Singapore-based Keppel Offshore & Marine and its wholly owned U.S. subsidiary will pay a combined $422 million criminal penalty to resolve charges with authorities in the United States, Brazil, and Singapore arising from a decade-long bribery scheme.
Acting Assistant Attorney General John Cronan of the Justice Department’s Criminal Division said the case “represents the first coordinated FCPA resolution with Singapore and the most recent of several coordinated resolutions with Brazil.”
Keppel Offshore & Marine USA (KOM USA) pleaded guilty on Dec. 22 in connected with the resolution. In addition, the Justice Department also unsealed charges against a former senior member of KOM’s legal department, who pleaded guilty to one count of conspiracy to violate the FCPA on Aug. 29, 2017 in the Eastern District of New York. He is awaiting sentencing.
According to admissions and court documents, beginning by at least 2001 and continuing until at least 2014, KOM conspired to violate the FCPA by paying approximately $55 million in bribes to officials at the Brazilian state-owned oil company Petrobras and to the then-governing political party in Brazil to win 13 contracts with Petrobras and another Brazilian entity.
KOM effectuated and concealed the bribe payments by paying outsized commissions to an intermediary, under the guise of legitimate consulting agreements, who then made payments for the benefit of the Brazilian officials and the Brazilian political party, the Justice Department stated.
Deferred prosecution agreement
KOM entered into a deferred prosecution agreement with the Justice Department relating to a criminal information filed in the Eastern District of New York charging the company with conspiracy to violate the anti-bribery provisions of the FCPA. The case is assigned to U.S. District Judge Kiyo Matsumoto.
In addition, KOM USA pleaded guilty and was sentenced by Judge Matsumoto on a one-count criminal information charging the company with conspiracy to violate the anti-bribery provisions of the FCPA.
Under its agreement with the Department of Justice, KOM will pay a total criminal fine of $422,216,980. Of that criminal penalty, $105.5 million will go to the United States, including a $4.7 million criminal fine paid by KOM USA. As part of the DPA, KOM also committed to implement rigorous internal controls and to cooperate fully with the Justice Department’s ongoing investigation.
In related proceedings, the company settled with the Ministério Público Federal (MPF) in Brazil and the Attorney General’s Chambers (AGC) in Singapore. The United States will credit the amount the company pays to Brazil and Singapore under their respective agreements, with Brazil receiving $211,108,490 (equal to 50 percent of the total criminal penalty), and Singapore receiving up to $105,554,245 (equal to 25 percent of the total criminal penalty).
In reaching the resolutions, the Department of Justice said that KOM and KOM USA received credit for their “substantial cooperation” with the Department’s investigation and for taking extensive remedial measures—such as terminating and otherwise disciplining employees involved in the criminal conduct and implementing an enhanced system of compliance and internal controls to address and mitigate corruption risks.
Accordingly, the criminal penalty reflects a 25 percent reduction off the bottom of the applicable U.S. Sentencing Guidelines fine range.