An airline with its headquarters in So Paulo, Brazil, GOL Linhas Aéreas Inteligentes S.A. (GOL), will pay more than $41 million to end concurrent bribery investigations by criminal and civil authorities in the US and Brazil.
According to court records, GOL and the Department of Justice entered into a three-year deferred prosecution agreement (DPA) in connection with a criminal information filed in the District of Maryland accusing the company of conspiring to break the Foreign Corrupt Practices Act’s anti-bribery and books-and-records provisions.
According to the DPA, GOL will forfeit $17 million as a criminal fine. In connection with related proceedings to resolve an investigation by the Controladoria-Geral da Unio (CGU) and the Advocacia-Geral de Unio (Attorney General’s Office), the department has agreed to credit up to $1.7 million of that criminal penalty against the roughly $3.4 million fine the company has agreed to pay to Brazilian authorities.
Additionally, as part of the conclusion of a separate investigation by the U.S. Securities and Exchange Commission, GOL will forfeit around $24.5 million over the course of two years.
The enactment of laws that benefited the airline was exchanged for millions of dollars in bribes given to foreign officials in Brazil, according to Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division.
“In order to obtain and hide the cash required to carry out this illegal activity, the corporation engaged into fake contracts with third-party suppliers. The company then incorrectly documented the fictitious payments in their own records.
The Department of Justice’s determination to hold corporations responsible for sabotaging government operations for their own financial advantage is shown by today’s resolution.
U.S. Attorney Erek Barron for the District of Maryland stated, “Our office’s close working relationship with the Department of Justice’s Fraud Section underscores our dedication to root out wrongdoing by firms that operate across Maryland.
“I am dedicated to making sure that any business operating in our District does it legally, morally, and without engaging in corrupt behavior.”
According to Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division, “Companies that bribe their way to riches will eventually pay the price for their crimes.”
“GOL bribed foreign officials to support its legislation and then attempted to pass off its bribery as genuine business dealings. The agreement reached today is evidence that the FBI and our law enforcement allies will fight corruption here and overseas.
Court records and the company’s confessions indicate that GOL colluded to propose and pay over $3.8 million in bribes to foreign officials in Brazil between 2012 and 2013. In order to ensure the adoption of two pieces of legislation that were beneficial to GOL, GOL specifically arranged for several bribe payments to be made to different authorities in Brazil.
The Act included several payroll tax and fuel tax exemptions that benefited GOL and other Brazilian airlines financially.
According to court records, a member of GOL’s board of directors forced GOL to enter into fictitious contracts with and make payments to many businesses related to the relevant Brazilian politicians in order to carry out the bribery plan.
The illicit payments were erroneously recorded in GOL’s books and records as legitimate expenditures, such as advertising and other service costs.
As a condition of the DPA, GOL agreed to keep assisting the department with any existing or future criminal investigations into this behavior.
Additionally, as part of the agreement, GOL consented to keep improving its compliance programme and reporting to the department on remediation and the application of compliance measures throughout the DPA’s duration.
Based on a variety of considerations, including, among others, the type, gravity, and pervasiveness of the infraction, the government and GOL came to this decision.
GOL was given full credit for its cooperation with the department’s investigation, which included, among other things, promptly providing the information gleaned from the internal investigation carried out by the business, which involved going over a large number of documents, speaking with witnesses, checking backgrounds, and testing more than 2000 transactions.
The business took immediate corrective action, overhauling its whole anti-corruption programme among other things. As a result, the felony sentence determined by the U.S. Sentencing Guidelines represents a decrease of 25% from the minimum fine range allowed under the guidelines.
However, GOL and the department agreed that the appropriate criminal penalty is $17 million in accordance with the department’s inability to pay advice because of GOL’s financial situation and proven inability to pay the penalty determined under the U.S. Sentencing Guidelines.
The matter is being looked into by the FBI’s Los Angeles Field Office. The case is being prosecuted by Assistant Chief Derek J. Ettinger, Trial Attorney Joseph McFarlane, and Assistant U.S. Attorney David I. Salem from the District of Maryland’s Fraud Section. Brazilian authorities as well as the Office of International Affairs of the Criminal Division assisted in this situation.
FCPA cases must be investigated and prosecuted by the Fraud Section. The Justice Department’s FCPA enforcement initiatives are described in more detail at www.justice.gov/criminal-fraud/foreign-corrupt-practices-act.