International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Tuesday, January 28, 2020

Miami-Based Businessman Pleads Guilty to FCPA and Money Laundering Violations in Scheme Involving PetroEcuador Officials

An Ecuadorian businessman living in Miami, Florida, pleaded guilty today in connection with a $4.4 million bribery and money laundering scheme that funneled bribes to public officials of Empresa Pública de Hidrocarburos del Ecuador (PetroEcuador), the state-owned and state-controlled oil company of Ecuador, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office.

Armengol Alfonso Cevallos Diaz (Cevallos), 57, pleaded guilty before U.S. District Judge Rodney Smith of the Southern District of Florida to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and one count of conspiracy to commit money laundering.  Sentencing is scheduled for April 2, 2020.   

Cevallos admitted at the plea hearing that, from 2012 through 2015, he conspired with others to pay bribes of $4.4 million to PetroEcuador officials by using the mails and means and instrumentalities of interstate commerce, including U.S.-based companies and U.S.-based bank accounts, in order to obtain and retain business.  Cevallos also admitted that he conspired with others to conceal and promote the bribe scheme by laundering funds through Miami-based shell companies and bank accounts and by purchasing properties in the Miami area for the benefit of certain PetroEcuador officials.  Specifically, as alleged in the indictment, Cevallos admitted that he solicited and intermediated bribe payments from an oil services company for the benefit of PetroEcuador officials, and that he helped launder those bribes and others he had paid to PetroEcuador officials on behalf of Ecuadorian contractors and his own companies. 

Today’s plea follows 12 public charges and guilty pleas against other individuals in the department’s ongoing investigation into bribery and money laundering involving PetroEcuador.  The individuals who have been charged to date for their roles in the bribery and money laundering schemes include former PetroEcuador officials who received and concealed the bribe payments, businessmen and contractors who paid the bribes to obtain lucrative oil services contracts from PetroEcuador, and financial advisors and other intermediaries who enabled and facilitated the bribery through the use of U.S. and offshore companies and bank accounts. 

The FBI’s International Corruption Squad in Miami is investigating the case.  Assistant Chiefs David Fuhr and Lorinda Laryea and Trial Attorneys Jonathan Robell and Katherine Raut of the Criminal Division’s Fraud Section and Trial Attorneys Mary Ann McCarthy and Randall Warden of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) are prosecuting the case.

IRS-Criminal Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the U.S. Marshals Service and the Criminal Division’s Office of International Affairs have provided significant assistance in this case, as have public authorities in, among other countries, Ecuador and Panama.

MLARS’s Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system.

https://lawprofessors.typepad.com/intfinlaw/2020/01/miami-based-businessman-pleads-guilty-to-fcpa-and-money-laundering-violations-in-scheme-involving-petroecuador-officials.html

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