Included in this issue: F.H. Bertling Ltd and seven individuals charged with bribery; U.S Drops Libor Charges Against ICAP Trio After U.K. Acquittals; General Motors sentenced following asbestos contamination and more...

Bribery and Corruption

F.H. Bertling Ltd and seven individuals charged with bribery

F.H. Bertling Ltd, a logistics and freight operations company, and seven individuals have been charged with one count of making corrupt payments, contrary to section 1 of the Prevention of Corruption Act 1906.

Between January 2005 and December 2006, Peter Ferdinand, Marc Schweiger, Stephen Emler, Joerg Blumberg, Dirk Juergensen, Giuseppe Morreale, Ralf Peterson and F.H. Bertling Ltd conspired together and with others to bribe an agent of Sonangol, the Angolan state oil company, to further F.H. Bertling’s business operations in that country.

F.H. Bertling Ltd and the above-named individuals have been requisitioned to appear at Westminster Magistrates’ Court on 4 August 2016.

SFO, 13 July 2016

SFO secures second DPA

The SFO's second application for a Deferred Prosecution Agreement has been approved.

It is understood that the counterparty to the DPA is a UK SME that cannot currently be named due to ongoing legal proceedings.

It is understood that the matters pertaining to the DPA relate to allegations of conspiracy to corrupt, contrary to section 1 of the Criminal Law Act 1977, conspiracy to bribe, contrary to section 1 of the same Act, and failure to prevent bribery, contrary to section 7 of the Bribery Act 2010. This was all in connection with contracts to supply its products to customers in a number of foreign jurisdictions between June 2004 and June 2012.

As a result of the DPA, the company has been ordered to pay £6,553,085, comprised of a £6,201,085 disgorgement of gross profits and a £352,000 financial penalty. £1,953,085 of the disgorgement will be paid by the SME’s US registered parent company as repayment of a significant proportion of the dividends that it received from the SME over the indictment period.

SFO, 8 July 2016

Defense Contractor Employee Arrested for Selling Satellite Secrets to Undercover Agent posing as Foreign Spy

The US Department of Justice issued a statement that a defense contractor, Gregory Allen Justice, was arrested on charges of economic espionage and violations of the Arms Export Control Act for his attempts to sell sensitive satellite information to a person he believed to be a foreign intelligence agent, but who was in fact an FBI undercover agent.

In exchange for providing these materials, Mr Justice allegedly sought and received cash payments.

If convicted, Mr Justice faces a statutory maximum penalty of 15 years in prison for the economic espionage charge and a statutory maximum penalty of 20 years in prison for violating the Arms Export Control Act.

DOJ, 8 July 2016

Ex-Louis Berger executives sentenced in U.S. over foreign bribe scheme

Two former senior executives at Louis Berger, a New Jersey construction management company, have been sentenced for their roles in a scheme to secure government contracts by bribing foreign officials in India, Indonesia, Vietnam and Kuwait.

James McClung, 60, was sentenced to one year in prison. Richard Hirsch, 62, was sentenced to two years of probation and fined $10,000.

Both men pleaded guilty in July 2015 to two counts including that they violated the Foreign Corrupt Practices Act.

Reuters, 8 July 2016

Brazil police arrest 19 in Eletrobras nuclear-plant bribe probe

Brazilian police have arrested 19 people as part of a probe into a graft scheme at a nuclear power plant owned by state-led utility Eletrobras that has allegedly paid out more than 200 million reais ($60 million) in bribes.

According to federal prosecutors in Rio de Janeiro, the alleged bribes were paid to senior executives of Eletronuclear, the nuclear power unit of Centrais Eletricas Brasileiras SA, as Eletrobras is formally known.

In return, executives allegedly let construction companies such as Andrade Guitierrez inflate the cost of the 17.7 billion real ($5.3 billion) Angra 3 nuclear reactor 100 kilometers west of Rio de Janeiro, kick backs were then paid to politicians and political parties.

Reuters, 6 July 2016


U.S Drops Libor Charges Against ICAP Trio After U.K. Acquittals

U.S. prosecutors have dropped charges against three former ICAP brokers accused of manipulating Libor after they were acquitted in the U.K.

Darrell Read, Colin Goodman and Danny Wilkinson were acquitted in relation to such charges in the UK in January following a four-month trial.

Bloomberg, 7 July 2016

Former Rabobank Derivatives Trader Pleads Guilty for Scheme to Manipulate LIBOR Benchmark

Paul Thompson, a former Rabobank trader has pleaded guilty to conspiracy to commit wire fraud and bank fraud for his role in a scheme to manipulate LIBOR to Rabobank’s advantage.

Thompson traded derivative products tied to the USD and Japanese Yen LIBOR rates. He admitted that in an effort to increase the profitability of his derivative positions, he entered into a scheme with several other Rabobank employees to influence the rate to Rabobank’s advantage.

Sentencing has been set for 9 November 2016.

DOJ, 7 July 2016

Health and Safety

General Motors sentenced following asbestos contamination

General Motors UK Ltd has been fined £120,000 after it was discovered that asbestos boarding panels had contaminated a site.

The motor company was prosecuted by the Health and Safety Executive (HSE) after work being undertaken at its North Road, Ellesmere Port site in 2014 exposed contractors to risks associated with asbestos.

General Motors UK Ltd pleaded guilty to a single breach of Section 3 (1) the Health and Safety at Work etc. Act 1974 and was fined £120,000 and ordered to pay £11,779 in prosecution costs

SHP, 12 July 2016

Inquest rules golf buggy lake death as ‘accidental’

An inquest jury has found that the death of 20-year-old Oliver Floyd, who drowned after a weed spraying buggy toppled into a lake at Celtic Manor golf resort in Newport, was an accident.

Oliver’s father Nicholas Rawlings, an experienced groundsman, was driving the buggy at the time of the accident, when the vehicle lost traction on Celtic Manor Resort’s Twenty Ten course last March. The inquest heard the ground at the golf course was saturated because it had been raining and that Mr Rawlings had been “worried” about continuing to spray the course because of the conditions

Wendy James, the assistant coroner for Gwent, said in her summary that the embankment was at an angle of 17.5 degrees, but that the vehicle should not have been driven on a slope more than 14 degrees

After the inquest, Mr Floyd’s family said they were planning on taking legal advice, and said they still had some concerns about what they had heard during the hearing.

SHP, 6 July 2016

Support Worker sentenced after severely disabled woman choked and died

A senior support worker from Leeds has been sentenced after a severely disabled woman choked and later died while in her care

Leeds Crown Court heard Tracey Gilboy, a senior support worker at an adult day care centre in Leeds allowed a sweet to be given to Alison Evers, a 34- year-old, severely disabled woman who had not developed the ability to chew and therefore required a soft diet. She choked and later died in hospital.

An investigation by the Health and Safety Executive (HSE) into the incident which occurred on 20 April 2012 found that Tracey Gilboy failed to take reasonable care for the safety of Alison Evers in a way that almost immediately set in motion a chain of events that directly led to her death.

Tracey Ann Gilboy pleaded guilty to breaching Section 7(a) of the Health and Safety at Work etc Act 1974, and was sentenced to 80 days imprisonment, suspended for twelve months.

HSE, 8 July 2016

London borough council fined for safety failings

A London borough council has been fined after a road worker suffered serious injury whilst cutting trees.

An employee of London Borough of Havering sustained a serious cut injury just above his left knee after a Sthil cut-off saw he was using was fitted with an inappropriate blade and which he then used to cut tree roots and branches. The blade became stuck and on pulling it free the blade ran across the top of his left knee.

He suffered a deep cut above the left knee damaging ligaments and cartilage requiring sixty stitches.

An investigation by the Health and Safety Executive (HSE) into the incident found that the wrong equipment was being used for the task. No risk assessment was conducted for the use of the saw and blade.

London Borough of Havering pleaded guilty to breaching Regulations 4(2) and 4(3) of the Provision and Use of Work Equipment Regulations 1998, and was fined £500,000 and ordered to pay costs of £8,240.

HSE, 6 July 2016

A rocket motor company fined for safety failings

Roxel (UK Rocket Motors) Limited, an engineering company, has been fined £380,000 for safety failings.

An employee was inspecting a rocket motor for damage received during the manufacturing process.

He used a fibre optic light to illuminate a conduit on the charge, and the propellant ignited by the heat from the light. The charge burned for about 10 seconds sending flames and gases out of both ends of the charge until it burnt out. The room where the ignition occurred was set on fire. Also present in that room were four explosives charges and a Vulcan rocket motor, there was also a further 230kg of explosive charges in the magazine that is next door to the room, which still had the magazine doors open. No one was injured during the incident.

An investigation by the HSE into the incident found that there was a lack of assessments of the risks and no safe system of work in place. The emergency plan was not implemented.

Roxel (UK Rocket Motors) Limited pleaded guilty to breaching Sections 2(1) and 3(1) of the Health and Safety at Work etc. Act 1974, and Regulation 12 of the Control of Major Accident Hazards 2015, and was fined £386,000 and ordered to pay costs of £60,000.

HSE, 8 July 2016

Money Laundering

HSBC avoided US money laundering charges because of 'market risk' fears

It has been reported that a US Congressional report revealed that US officials refused to prosecute HSBC for money laundering in 2012 because of concerns within the Department of Justice that it would cause a "global financial disaster".

The report alleges that UK officials, including Chancellor George Osborne, intervened and influenced the outcome by warning that a prosecution could lead to market turmoil.

HSBC was accused of allowing drug cartels to use US banks to launder funds. The bank, which has its headquarters in London, paid a $1.92bn (£1.48bn) settlement but did not face criminal charges . No top officials at HSBC faced any charges.

BBC News, 11 July 2016


Treasury Sanctions North Korean Senior Officials and Entities Associated with Human Rights Abuses

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has expanded its sanction in relation to North Korea by designating top officials of the North Korean regime, including North Korean leader Kim Jong Un, ten other individuals, and five entities, who have engaged in, facilitated, or been responsible for a violation of human rights by the North Korean government.

U.S. Department of the Treasury, 7 July 2016


Major win for Microsoft in 'free for all' data case

An appeals court has ruled that the US government cannot force Microsoft to give authorities access to the firm's servers located in other countries. The ruling overturns an order granted by a court in Manhattan in 2014.

The US Department of Justice (DOJ) had wanted to access a server in Ireland, as part of an investigation into a drugs case. If the DOJ decides to appeal, the case could be referred to the US Supreme Court.

The decision is being seen as a precedent for protecting the privacy of cloud computing services.

BBC News, 14 July 2016

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Nichola Peters

Nichola Peters

Partner, Global Investigations

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