A former sales executive of Brazilian-based aircraft manufacturer Embraer pleaded guilty last week in connection with a scheme to pay bribes to a high-level foreign government official in exchange for assistance in securing Embraer’s sale of aircraft to Saudi Arabia’s national oil company.
Colin Steven, a U.K. citizen residing in the United Arab Emirates, was charged by information filed on Dec. 21 in the Southern District of New York with one count of violating the Foreign Corrupt Practices Act, one count of conspiracy to violate the FCPA, one count of wire fraud, one count of conspiracy to commit wire fraud, one count of money laundering, one count of conspiracy to launder money and one count of making a false statement. Steven pleaded guilty to all of those counts before U.S. District Judge Alison Nathan of the Southern District of New York. A sentencing date has not been scheduled yet.
As part of his plea, Steven, a former vice president of sales and marketing in Embraer’s Executive Jets Division, admitted that he engaged in a scheme to have Embraer pay bribes to a foreign official in exchange for assistance in getting an aircraft sales contract with favorable terms awarded to Embraer; retained a kickback as part of the scheme; and lied to law enforcement officials about his kickback.
Steven consented to the filing of the information, which alleged that Embraer was in negotiations with Saudi Arabia’s national oil company over a potential aircraft sale when Steven and the foreign official devised an arrangement whereby the foreign official would guarantee that Embraer would win a contract and that the contract would involve new rather than used aircraft in exchange for approximately $1.5 million in bribe payments.
In early 2010, Saudi Arabia’s national oil company awarded Embraer a contract for three new aircraft, valued at approximately $93 million. The information further alleged that he arranged to disguise the bribes as commissions to a South African company that was owned in part by Steven’s personal friends. The South African company transferred the bulk of the bribe proceeds to the foreign official’s intermediary but, at Steven’s direction, paid a portion of the bribe proceeds to Steven.
In pleading guilty, Steven admitted that he executed, and conspired with others to execute, the bribery and kickback schemes; laundered and conspired to launder the proceeds of those schemes through the South African company and lied to U.S. law enforcement about the kickback.
The guilty plea entered on Dec. 21 follows the execution in October 2016 of a deferred prosecution agreement between the Department of Justice and Embraer, under which Embraer agreed to pay a $107 million penalty to the Department as part of a $205 million global resolution to investigations by the Department, the Securities and Exchange Commission and Brazilian authorities related to corrupt conduct in several countries, including Saudi Arabia.
The agreement acknowledged Embraer’s cooperation with the investigations. With the cooperation of U.S. authorities, Brazilian authorities have charged 11 individuals for their alleged involvement in Embraer’s misconduct in the Dominican Republic. Saudi Arabian authorities have charged two individuals for their alleged involvement in Embraer’s misconduct in Saudi Arabia.