Credit Suisse’s Investment Bank in Hong Kong Agrees to Pay $47 Million Criminal Penalty for Corrupt Hiring Scheme that Violated the FCPA

Credit Suisse (Hong Kong) Limited (CSHK), a Hong Kong-based subsidiary of Credit Suisse Group AG (CSAG), a Swiss-based issuer of publicly traded securities in the United States, reached a resolution with the Department of Justice and agreed to pay a $47 million criminal penalty for its role in a scheme to corruptly win banking business by awarding employment to friends and family of Chinese officials.

The Department and CSHK entered into a non-prosecution agreement, and CSHK agreed to pay a criminal penalty of $47,029,916 to resolve the matter. As part of the agreement, CSHK and its parent company Credit Suisse AG also agreed to continue to cooperate with the Department in any ongoing investigations and prosecutions relating to the conduct, to enhance their compliance programs and to report to the Department on the implementation of their enhanced compliance programs. The Department reached this resolution based on a number of factors, including that CSHK did not voluntarily and timely disclose the conduct at issue. CSHK received partial credit for its and its parent company’s cooperation with the criminal investigation, including making foreign-based employees available for interviews in the United States and producing documents to the government from foreign countries in ways that did not implicate foreign data privacy laws. However, CSHK did not receive additional cooperation credit because its cooperation was reactive and not proactive. Additionally, CSHK did not receive full credit for remediation because it failed to sufficiently discipline employees who were involved in the misconduct. Based on these considerations, the company received a non-prosecution agreement and an aggregate discount of 15 percent off the bottom of the U.S. Sentencing Guidelines fine range.

In related proceedings, Credit Suisse Group AG also settled with the U.S. Securities and Exchange Commission (SEC). Under the terms of its resolution with the SEC, Credit Suisse Group AG agreed to pay a total of $24,989,843 in disgorgement of profits and $4,833,961 in prejudgment interest.

https://www.justice.gov/opa/pr/credit-suisse-s-investment-bank-hong-kong-agrees-pay-47-million-criminal-penalty-corrupt

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Friday, July 6, 2018

North American Power Group Ltd and its Owner Agree to Pay $14.4 Million to Resolve Alleged False Claims for Department of Energy Cooperative Agreement Funds

North American Power Group Ltd. (NAPG) and its owner and president, Michael Ruffatto, have agreed to pay the United States $14.4 million to resolve allegations that they violated the False Claims Act by submitting fraudulent claims under a cooperative agreement with the Department of Energy (DOE) National Energy and Technology Laboratory (NETL), located in Pittsburgh, Pennsylvania, the Department of Justice announced today.

https://www.justice.gov/opa/pr/north-american-power-group-ltd-and-its-owner-agree-pay-144-million-resolve-alleged-false

Court Imposes Maximum Fine on Sinovel Wind Group for Theft of Trade Secrets

A manufacturer and exporter of wind turbines based in the People’s Republic of China was sentenced today for stealing trade secrets from AMSC, a U.S.-based company formerly known as American Superconductor Inc., announced Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and U.S. Attorney Scott C. Blader for the Western District of Wisconsin.

The Court found that AMSC’s losses from the theft exceeded $550 million, and imposed the maximum statutory fine in the amount of $1.5 million on Sinovel Wind Group LLC. The Court found that the parties settled the restitution amount, and imposed a year of probation until Sinovel pays the full restitution amount. Sinovel has paid $32.5 million to AMSC this week and will pay $25 million within its year of probation. Sinovel will also pay $850,000 to additional victims within its year of probation. Sinovel was convicted of conspiracy to commit trade secret theft, theft of trade secrets, and wire fraud on Jan. 24 following an 11-day jury trial in Madison, Wisconsin.

“Rather than pay AMSC for more than $800 million in products and services it had agreed to purchase, Sinovel instead hatched a scheme to brazenly steal AMSC’s proprietary wind turbine technology, causing the loss of almost 700 jobs and more than $1 billion in shareholder equity at AMSC,” said Acting Assistant Attorney General Cronan. “As demonstrated by this prosecution, intellectual property theft poses a serious threat to American companies, and the Department of Justice is committed to aggressively investigating and prosecuting individuals and corporations who undermine American competitiveness by stealing what they did not themselves create.”

“This case is about protecting American ideas and ingenuity,” said U.S. Attorney Blader. “My office is committed to prosecuting the theft of intellectual property to ensure an open and fair marketplace. The devastation Sinovel’s illegal actions caused to AMSC and its employees will not be tolerated.”

https://www.justice.gov/opa/pr/court-imposes-maximum-fine-sinovel-wind-group-theft-trade-secrets

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Friday, July 6, 2018

Texas Construction Company’s Owner and CEO Sentenced to Prison for Defrauding the State Department

The owner, chief executive officer, and former president of a Texas construction company, HERC Solutions, was sentenced to 18 months in prison today for defrauding the U.S. Department of State out of $1.37 million. Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney G. Zachary Terwilliger of the Eastern District of Virginia, Inspector General Steve A. Linick of the U.S. Department of State and Assistant Director in Charge Nancy McNamara of the FBI’s Washington Field Office made the announcement.

Gary A. Duff, 53, of Kansas City, Kansas, was sentenced by U.S. District Judge Liam O’Grady of the Eastern District of Virginia. On Feb. 12, Duff pleaded guilty to a one-count criminal information charging him with conspiracy to defraud the United States and commit wire fraud.

According to admissions made in connection with Duff’s plea, HERC specialized in international construction projects for the State Department and other agencies in military zones and developing countries. Duff’s co-conspirator, Steven J. Graves, 66, of Woodbridge, Virginia, was a contract specialist and senior contracts administrator for the State Department’s Office of Acquisitions Management from November 2011 to February 2013. In this capacity, Graves often served as a point of contact for contracts awarded to HERC and other companies seeking to perform construction work or provide supplies and materials to U.S. embassies and consular buildings.

Duff and Graves used Graves’ official positions to steer contracts to HERC during a time-period when Graves was an actual or de facto partner in HERC. Graves served as the assigned point of contact for State Department contracts awarded to HERC while Graves was simultaneously attempting to generate business and raise capital for HERC, was concealing his conflict of interest from others, was participating in HERC’s internal business operations, and was disclosing confidential procurement information to HERC and its business partners. Upon his departure from government service, Graves immediately became HERC’s majority owner and a company executive.

On Sept. 20, 2017, Graves pleaded guilty to a two-count criminal information charging him with conspiracy to defraud the United States and commit wire fraud and a willful violation of the conflict of interest statute. Graves was sentenced to serve 15 months in prison by District Judge O’Grady on Jan. 19.

Special agents with the Department of State’s Office of Inspector General and the FBI’s Washington Field Office investigated the case. Trial Attorney Edward P. Sullivan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Jack Hanly of the Eastern District of Virginia are prosecuting the case

AN ASIDE HERE: I NOTICED THAT MOST ALL PRESS RELEASES COMING OUT OF THE DOJ.GOV SITE HAVE BEEN PROMINENTLY FROM ASST ATTY

JOHN P CRONIN (J C) W/MI OF P

DID WE GET CONFIRMATION THAT CARLIN IS OTHER JC? JUST A THOUGHT. THEN AGAIN I FIRST THOUGHT THAT THE OTHER JC BESIDES CCOMEY WAS CLAPPER. HAHA