US authorities have charged five people, including three ex-Rolls-Royce employees, for their alleged role in a scheme to pay bribes to foreign government officials.
Four of the five men have pleaded guilty, while the fifth is believed to be outside the US.
According to the indictment, the five men allegedly conspired to pay bribes to foreign officials in exchange for directing business to a US-based subsidiary of Rolls-Royce, Rolls-Royce Energy Systems. Included in this scheme were contracts to supply equipment and services to power a gas pipeline from central Asia to China.
Kenneth Blanco, acting assistant attorney general of the US Department of Justice’s (DoJ) Criminal Division, said: “The charges announced today against executives, employees, and third parties affiliated with Rolls-Royce, are another example of the Criminal Division’s commitment to holding individuals, and not just corporations, accountable for violating the FCPA [Foreign Corrupt Practices Act].”
Under FCPA the US can charge any business or person operating in the US for corrupt practices they commit anywhere in the world.
A spokesman from Rolls-Royce said: “Rolls-Royce has committed to full ongoing co-operation with the Department of Justice and cannot comment on action against individuals.”
Rolls-Royce sold its energy business in 2014.
The charges follow an earlier £671m deferred prosecution agreement settlement Rolls-Royce agreed to pay to resolve an investigation by the UK Serious Fraud Office (SFO) into corrupt conduct.
These latest charges are part of a joint investigation between US authorities and SFO and were unsealed yesterday, meaning the DoJ had already issued them in secret and have only now made them public.
James Finley, 66, former vice president and global head of sales of Rolls Royce’s Energy Division; Keith Barnett, 48, former regional director of Rolls Royce’s Energy Division; Louis Zuurhout, 53, former sales manager of Rolls Royce’s Energy Division; and Andreas Kohler, 53, former director of the consulting firm Technical Advisor, which worked for a former Rolls Royce customer in Kazakhstan, all pleaded guilty to corruption related charges.
Petros Contoguris, 70, a Greek citizen residing in Turkey who acted as an intermediary of Rolls-Royce in Kazakhstan, has also been charged.
The DoJ alleges that Contoguris, while working with employees of Technical Advisor, including Kohler, devised a kickback scheme with Rolls-Royce employees including Zuurhout, Barnett and Finley.
As part of the scheme, kickbacks to Technical Advisor employees and bribes to at least one foreign official were made by Rolls Royce in exchange for help in winning contracts with Asia Gas Pipeline LLP (AGP). The payments would be disguised as commission payments to Contoguris’s company Gravitas, the indictment alleged.
The indictment alleges after AGP awarded Rolls-Royce a contract in November 2009, worth around $145m, Rolls-Royce made commission payments to Gravitas, of which a portion were passed onto the Technical Advisor employees by Contoguris, knowing it would be shared with a foreign official as part of a corrupt agreement.
In their guilty plea, Finley, Barnett and Zuurhout, admitted to participating in a conspiracy to use commercial advisors to mask bribes as commission payments in a number of countries from around 1999 until 2013.
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