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United States of America v. Keppel Offshore & Marine, Ltd. (KOM)
Eastern District of New York Courthouse - Brooklyn, New York
Case Number: 17-CR-697 (KAM)
Judge: Kiyo A. Matsumoto
Court: United States District Court for the Eastern District of New York
Plaintiff's Attorney: Derek J. Ettinger, David M. Fuhr, Christopher J. Cestaro, Alixandra Smith and Patrick Hein
Defendant's Attorney: Sean Hecker
Description: Brooklyn, NY - Keppel Offshore & Marine Ltd. and U.S. Based Subsidiary Agree to Pay $422 Million in Global Penalties to Resolve Foreign Bribery Case - Guilty Plea by Former Senior Member of Legal Department Unsealed
Keppel Offshore & Marine Ltd. (KOM), a Singapore-based company that operates shipyards and repairs and upgrades shipping vessels, and its wholly owned U.S. subsidiary, Keppel Offshore & Marine USA Inc. (KOM USA), have agreed to pay a combined total penalty of more than $422 million to resolve charges with authorities in the United States, Brazil and Singapore arising out of a decade-long scheme to pay millions of dollars in bribes to officials in Brazil. KOM USA pleaded guilty today in connection with the resolution. In addition, a guilty plea by a former senior member of KOM’s legal department was unsealed.
“Today’s resolution once again underscores the importance of the Department of Justice’s collaboration with foreign authorities to hold corrupt companies and individuals accountable for their crimes, while ensuring the fair and appropriate allocation of fines and penalties,” said Acting Assistant Attorney General Cronan. “This case also represents the first coordinated FCPA resolution with Singapore and the most recent of several coordinated resolutions with Brazil. The Criminal Division is committed to working with our international partners to ensure that honest, law abiding companies are able to compete on a level playing field across the globe.”
“The resolutions with KOM and its U.S. subsidiary are the result of a multinational effort to investigate and prosecute a corruption scheme that resulted in the payment by the defendant companies of over $50 million in bribes to Brazilian officials and in profits for the defendant companies of over $350 million from business corruptly obtained in Brazil,” said Acting U.S. Attorney Rohde. “In an attempt to conceal their crimes, the defendants used the global financial system – including the United States banking system – to disguise the source and disbursement of the bribe payments by passing funds through a series of shell companies. The United States, working with its law enforcement partners abroad, will continue to hold responsible those corporations and individuals who seek to enrich themselves through the corruption of government officials and legitimate governmental functions.”
“The resolution to this investigation shows to those around the world that the FBI and our law enforcement partners are dedicated to work together to bring justice to companies who play outside the rule of law,” said FBI Assistant Director Richardson. “The FBI won’t stand by while individuals operate their business illegally using bribes.”
KOM 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 conspiracy to violate the anti-bribery provisions of the FCPA. The case is assigned to U.S. District Judge Kiyo A. Matsumoto. In addition, KOM USA pleaded guilty and was sentenced by Judge Matsumoto on a one-count criminal information charging the company with conspiracy to violate the anti-bribery provisions of the FCPA. Pursuant to its agreement with the Department, KOM will pay a total criminal fine of $422,216,980, with a criminal penalty due to the United States of $105,554,245, including a $4,725,000 criminal fine paid by KOM USA. As part of the deferred prosecution agreement, KOM also committed to implement rigorous internal controls and to cooperate fully with the Department’s ongoing investigation.
In related proceedings, the company settled with the Ministério Público Federal (MPF) in Brazil and the Attorney General’s Chambers (AGC) in Singapore. The United States will credit the amount the company pays to Brazil and Singapore under their respective agreements, with Brazil receiving $211,108,490, equal to 50 percent of the total criminal penalty, and Singapore receiving up to $105,554,245, equal to 25 percent of the total criminal penalty.
The Department also unsealed charges today against a former senior member of KOM’s legal department, who pleaded guilty to one count of conspiracy to violate the FCPA on Aug. 29, 2017 in the Eastern District of New York. He is awaiting sentencing.
According to admissions and court documents, beginning by at least 2001 and continuing until at least 2014, KOM conspired to violate the FCPA by paying approximately $55 million in bribes to officials at the Brazilian state-owned oil company Petrobras and to the then-governing political party in Brazil, in order to win 13 contracts with Petrobras and another Brazilian entity. KOM effectuated and concealed the bribe payments by paying outsized commissions to an intermediary, under the guise of legitimate consulting agreements, who then made payments for the benefit of the Brazilian officials and the Brazilian political party.
In reaching the resolutions with the Department, KOM and KOM USA received credit for their substantial cooperation with the Department’s investigation and for taking extensive remedial measures. For example, KOM has terminated and otherwise disciplined employees involved in the criminal conduct, and it has implemented an enhanced system of compliance and internal controls to address and mitigate corruption risks. Accordingly, the criminal penalty reflects a 25 percent reduction off the bottom of the applicable U.S. Sentencing Guidelines fine range.
The case is being investigated by the FBI’s International Corruption Squad in Houston.
The MPF in Brazil and the AGC in Singapore provided significant assistance in this matter, as did the Criminal Division’s Office of International Affairs.
The Criminal Division’s 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.
Outcome: Defendant agreed to pay $422 million.