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Embraer Acknowledges and Settles Bribery Claims

A Brazilian aerospace company, Embraer SA ("Embraer" or the "Company"), has agreed to pay $205 million to settle bribery claims involving the governments of the Dominican Republic, Saudi Arabia and Mozambique that were brought forth by U.S. authorities. The lawsuit also alleged that the Company made illegal payments to the Indian military. The U.S. Department of Justice will receive $107 million, $98 million to the U.S. Securities and Exchange Commission ("SEC"), and $20 million will go to the Brazilian authorities, all as disgorgement of Embraer's illegal profits. The Company also agreed to improve its compliance function, as well as allowing itself to be monitored for a three-year period as part of a deferred prosecution agreement. Although Embraer received credit for its cooperation with the government, the Company could have paid even less if had it adequately punished an executive who allegedly knew and took part in the Company's illegal actions.

The SEC claimed Embraer tied illegal payments to contracts that spanned four continents over the course of six years, which altogether provided the Company with $83 million of net profit. Allegedly, the Company (a) paid $3.52 million to an air force colonel in the Dominican Republic in exchange for a $96.4 million contract, (b) paid an individual in Saudi Arabia $1.65 million to secure a $93 million sale, and (c) paid an airline executive at Linhas Aéreas de Moçambique SA $800,000 for a $65 million contract. According to the allegations, the Company used accounts in other countries to hide the transactions from authorities. Additionally, there were alleged payments to India's Air Force affiliates in the U.K., Switzerland, and Singapore that helped Embraer sign a $208 million contract with the Indian Air Force, which is illegal under Indian law.

Shortly after the SEC investigation began, Embraer conducted an internal investigation and confirmed the alleged conduct. The Company apologized for its conduct. Currently, the U.S. is helping authorities in Saudi Arabia and Brazil litigate against individuals who were involved in these illegal activities.

The legal team at SFMS has significant experience litigating securities and international matters. If you have any questions regarding this subject or this posting, please contact Nick Lussier (nlussier@sfmslaw.com) or Chiharu Sekino (csekino@sfmslaw.com). We can also be reached toll-free at (866) 540-5505.

Shepherd, Finkelman, Miller & Shah, LLP is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, Pennsylvania and Wisconsin. SFMS is an active member of Integrated Advisory Group (www.iaginternational.org), which provides us with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about our firm, please visit us at www.sfmslaw.com.

Source: Godoy, Jeff. "Brazil's Embraer To Pay US Feds $205M To End Bribery Claims." Law360. Portfolio Media Inc. 24 Oct. 2016. Web. 22 Nov. 2016.

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