Former Embraer Executive Jets salesman admits bribery charges

Elizabeth Eyre
By Elizabeth Eyre January 12, 2018 13:10

Former Embraer Executive Jets salesman admits bribery charges

Former Embraer Executive Jets VP of sales and marketing Colin Steven has admitted bribing a Saudi Arabian official to win a $93 million contract.

He has also admitted receiving a kickback as part of the deal, for three new Embraer business jets, laundering the proceeds of the deal through a company owned by friends, and lying to US law enforcement officers about the kickback.

Sixty-one-year-old Steven pleaded guilty to a number of charges at a New York court just before Christmas. They are one count of violating the Foreign Corrupt Practices Act (FCPA), one count of conspiracy to violate the FCPA, one count of wire fraud, one count of conspiracy to commit wire fraud, one count of money laundering, one count of conspiracy to launder money, and one count of making a false statement.

A date has not been set for sentencing Steven, a UK national who lives in Dubai, but he is due to appear at the Southern District of New York court again on 21st June.

His guilty plea follows the execution last October of a deferred prosecution agreement between the US Department of Justice and Embraer, under which the Brazilian aircraft manufacturer agreed to pay $107 million to the DoJ to resolve investigations by the DoJ, the Securities and Exchange Commission, and Brazilian authorities into corrupt conduct in several countries, including Saudi Arabia.

According to court documents about the case, in 2009 Embraer was negotiating with Saudi Arabia’s national oil company over a potential sale of used aircraft, when Steven and the “high-level foreign government official” arranged that the official would guarantee that Embraer would win the contract – and that it would be for new aircraft – in return for a bribe of about $1.5 million.

The oil company awarded Embraer a contract for three new aircraft, worth about $93 million, early in 2010.

Steven arranged to disguise the bribe as commissions to a South African industrial valve and pump manufacturer that was partly owned by some friends. The company transferred most of the bribe money to a representative of the foreign official, but Steven kept almost $130,000 for himself.

Four years later, when Steven was being interviewed by the FBI, he claimed that an executive at the South African company had transferred the money to him so that he could buy real estate as part of a potential business venture between the two.

Steven is not the only person to be charged as a result of the investigation, carried out by FBI international corruption squads in Miami and Los Angeles – 11 people have been charged by Brazilian authorities for alleged involvement in misconduct by Embraer in the Dominican Republic, and two people have been charged by Saudi Arabian authorities in connection with Embraer’s activities in Saudi Arabia.

In a statement released when Steven pleaded guilty to the charges, Embraer said: “In October 2016, Embraer announced that it had reached settlements with the US and Brazilian authorities with respect to an investigation that found irregular transactions occurred in four different countries in the past decade.

“In parallel, the US Department of Justice has been conducting investigations with regard to certain individuals. Embraer is not a part, nor has it been informed, of the development of these investigations.

“From the beginning, Embraer treated the matter seriously and fully cooperated with the investigation. As events unfolded, the company voluntarily expanded its scope and shared the results with the relevant authorities.”

 

Elizabeth Eyre
By Elizabeth Eyre January 12, 2018 13:10

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