I once read a quote that said, “You don’t necessarily need atomic bombs to destroy a nation. Politicians who value their pockets than the life of citizens always do that every day.” Despite years of reform and high profile criminal prosecutions, there is still much truth in that quote.
Whether or not political and social mores are changing, the U.S. Department of Justice and SEC continues their dogged pursuit of those companies that bribe public officials. The latest notch in DOJ’s belt comes from the prosecution of three Texans and three Mexican nationals. All are tied to a company called Hunt Pan Am Aviation.
The first to plead guilty in the scheme were Kamta Ramnarine and Daniel Perez. They pleaded guilty earlier this year but the case was sealed until now. Both men were owners in Hunt Pan Am. Ramnarine also served as the company’s general manager.
Prosecutors say the two men conspired to bribe Mexican officials. The men hoped the bribes would lead to aircraft maintenance and parts contracts with Mexican state governments. (The men’s company owns an aircraft maintenance facility in Brownsville, Texas.)
Also convicted was Douglas Ray of Magnolia, Texas. He facilitated the bribery by wiring almost $200,000 to the Texas bank accounts of several Mexican officials. The bank accounts were located in the U.S. A fourth man from Mexico was convicted of conspiracy to violate the Foreign Corrupt Practices Act.
In a separate proceeding, two former Mexican officials also pleaded guilty to conspiracy to commit money laundering.
All six men face maximum penalties ranging between 5 and 20 years. One of the two foreign officials, Ramiro Ascencio Nevarez, was already sentenced. He is serving 15 months in a U.S. prison.
According to a criminal complaint filed in McAllen, Texas, Nevarez worked for a public university in Mexico. For several years he was in charge of maintaining the university’s aircraft. In exchange for bribes, Nevarez steered maintenance work to Hunt Pan Am Aviation.
To conceal the bribery, Nevarez conspired with Ramnarine and others to create “fake commission agreements.”
Foreign Corrupt Practices Act (FCPA)
Bribery of foreign officials is a felony under the Foreign Corrupt Practices Act (FCPA). The U.S. law is quite expansive in that it covers the maker of the bribe as well as the receiving it. Soliciting or offering a bribe is also a crime.
The total amount of the bribes in this case were just about $2 million. In recent weeks, the Justice Department has announced much bigger prosecutions. Companies like drug maker Teva who paid over $500 million in fines.
So why is this case noteworthy?
The Hunt Pan Am Aviation is an example of the common kind of bribery cases that occur every day around the world. In some cultures, bribery is a way of life and American businesses that want to get ahead think they have to “pay to play.”
Unfortunately, if everyone felt that way, everyone would be demanding a bribe and the economy would collapse. When one company like Hunt Pan Am pays a bribe, honest companies lose out. If left unchecked, that encourages even more people to commit these crimes.
Foreign Bribery Whistleblower Awards
This case was prosecuted criminally. Already both government officials lost their jobs and one was sentenced to over a year in prison. Sometimes SEC takes the lead on these cases and puts its effort inn collecting fines. Like the Teva case which resulted in a 500+ million fine.
A provision of the FCPA allows whistleblowers with inside information or evidence of these schemes to collect an award. Those awards are frequently in the millions of dollars and can be up to 30% of whatever is collected from the wrongdoer.
By offering awards, suddenly the incentive is to turn corrupt officials and those that pay them.
An added benefit of the FCPA program is the confidentiality offered by the SEC. While no agency can offer a 100% guaranty of confidentiality, the SEC has a great track record. The agency also has robust anti-retaliation rules.
Collecting Your Own Whistleblower Award
Anyone with inside information about bribery of foreign officials may be eligible for an award. Not all businesses are subject to the US Foreign Corrupt Practices Act. But simply because the bribery takes place outside the United States or involves foreign countries doesn’t make the illegal conduct beyond the SEC’s reach.
To find out if you may be entitled to an award, call us. There is no obligation, the inquiry is confidential and you never have to pay us anything unless we collect money on your behalf.
For more information, visit our FCPA foreign bribery information page or contact us directly. The author of this post, attorney Brian Mahany, can be reached at or by phone at (direct).
MahanyLaw – America’s FCPA Whistleblower Lawyers