post from 2012 discussed the BizJet corporate enforcement action and was
titled "BizJet FCPA Enforcement Action Involves Executive
Conduct." In summarizing that action, the post highlighted DOJ
allegations as to Executive A, Executive B, Executive C, and Sales Manager A.
If the DOJ's rhetoric of holding individuals accountable
in the context of corporate resolutions is to mean anything (as noted in this
prior post, since 2008 approximately 75% of DOJ corporate enforcement have not resulted
in any related individual charges against company employees) the BizJet
corporate action was one where related individual enforcement actions were
to be expected given the DOJ's prior specific allegations concerning the
It turns out that the above individuals were criminally
charged some time ago, but last Friday, in this
release, the DOJ unsealed the actions and revealed the names of the above
Executive A is Bernd Kowalewski; Executive B is
Peter DuBois; Executive C is Neal Uhl; and Sales Manager A is Jald Jensen.
In the release, the DOJ announced as follows.
Kowalewski and Jensen were charged by indictment
filed in U.S. District Court for the Northern District of Oklahoma on Jan. 5,
2012, with conspiring to violate the Foreign Corrupt Practices Act (FCPA) and
to launder money, as well as substantive charges of violating the FCPA and
money laundering. The two defendants are believed to remain abroad.
The DOJ further announced as follows.
DuBois and Uhl pleaded guilty on Jan. 5, 2012, to
criminal informations, and their pleas were unsealed [last Friday].
DuBois pleaded guilty to one count of conspiracy to violate the FCPA and
one count of violating the FCPA. Uhl pleaded guilty to one count of
conspiracy to violate the FCPA. Both defendants were sentenced [last
Friday] by U.S. District Judge Gregory K. Frizzell in the Northern
District of Oklahoma. DuBois's sentence was reduced from a sentencing
guidelines range of 108 to 120 months in prison to probation and eight months
home detention based on his cooperation in the government's
investigation. Uhl's sentence was similarly reduced for cooperation from
a guidelines range of 60 months in prison to probation and eight months home
The conduct at issue in the indictments and
informations is the same core set of conduct at issue in the 2012
BizJet corporate enforcement action. That is, DOJ allegations
that the individuals "paid bribes to officials employed by the Mexican
Policia Federal Preventiva, the Mexican Coordinacion General de
Transportes Aereos Presidenciales, the air fleet for the
Gobierno del Estado de Sinaloa in Mexico, the air fleet for the
Estado De Roraima in Brazil, and the Republica de Panama
Autoridad Aeronautica Civil in exchange for those officials'
assistance in securing contracts for BizJet to perform MRO [aircraft
maintenance, repair and overhaul] services.
This post summarizes the indictments (here
against Kowalewski (the President and CEO of BizJet between 2004
through March 2010) and Jensen (a regional sales manager at BizJet between
2004 and 2010). A future post will summarize the enforcement actions
against DuBois and Uhl. The informations in those cases (here
have been released, but the plea agreements and sentencing documents are
not yet in the public domain.
At its core, the indictment alleges a scheme "to obtain
and retain MRO service contracts and other business for BizJet and
others from foreign government customers, including the Mexican Federal Police,
the Mexican President's Fleet, Sinaloa, the Panama Aviation Authority, the
State of Roraima, and other customers, by paying bribes to foreign officials
employed by such customers." According to the indictment, the bribe
payments were called 'commission,' 'incentives' or 'referral fees." The
indictment also alleges that Kowalewski and others "would and did attempt
to conceal the payments to foreign officials by using Avionica [a California
company owned by Jensen and located at his personal residence that operated
"under the pretense of providing aircraft maintenance brokerage
services"] to funnel the payments to the foreign officials by making
payments in cash delivered by hand to the foreign officials."
The six counts of FCPA anti-bribery violations are based
on the following:
Like the BizJet corporate enforcement action, the
Kowalewski indictment also contains allegations which suggest a complicit board
of directors at the company. The indictment states as follows concerning
a November 2005 board meeting:
The indictment also alleges as follows.
[In January 2010], after receiving an e-mail stating
that the internal auditors of BizJet's parent company would be conducting
a detailed audit of BizJet's incentive payments and requesting that
Kowalewski prepare and make available all relevant documents, Kowalewski
caused deletion software to be installed and run on his computer that erased
content from his computer.
Based on the above allegations, the DOJ charged
Kowalewski with one count of conspiracy to violate the
FCPA's anti-bribery provisions, six counts of FCPA anti-bribery violations.
In addition, the indictment charges one count of money laundering conspiracy
and three counts of substantive money laundering.
At its core, the indictment alleges the same scheme as in
the Kowalewski indictment, including the same six substantive
FCPA anti-bribery violations, as well as money laundering conspiracy and
three counts of substantive money laundering. The Jensen indictment
further alleges FCPA and money laundering forfeiture allegations which state that
"upon conviction" of the offenses, Jensen "shall forfeit" to the U.S. "any
property, real or personal, which constitutes, or is derived from, proceeds
traceable to the offenses."
Acting Assistant Attorney General Mythili Raman stated in
the DOJ release as follows.
The charges announced today allege a conspiracy by
senior executives at BizJet to win contracts in Latin American countries
through bribery and illegal tactics. Former BizJet executives,
including the former president and chief executive officer, allegedly
authorized and caused hundreds of thousands of dollars to be paid directly and
indirectly to ranking military officials in various foreign countries, and two
former executives have pleaded guilty for their roles in the conspiracy.
These charges reflect our continued commitment to holding individuals
accountable for violations of the FCPA, including, as in this instance, after
entering into a deferred prosecution agreement with their employer.
Assistant Director in Charge Valerie Parlave of the FBI's
Washington Field Office stated in the DOJ release as follows.
Business executives have a responsibility to act
appropriately in order to maintain a fair and competitive international
market. The unsealing of these bribery charges, and today's sentencing,
demonstrate that the FBI is committed to curbing corruption and will pursue all
those who try to advance their businesses through bribery.
The former BizJet executive enforcement action
announced last Friday is the first FCPA enforcement action of
2013. The last DOJ FCPA enforcement action (of any kind - corporate
or individual) was in September 2012 and the last time the DOJ brought an FCPA
enforcement action against an individual was in April 2012. (See here for the prior
For additional coverage, see here
from Tulsa World.
Read more articles on the FCPA by Mike
Koehler at FCPA
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