Gunvor S.A. to Pay Over $661M in Landmark Guilty Plea for Foreign Bribery Case

Gunvor S.A., an international commodities trading company based in Switzerland, has pleaded guilty and agreed to pay over $661 million to settle an investigation by the U.S. Justice Department, resolving allegations of violations of the Foreign Corrupt Practices Act (FCPA).

The guilty plea follows an extensive probe into Gunvor’s corrupt practices, specifically its scheme to pay substantial bribes to Ecuadorean government officials with the aim of securing business deals with Petroecuador, the state-owned and state-controlled oil company of Ecuador.

As part of the resolution, Gunvor entered into a plea agreement, admitting to conspiracy charges related to violating the anti-bribery provisions of the FCPA. The company has been sentenced to a criminal monetary penalty of $374,560,071, in addition to forfeiting $287,138,444 in ill-gotten gains. Notably, the sentence includes credits for amounts paid by Gunvor to Swiss and Ecuadorean authorities to resolve parallel investigations into the same misconduct, provided such payments are made within one year.

The Office of the Attorney General of Switzerland concurrently announced a parallel resolution, with Gunvor agreeing to pay approximately $98 million to Swiss authorities in connection with their investigation into the misconduct.

Gunvor’s corrupt activities spanned nearly a decade, involving the payment of more than $97 million to intermediaries, knowing that these funds would be used to bribe Ecuadorean officials, including Nilsen Arias Sandoval, a high-ranking official at Petroecuador. The bribes were facilitated through a complex network, including the use of shell companies in Panama and the British Virgin Islands.

In return for these bribes, high-level Ecuadorian officials assisted state-owned entities, acting as fronts for Gunvor, in securing oil-backed loan contracts with Petroecuador. This arrangement allowed Gunvor to sidestep competitive bidding processes and obtain contractual terms that would have been unattainable through legitimate means. Gunvor also gained access to confidential Petroecuador information as part of the corrupt dealings, resulting in illicit profits exceeding $384 million.

Acting Senior Counselor Brent S. Wible of the Justice Department’s Criminal Division emphasized the severity of the charges, stating, “Foreign bribery emboldens corrupt officials and undermines the rule of law. Gunvor’s guilty plea demonstrates that the Criminal Division remains resolute in our efforts to root out bribery and official corruption.”

U.S. Attorney Breon Peace for the Eastern District of New York echoed this sentiment, highlighting the detrimental impact of corruption on public trust, government integrity, and fair business practices. Special Agent in Charge Jeffrey B. Veltri of the FBI Miami Field Office credited the international collaboration of authorities from the Cayman Islands, Colombia, Curacao, Ecuador, Panama, Portugal, Singapore, and Switzerland for the success of the investigation.

Gunvor’s resolution included a range of factors, such as the nature and seriousness of the offense, cooperation with the investigation, and remedial measures taken by the company. Notably, Gunvor’s guilty plea comes on the heels of its prior resolution in October 2019 with the Office of the Attorney General of Switzerland for a corrupt scheme in Congo-Brazzaville and Côte d’Ivoire, demonstrating a pattern of insufficient controls and organizational lapses.

This landmark case serves as a stark reminder of the Justice Department’s commitment to combatting corruption, with previous convictions secured against individuals implicated in Gunvor’s bribery scheme. The FBI Miami Field Office, assisted by the FBI’s International Corruption Unit, spearheaded the investigation, underscoring the global nature of the illicit activities.

Article Credit: https://www.grcreport.com/post/gunvor-s-a-to-pay-over-661m-in-landmark-guilty-plea-for-foreign-bribery-case