Published: Sat, December 24, 2016
Hi-Tech | By Merle Christensen

Justice Department Announces Largest Corporate Bribery Penalty Ever

Justice Department Announces Largest Corporate Bribery Penalty Ever

The latter said the company will pay a fine of at least $2.6 billion and up to $4.5 billion, while Braskem will pay $957 million to settle the case.

The settlement reached between prosecutors and Odebrecht cracks wide open the global grand corruption machine, exposing a financial network involving shell companies and several banks to funnel more than $788 million dollars in bribes to corrupt government officials and political parties and their leaders in Angola, Argentina, Colombia, Dominican Republic, Ecuador, Guatemala, Mexico, Mozambique, Panama, Peru and Venezuela.

The Department said it has agreed to credit the criminal penalties paid to Brazilian and Swiss authorities as part of its agreement with the company.

In a global settlement with the SEC, the Department of Justice, and authorities in Brazil and Switzerland, Braske m agreed to pay $325m in disgorgement, including $65m to the SEC and $260m to Brazilian authorities.

The company is at the center of the mushrooming probe at state-run oil giant Petrobras, which has ensnared Brazilian politicians and business people across the board.

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Odebrecht is one of the largest construction firms in Latin America.

The Federal General Prosecutor here in Brazil, which is conducting plea-bargain negotiations with Odebrecht employees, had never revealed these numbers or information, alleging the need for secrecy. Odebrecht and CNO were fined CHF4.5 million and ordered to pay additional forfeited funds, compensation and procedural costs - a total bill of CHF117 million.

"Odebrecht and Braskem used a hidden but fully functioning Odebrecht business unit - a 'Department of Bribery, ' so to speak - that systematically paid hundreds of millions of dollars to corrupt government officials in countries on three continents", said Deputy Assistant Attorney General Sung-Hee Suh.

According to USA prosecutors, Odebrecht said it was able to pay US$2.6 billion although it agreed the appropriate criminal fine would be US$4.5 billion.

Former Odebrecht's CEO, Marcelo Odebrecht, is now serving a 19-year sentence prison on corruption charges in Brazil, but Reuters reports he turned state's witness and is expected to be released by the end of 2017. The judge scheduled sentencing for April, when the deal would become finalized. Both companies also agreed to continue to cooperate with authorities, implement compliance improvements and become subject to oversight by external monitors.

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