Top 10 International Anti-Corruption Developments for June 2023

Designed for busy in-house counsel, compliance professionals, and anti-corruption lawyers, this newsletter summarizes some of the most important international anti-corruption law and enforcement developments from the past month, with links to primary resources. This month we ask: What were the most recent foreign bribery charges brought by the UK Serious Fraud Office (SFO)? How would a new bill strengthen Australia’s foreign bribery law? How did a former telecom executive convicted of foreign bribery avoid further prison time? The answers to these questions and more are here in our June 2023 Top 10.

1. Mining Executives and Consultant Charged in UK for Sierra Leone Bribery Scheme

On June 16, 2023, the SFO announced that Graeme Hossie and Rachel Rhodes, the former CEO and CFO, respectively, of London Mining Plc, and international business consultant Ariel Armon were charged with conspiring to make multiple corrupt payments to secure preferential treatment in Sierra Leone. The SFO’s announcement did not provide further details on the alleged bribery scheme. London Mining developed and operated iron ore mines and had operations in Brazil, China, Colombia, Saudi Arabia, and Sierra Leone but is no longer in business. The SFO opened an investigation into the allegations of bribery and corruption in 2016. The defendants are currently scheduled to appear before Southwark Crown Court in July 2023 in connection with these charges.

2. Australia Proposes Tougher Foreign Bribery Law

On June 22, 2023, Australian Attorney General Mark Dreyfus KC announced new legislation, the Combatting Foreign Bribery Bill 2023, which would amend the country’s decades-old foreign bribery law. The proposed amendments would remove the requirement for prosecutors to prove that a defendant had a specific advantage in mind when the defendant paid the bribe, create an offense for corporate failure to prevent foreign bribery by an “associate” (which would include officers, employees, agents, and contractors), and expand the definition of a foreign public official to include prospective candidates for public office. According to the Explanatory Memorandum from the attorney general explaining the proposals, “[t]hese amendments seek to overcome the limitations of the current foreign bribery offence which has proven to be overly prescriptive and difficult to use,” as “evidenced by the low number of foreign bribery prosecutions in Australia.” The attorney general noted that the OECD Working Group on Bribery has expressed concerns about this low level of enforcement, given the high-risk regions and sectors in which Australian companies operate. The Australian Parliament failed to pass earlier revisions to the foreign bribery law in 2017 and 2019. Unlike earlier attempts, the 2023 bill does not include a proposal to create deferred prosecution agreements (DPAs). (See our April 2017 Top 10 for more on Australia’s interest in enacting DPAs.)

3. European Parliament Issues Recommendations on Anti-Corruption and Transparency Rules

On June 1, 2023, the European Parliament’s Special Committee on foreign interference in democratic processes issued its recommendations for reform of the European Parliament’s rules on transparency, integrity, accountability, and anti-corruption. Citing numerous cases of alleged foreign interference in European Parliament, including alleged attempts by Qatar and Morocco to bribe members of Parliament (colloquially known as “Qatargate”) and suspicions of corruption involving three sitting Members of the European Parliament (MEP), the Special Committee recommended a variety of measures. These include revisions to the MEP Code of Conduct, increased security training, enhanced diligence around private contractors (particularly those owned by non-EU companies or states), and more stringent transparency rules related to foreign funding of EU-related lobbying or trips for EU officials. The Special Committee also specifically called out efforts by both China and Russia to, through diplomatic channels, engage in foreign information manipulation and interference across a wide range of topics, including Russia’s invasion of Ukraine. The Special Committee called for increased cooperation between intelligence services, the police, and the judiciary to combat corruption and foreign interference. (For more on Europe’s response to recent corruption allegations involving the European Parliament, see our January 2023, February 2023, and May 2023 Top 10s.)

4. DOJ Withdraws FCPA Count Against Cryptocurrency Executive

On June 14, 2023, the U.S. Department of Justice (DOJ) voluntarily withdrew a Foreign Corrupt Practices Act (FCPA) count and four other charges against Sam Bankman-Fried, the founder of now-bankrupt cryptocurrency exchange FTX.[1] The five charges had been added to the original indictment against Bankman-Fried in March 2023 after he was extradited from the Bahamas. The FCPA count alleged that in November 2021, Bankman-Fried directed employees of Alameda Research, a quantitative cryptocurrency trading firm that Bankman-Fried also founded, to transfer approximately $40 million in cryptocurrency to a private cryptocurrency wallet intended for the benefit of one or more Chinese government officials in order to regain access to digital assets that had been frozen by Chinese law enforcement authorities. Shortly after the superseding indictment was returned, Bankman-Fried’s attorney stated that he intended to move to dismiss the new charges on the ground that post-extradition charges violate the U.S.-Bahamas extradition treaty. DOJ conceded that the treaty requires consent from the Bahamian government before it can bring any new charges, agreed to sever the charges in order to avoid a delay in trying the original charges, which are currently scheduled to be tried in October 2023, and asked the court to set a separate trial for the new charges in early 2024.

5. U.S. District Judge Explains Reasons for Dismissing FCPA Charges Related to Venezuela Bribery Scheme for a Second Time

On June 6, 2023, Southern District of Texas Judge Kenneth Hoyt issued a memorandum explaining his May 2023 dismissal with prejudice of FCPA and money laundering charges against Paulo Casquireo-Murta, a former asset manager.[2] The charges against Murta related to an alleged scheme by U.S. businesses to bribe officials of Venezuela’s national oil company, Petróleos de Venezuela, S.A. (PDVSA), in exchange for assistance in obtaining PDVSA contracts and receiving payment priority. Judge Hoyt’s previous order dismissing the charges against Murta on jurisdictional grounds was reversed in February 2023, and the case was remanded for further proceedings. Before the reversal, Murta had filed a Speedy Trial Act motion, which Judge Hoyt revisited upon remand. 

According to Judge Hoyt, DOJ improperly moved to continue the trial prior to the first dismissal in order to litigate, pursuant to the Classified Information Procedures Act (CIPA), the discoverability of classified material. Judge Hoyt “conclude[d] that the government intentionally used non-discoverable, irrelevant material as a faux pas basis for delaying Murta’s trial because it was unprepared.” This conclusion was based on Judge Hoyt’s findings that DOJ knew of the classified materials at least several months before filing its CIPA motion and that the classified materials were “irrelevant to trial.” (In several instances, Judge Hoyt also opined that Murta should be tried in Portugal, rather than in the United States.)

Although some commentators have trumpeted Judge Hoyt’s decision as establishing a precedent for dismissing FCPA cases on Speedy Trial Act grounds, the decision actually has the potential to incentivize prosecutors to sit on potentially exculpatory classified evidence rather than bringing close calls forward so that a court can decide whether classified materials should be disclosed to defendants under Brady or Rule 16—if taking the time to “err on the side of caution” means that a court will dismiss an indictment with prejudice if the court ultimately determines that the materials are not discoverable, then prosecutors may feel it is more prudent to resolve all doubts against disclosure. This would seem counter to most defendants’ interests. Moreover, although Judge Hoyt was concerned with how long it took DOJ to file a CIPA motion after learning of the potentially discoverable classified materials, his finding does not reflect the realities of the internal deliberations that take place—both within DOJ and between DOJ and the owners of the potentially discoverable classified information—in the run up to a CIPA motion. The potential disclosure of classified information is not an issue that the government takes lightly, nor should it. Although Speedy Trial Act findings are entitled to more deference on appeal than pure legal issues, this second dismissal of the charges against Murta also seems like a candidate for reversal.

(For more on the Murta prosecution, see our September 2019, July 2022, February 2023, and May 2023 Top 10s.)

6. Austrian Banker to be Extradited from London to the United States in Connection with Brazil Bribery Scheme

On June 5, 2023, a London court ruled that Peter Weinzierl, the former chief executive of an Austrian bank, should be extradited to the United States to face charges related to his alleged role in helping a Brazilian construction company launder bribes to public officials in multiple countries and to avoid paying taxes in Brazil. Weinzierl and fellow Austrian banker Alexander Waldstein were charged in May 2021 in the Eastern District of New York with four counts of money laundering. While Waldstein remains at large, extradition hearings for Weinzierl began in November 2022, during which he argued that his extradition was abusive because he claims he was lured to London by a U.S. intelligence agent posing as a business associate who wanted a lunch meeting. The London court rejected the luring and abuse allegations explaining an abuse standard requires additional features, such as forcible abduction or mistreatment.

7. Former Venezuelan Official Sentenced in Connection with Bribery and Money Laundering Scheme

On June 12, 2023, Alvaro Ledo Nass, the former general counsel for PDVSA, was sentenced[3] in the Southern District of Florida to three years in prison following his March 2023 guilty plea to one count of conspiracy to commit money laundering. In a proffer filed with his plea, Nass admitted to engaging in a bribery and money laundering scheme involving PDVSA that included, among others, another PDVSA legal counsel, Carmelo Urdaneta Aqui, who was sentenced to 52 months’ imprisonment in June 2022 following a July 2021 guilty plea to related charges. In addition to his prison sentence, Nass must forfeit more than $11.5 million he admitted receiving as part of the alleged scheme and pay a fine of $7,500.

8. Former Swedish Telecom Executive Sentenced in Connection with Djibouti Bribery Scheme

On June 28, 2023, Carlo Alloni, a former Telefonaktiebolaget LM Ericsson (“Ericsson”) executive, was sentenced in the Southern District of New York to time served following his May 2018 guilty plea to one count of conspiring to violate the FCPA related to his role in an alleged scheme to bribe Djibouti government officials to assist Ericsson in winning contracts with the Dijbouti state-run telecommunications company.[4] In moving for a downward departure from the sentence calculated under the U.S. Sentencing Guidelines, DOJ stated that Alloni “provided valuable assistance” in connection with DOJ’s December 2019 FCPA resolution with Ericsson and its Egyptian subsidiary, DOJ’s charges against Ericsson’s former Horn of Africa account manager Afework “Affe” Bereket (announced in September 2021), and Swedish law-enforcement authorities’ investigation of the same alleged conduct.[5] (For more on the Ericsson case see our December 2019, May 2021, September 2021, June 2022, December 2022, and March 2023 Top 10s).

9. Mexico President Vows to Clean Up Corruption at Food Security Agency Segalmex

On June 29, 2023, Mexican President Andres Manuel Lopez Obrador vowed to clean up cases of fraud and corruption at Seguridad Alimentaria Mexicana (“Segalmex”), a government agency aimed at promoting food self-sufficiency in the agricultural sector created by the Lopez Obrador administration in January 2019. Segalmax has been the target of multiple accusations of corruption, similar to its predecessor agencies. Over 80 people, including more than 41 former public servants, have been charged in connection with the various Segalmax allegations. Lopez Obrador described the Segalmex case as the only corruption case his government has faced during his tenure.

10. Paris Olympics Under Scrutiny for Corruption and Embezzlement

On June 20, 2023, French police searched the offices of the Paris 2024 Olympics Committee. According to reports, French prosecutors have been investigating suspected embezzlement of public funds since 2017, the year Paris was picked by the International Olympic Committee as the 2024 host, and since 2022 have been investigating suspected conflicts of interest, identified through an audit conducted by the French Anti-Corruption Agency, involving several contracts between the organizing committee and Solideo, the company in charge of Olympic facilities. Solideo’s offices were also searched. Although the Paris Olympics investigation is in an early stage, previous Olympics have been the subject of corruption allegations. In August 2022, for example, a former member of the 2020 Tokyo Olympics was arrested for allegedly accepting bribes in connection with the designing of the uniforms for the Japanese Olympic and Paralympic teams.

[1] Letter from the U.S. Attorney’s Office to Judge Kaplan, United States v. Samuel Bankman-Fried, Case No. 1:22-cr-00673-LAK, ECF No. 162 (S.D.N.Y. June 14, 2023).

[2] Memorandum and Order, United States v. De Leon-Perez et al., Case No. 4:17-cr-00514, ECF No. 482 (S.D. Tex. June 6, 2023).

[3] Sentencing Order, United States v. Alvaro Ledo Nass, Case No. 1:23-cr-20089-KMW, ECF No. 31 (S.D. Fla. June 15, 2023).

[4] Sentencing Order, United States v. Carlo Alloni, Case No. 1:18-cr-350-GBD, ECF No. 39 (S.D.N.Y. June 29, 2023).

[5] Letter from the U.S. Attorney’s Office to Judge Daniels, United States v. Carlo Alloni, Case No. 1:18-cr-350-GBD, ECF No. 37 (S.D.N.Y. June 14, 2023).