New York – Keppel Offshore & Marine Ltd. (KOM), a Singapore-based company that operates shipyards and repairs and upgrades shipping vessels, and its wholly owned U.S. subsidiary, Keppel Offshore & Marine U.S.A. Inc. (KOM USA), have agreed to pay a combined total penalty of more than $422 million to resolve charges with authorities in the United States, Brazil and Singapore arising out of a decade-long scheme to pay millions of dollars in bribes to officials in Brazil. KOM USA pleaded guilty today in the Eastern District of New York in connection with the resolution. In addition, a guilty plea by a former senior member of KOM’s legal department was unsealed.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, John P. Cronan, Acting Assistant Attorney General of the Department of Justice’s Criminal Division, and Stephen E. Richardson, Assistant Director, Federal Bureau of Investigation, Criminal Investigative Division (FBI), made the announcement.
“The resolutions with KOM and its U.S. subsidiary are the result of a multinational effort to investigate and prosecute a corruption scheme that resulted in the payment by the defendant companies of over $50 million in bribes to Brazilian officials and in profits for the defendant companies of over $350 million from business corruptly obtained in Brazil,” said Acting U.S. Attorney Rohde. “In an attempt to conceal their crimes, the defendants used the global financial system – including the United States banking system – to disguise the source and disbursement of the bribe payments by passing funds through a series of shell companies. The United States, working with its law enforcement partners abroad, will continue to hold responsible those corporations and individuals who seek to enrich themselves through the corruption of government officials and legitimate governmental functions.”
“Today’s resolution once again underscores the importance of the Department of Justice’s collaboration with foreign authorities to hold corrupt companies and individuals accountable for their crimes, while ensuring the fair and appropriate allocation of fines and penalties,” said Acting Assistant Attorney General Cronan. “This case also represents the first coordinated FCPA resolution with Singapore and the most recent of several coordinated resolutions with Brazil. The Criminal Division is committed to working with our international partners to ensure that honest, law abiding companies are able to compete on a level playing field across the globe.”
“The resolution to this investigation shows to those around the world that the FBI and our law enforcement partners are dedicated to work together to bring justice to companies who play outside the rule of law,” said FBI Assistant Director Richardson. “The FBI won’t stand by while individuals operate their business illegally using bribes.”
The Bribery Scheme
According to admissions and court documents, beginning by at least 2001 and continuing until at least 2014, KOM conspired to violate the Foreign Corrupt Practices Act (“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, in order 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. KOM USA participated in this conspiracy from approximately 2007 to 2014.
The Corporate Resolutions
KOM entered into a deferred prosecution agreement with the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the U.S. District Court for the Eastern District of New York (the “United States”) in connection with a criminal Information filed today in the Eastern District of New York charging the company with conspiracy to violate the anti-bribery provisions of the FCPA. In addition, KOM USA pleaded guilty and was sentenced by the Honorable Kiyo A. Matsumoto on a one-count criminal Information charging the company with conspiracy to violate the anti-bribery provisions of the FCPA. Pursuant to its agreement with the United States, KOM will pay a total criminal fine of $422,216,980, with a criminal penalty due to the United States of $105,554,245, including a $4,725,000 criminal fine paid by KOM USA. As part of the deferred prosecution agreement, KOM also committed to implement rigorous internal controls and to cooperate fully with the United States’ 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 $105,554,245, equal to 25 percent of the total criminal penalty.
The press release is available at justice.gov.