FCPA enforcement officials have repeatedly emphasized that they intend to focus on individuals as an effective means of halting possible violations. A case unsealed yesterday underscores this point.
The action, based on an indictment returned last year in the Northern District of Illinois but unsealed on April 2, 2014, names as defendants six foreign nationals including one foreign government official. Those named as defendants are:
Ø Dmitry Firtash, a Ukrainian national;
Ø Andras Knopp, a Hungarian businessman;
Ø Suren Gevorgyan, a Ukraine national;
Ø Gjendra Lal, an Indian national and permanent U.S. resident;
Ø Periyasamy Sunderalingam of Sri Lanka; and
Ø K.V.P. Ramachandra Rao, a Member of Parliament in India who was an official of the state government of Andhra Pradesh and a close advisor to the deceased chief minister of the state of Andhra Pradesh.
The case centers on $18.5 million in bribes allegedly paid to secure mining licenses in the Indian coastal state of Andhra Pradesh. The mining project was expected to yield over $500 million annually from the sale of titanium products. Portions of those sales would be to Company A, based in Chicago, Illinois.
Mr. Firtash controls Group DF, an international conglomerate of companies directly and indirectly owned by Group DF Limited, a British Virgin Islands firm. The group includes a series of companies from Austria, Hungary and Switzerland. In April 2006 a member of Group DF entered into a joint venture agreement with the state government of Andhra Pradesh. The purpose was to mine various minerals, including one which may be processed into various titanium-based products.
The next year company A entered into an agreement with a member of Group DF to work toward a deal under which it would be supplied 5 million to 12 million pounds annually of titanium sponge from the Indian project. The project required licenses and approval from both the Andhra Pradesh state government and the central government of India. Mr. Rao is alleged to have solicited bribes for himself and others in return for the approval of the necessary licenses and approvals. He met and discussed the matter with Defendant Sunderalingam.
Mr. Firtash met with Indian government officials, including the Chief Minister, to discuss the project and its purpose, according to the allegations. He ultimately authorized the payment of $18.5 million in bribes to both state and central government official in India to secure the necessary licenses and approvals. Mr. Firtash also directed subordinates to create documents to make it appear that the payments were for legitimate reasons.
Mr. Knopp, who supervised the enterprise, also met with Indian officials and representatives of Company A. In addition, Mr. Gevorgyan met with Company A in Seattle. Overall 57 money transfers were made in furtherance of the conspiracy between late April 2006 and mid-July 2010. The defendants are alleged to have used U.S. financial institutions to facilitate the payment of the bribes.
The five count indictment charges each defendant with one count of racketeering conspiracy and money laundering conspiracy and two counts of interstate travel in aid of racketeering. Each defendant, except Mr. Rao, was charged with one count of conspiracy to violate the FCPA. The indictment seeks the forfeiture from Mr. Firtash of his interests in Group DF Limited and its assets and over $10.59 million from all six defendants.