Former Ericsson Employee Charged for Role in Foreign Bribery Scheme
A federal indictment was unsealed today in the Southern District of New York charging a former employee of the Swedish multinational telecommunications company Telefonaktiebolaget LM Ericsson (“Ericsson” or “the Company”) for his alleged role in a scheme to pay approximately $2.1 million in bribes to high-level government officials in the Republic of Djibouti and conspiring to launder funds to promote the scheme. The defendant remains at large.
According to court documents, Afework “Affe” Bereket, 53, a
dual citizen of Ethiopia and Sweden, allegedly engaged in the scheme between
2010 and January 2014. During that time, Bereket served as the account manager
for the Horn of Africa, a region that included Djibouti, while on a long-term
assignment for Ericsson in Africa. According to the indictment, Bereket
participated in a scheme to bribe two high-ranking officials in Djibouti’s
executive branch and a high-level executive at Djibouti’s state-owned telecommunications
company to obtain a contract with the state-owned telecommunications company
valued at approximately €20.3 million.
To effectuate the bribery scheme, Bereket and others caused
an Ericsson subsidiary to enter into a sham contract with a consulting company
and approve fake invoices to conceal the bribe payments. Bereket and others
also completed a draft due diligence report that failed to disclose the spousal
relationship between the owner of the consulting company and one of the
high-ranking government officials who was bribed. To promote the bribery
scheme, Bereket caused Ericsson to transfer the funds to and through bank
accounts in the United States.
On Dec. 6, 2019, Ericsson entered into a deferred
prosecution agreement with the Department of Justice in connection with a
criminal information filed in the U.S. District Court for the Southern District
of New York charging the Company with conspiracies to violate the anti-bribery,
books and records, and internal controls provisions of the Foreign Corrupt
Practices Act (FCPA). An Ericsson subsidiary, Ericsson Egypt Ltd, pleaded
guilty on the same day to a one-count criminal information charging it with
conspiracy to violate the anti-bribery provisions of the FCPA. Pursuant to its
agreement with the department, Ericsson paid a total penalty of over $520
million.
Bereket is charged with one count of conspiracy to violate
the FCPA and one count of conspiracy to commit money laundering. If convicted
of both counts, Bereket faces a maximum penalty of 25 years in prison. A
federal district court judge will determine any sentence after considering the
U.S. Sentencing Guidelines and other statutory factors.
“Bereket allegedly used the U.S. financial system to pay
bribes to high-level government officials in Djibouti to ensure that Swedish
telecom giant Ericsson won a multimillion-dollar government contract,” said
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s
Criminal Division. “Today’s unsealed charges demonstrate the department’s
commitment to hold individuals accountable for violations of the FCPA and to
ensure that business is won or lost on merit, not the amount of bribes a
company’s employees and agents are willing to pay.”
“As alleged, Afework Bereket conspired in a corrupt scheme
to pay millions of dollars in bribes to two Djibouti government officials and
an official of a state-owned telecom company to win a contract for Ericsson
valued at more than €20 million,” said U.S. Attorney Audrey Strauss for the
Southern District of New York. “To disguise the scheme, Bereket allegedly
engaged in financial sleight-of-hand involving a sham consulting contract, a
false due-diligence report, and fake invoices.
The alleged criminal scheme has been exposed, and Affe Bereket is now
charged in our district with serious federal crimes.”
“Our global economy should be one free from corrupt
practices,” said Acting Special Agent in Charge Darrell J. Waldon of the
IRS-Criminal Investigation’s (IRS-CI) Washington, D.C. Field Office. “The indictment
unsealed today reflects the veracity in which IRS-CI will investigate those who
engage in bribery to receive their business. Together with our partners at the
Department of Justice, we will continue our efforts to ensure fair competition
for companies around the world.”
Assistant Chief Andrew Gentin and Trial Attorneys Michael
Culhane Harper and James Mandolfo of the Criminal Division’s Fraud Section and
Assistant U.S. Attorneys David Abramowicz and Juliana Murray of the U.S.
Attorney’s Office for the Southern District of New York are prosecuting the
case. The Justice Department’s Office of International Affairs provided
investigative assistance.
Comments
Post a Comment