by T. GormanPosted on Posted in SECActions

A conspiracy among Venezuelan officials to solicit bribes in exchange for business from state owned firms and instrumentalities has resulted in twelve guilty pleas on corruption charges to date. The latest guilty plea in the ongoing investigation involves a former Venezuelan official who is also a U.S. citizen. U.S. v. De Leon, No. 4:17-cr-00514 (S.D. Tx.).

Luis Carlos De Leon-Perez is the most recent official to plead guilty in the investigation. Mr. De Leon was charged along with others including Nervis Villalobos, Cesar Rincon, Rafel Reiter and Alejandro Isturiz. Each defendant is a citizen of Venezuela. Generally the defendants are charged with conspiracy to commit money laundering.

The scheme on which the charges are based took place over a two year period beginning in 2011. Each of the defendants was an official of Petroleos de Venezuela S.A. or PDVSA, the state owned and controlled energy company, one of its subsidiaries or another Venezuelan government agency or instrumentality. Collectively the defendants, known as the management team, had significant influence with PDVSA. The team solicited PDVSA vendors for bribes and kickbacks. The proceeds of the scheme were then laundered through a series of international transactions.

Mr. De Leon was arrested in Spain in October 2017 and extradited to the United States after a 20 count indictment was returned against him and others by a grand jury in the Southern District of Texas. This week Mr. De Leon pleaded guilty to one count of conspiracy to violate the FCPA and one count of conspiracy to commit money laundering. In connection with his guilty plea Mr. De Leon admitted to engaging in the two year long scheme. He and other officials of PDVSA solicited vendors for bribes in exchange for assistance with obtaining business, according to the admissions.

As part of the overall scheme, Mr. De Leon, according to his admissions, solicited and directed bribes from Roberto Rincon of The Woodlands, Texas and Jose Shiera Bastidas of Coral Gables, Florida for PDVSA officials. In return the two executives receive assistance with securing business that included their U.S. firms. Mr. De Leon also admitted to working with Messrs. Rincon and Shiera to launder and conceal the proceeds of the bribery scheme. A series of financial transactions were used that included wiring funds to accounts in Switzerland held in the names of other than those of the co-conspirators. At least $27 million in bribes have been paid. Defendant De Leon also admitted bribing other U.S. individuals and their firms and transmitting the funds to PDVSA officials. Mr. De Leon is awaiting sentencing.

Those who have pleaded guilty, in addition to Mr. De Leon, include Cesar Rincon, Roberto Rincon and Jose Shiera.

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by T. GormanPosted on Posted in SECActions

The Manhattan U.S. Attorney’s Office secured an indictment against a Chinese National for insider trading. The Defendant, Michael Yin, remains at large. U.S. v. Yin, No. 1:14-cr-00494 (S.D.N.Y.).

Over a period of about one year, beginning in March 2016, Mr. Yin is alleged to have obtained inside information from his friend and business associate, Benjamin Chow. The information centered on transactions involving Lattice Semiconductor Corporation and private equity funds that were managed by Mr. Chow. Specifically, as the managing director of one firm and the managing partner of another Mr. Chow secured information concerning the potential merger agreements which he furnished to his friend.

The two men had multiple meetings in Beijing, China and exchanged voice and text messages. Through those communications Mr. Yin secured information regarding each proposed transaction involving Lattice. For example, in one instance Mr. Chow told his friend that they soon expected to execute the merger agreement with Lattice, according to the translation of the conversation. Mr. Yin purchased shares of Lattice the next day. He continued to purchase shares over the next three weeks, acquiring about 2.2 million. Overall Mr. Yin had trading profits of about $5 million. Mr. Yin was charged with one count of conspiracy to commit securities fraud and thirteen counts of securities fraud.

Previously, Mr. Chow was charged with conspiracy and securities fraud in U.S. v. Chow, No. 1:17-cr-00667 (S.D.N.Y.). Following trial a jury found Mr. Chow guilty of one count of conspiracy and seven counts of securities fraud. Sentencing is scheduled for August 20, 2018.

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