling (who's now a partner in the San Francisco office of Gibson, Dunn & Crutcher), said this:

The fact is that in today's global economy there is a recurring intersection of conduct that violates both the Sherman Antitrust Act and the Foreign Corrupt Practices Act. A payment to a foreign official in violation of the FCPA may also be an act by an international bid-rigging, price-fixing, or market-allocation cartel in furtherance of its scheme injuring American businesses and consumers in violation of the Sherman Act. . . . Thus, a compliance audit by a multinational firm that detects a payment potentially in violation of the FCPA may actually have detected much more: international cartel activity with additional -- indeed, likely far greater -- exposure for the firm and its executives.
When the Antitrust Division discovers evidence of illegal payments during international cartel investigations, he said, it may refer the facts to the Fraud Section of the DOJ's Criminal Division for follow-up. We think that's probably what happened to Bridgestone's Misao Hioki.

And on compliance programs to fight both antitrust and FCPA violations, Spratling said: "Here the important point is that a compliance audit that detects a payment potentially in violation of the FCPA may simultaneously have detected a payment (as part of a bid-rigging or project-allocation scheme) potentially in violation of the Sherman Act, and vice versa."

We would add that a lax approach to compliance in one area often leads to problems in other areas. Siemens, for example, which just resolved FCPA violations with U.S. authorities, heard earlier this month from European Union antitrust regulators that it was being charged with forming a price-fixing cartel among makers of power transformers. And the overseas sales practices of leading orthopedic device makers, who settled domestic bribery charges last year, are also under investigation by the DOJ and SEC.

Fair competition, cash management, tax reporting, workplace health and safety, proper disclosure, export controls, hiring, employment and environmental practices -- all compliance is driven by the attitudes of an organization's leaders.
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Wednesday
Dec102008

Japanese Executive Jailed

A Tokyo executive was sentenced to two years in jail and fined $80,000 for violating the Foreign Corrupt Practices Act and conspiring to rig bids for the sale of marine hose and other industrial rubber products.

Former Bridgestone manager Misao Hioki pleaded guilty to two felony counts filed on Dec. 8, 2008 in U.S. District Court in Houston. He was charged for his role in a conspiracy to violate the FCPA by making corrupt payments to government officials in Latin America and elsewhere. He was also charged with conspiring to rig bids, fix prices and allocate market shares of marine hose in the United States and other countries.

Marine hose is used to transfer oil between tankers and storage facilities. The marine-hose cartel fixed prices worldwide from 2004 to 2007 for products worth hundreds of millions of dollars.

Hioki was one of eight foreign executives arrested in May 2007 following their participation in a cartel meeting in Houston. The Justice Department said he's the ninth individual to plead guilty in the bid-rigging investigation but is the first person in the cartel to plead guilty to an FCPA charge.

The DOJ said Hioki and his co-conspirators:

* Negotiated with employees of government-owned businesses, who are foreign officials under the Foreign Corrupt Practices Act, in at least the following Latin American countries Argentina, Brazil, Ecuador, Mexico and Venezuela to make corrupt payments to those foreign officials to secure business for his company and its U.S. subsidiary;

* Approved the making of corrupt payments to the foreign government officials through the local sales agents, to secure business for his company and its U.S. subsidiary;

* Paid the local sales agents a commission for each sale and, if a corrupt payment to the customer through the local sales agent was involved with the sale, concealed that payment within the commission payment made to the local sales agent; and

* Coordinated these corrupt payments in Latin America through the U.S. subsidiary’s offices in the United States including its Houston office.

It's becoming more common to see FCPA charges in cases investigated primarily for other offenses. Last month, for example, Shu Quan-Sheng, a naturalized U.S. citizen who sold controlled space-launch technology to China, pleaded guilty to violating the Foreign Corrupt Practices Act and to two counts of violating the Arms Export Control Act.

And in September, U.S. citizens Nam Nguyen, Joseph Lukas, Kim Nguyen, and An Nguyen, along with their Philadelphia-based company, Nexus Technologies (see our post here) were charged with one count of conspiracy to violate the Foreign Corrupt Practices Act and four substantive counts of violating the FCPA. They're accused of bribing government officials in Vietnam to secure contracts to supply high-tech items -- including third-party underwater mapping and bomb containment equipment, helicopter parts, chemical detectors, satellite communication parts and air tracking systems. That case doesn't yet involve charges under U.S. export laws.

View the DOJ's Dec. 10, 2008 release here.

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