Foreign Corrupt Practices Act and Bribery Allegations Made Against BizJet
Last Friday, an Oklahoma federal district court unsealed charges against four former executives of a Tulsa-based aircraft maintenance and repair company. The charges all relate to alleged violations of the Foreign Corrupt Practices Act. The Department of Justice claims that the four executives conspired to pay bribes to government officials in a number of Central and South American countries in exchange for use of the company’s services.
According to the government, BizJet International Sales and Support Inc., a subsidiary of Lufthansa Technik AG, provides maintenance, repair, and overhaul (MRO) services for corporate aviation clients. From 2004 through 2010, at least four executives of the company conspired to obtain MRO service contracts from foreign government customers, including the Mexican Federal Police, the Mexican President’s Fleet, the Mexican state of Sinaloa, the Panama Aviation Authority, and the Brazilian state of Roraima, by paying bribes to foreign governmental officials. Over the course of the conspiracy, the four executives allegedly arranged for hundreds of thousands of dollars to be paid to military officials in Mexico, Panama, and Brazil. In March of 2012, BizJet entered into a deferred prosecution agreement under which it agreed to pay an $11.8 million penalty.
The four BizJet executives now under indictment are former president and chief executive officer Bernd Kowalewski, former sales manager Jald Jensen, former vice president of sales and marketing Peter DuBois, and former vice president of finance Neal Uhl. DuBois and Uhl entered guilty pleas in January admitting their roles in the conspiracy and their pleas were unsealed on Friday along with the indictments. For their cooperation in the government’s investigation, DuBois and Uhl received reductions in their sentencing guidelines ranges, with DuBois’ range lowered from 108 to 120 months imprisonment to only probation and eight months home detention, and Uhl’s range lowered from 60 months imprisonment to only probation and an similar period of home detention.
Kowalewski and Jensen are not yet in U.S. custody and are believed to remain abroad. Kowalewski and Jensen face charges of money laundering in addition to FCPA and conspiracy charges. The money laundering charges relate to allegations that the two executives funneled bribes to the foreign officials through a shell company that purported to provide aircraft maintenance brokerage services, but which actually existed only to launder the bribes paid to the foreign officials. If found guilty of FCPA violations, Kowalewski and Jensen face a maximum of sentence five years imprisonment and hundred of thousands of dollars in fines on each count. If convicted on money laundering conspiracy charges, they could face up to 10 or 20 years imprisonment and even larger criminal fines.
The Foreign Corrupt Practices Act forbids U.S. companies and their employees from engaging in federal government corruption and bribery of foreign officials. Additionally, it requires large U.S. companies doing business abroad to take active steps to ensure their employees do not violate the Act. Such steps include keeping detailed records and maintaining internal procedures and programs to prevent corruption. By complying with these requirements, companies can shield themselves from criminal liability even where their employees violate the law and are criminally prosecuted. Unfortunately, the leniency federal prosecutors show to companies that cooperate in investigations creates incentives for companies to help the government successfully prosecute their own employees.
Because potential sentences for FCPA violations—and other charges relating to public corruption such as mail or wire fraud, bribery of public officials, honest services fraud, racketeering, or money laundering—are very high, and because an employee’s own company will likely be willing to help the government, it is essential that anyone under investigation for public corruption violations immediately retain an experienced federal defense attorney. For twenty years, our federal defense attorneys have had great success in defending clients accused of a wide variety of federal public corruption offenses.
Page Pate is an accomplished trial lawyer with over 25 years of experience in criminal defense, civil litigation, and whistleblower representation. Page is listed in The Best Lawyers in America, Top 100 Lawyers by The National Trial Lawyers, and named to the list of Super Lawyers for the past 15 consecutive years. Page is a frequent expert legal analyst for local and national media and has served as an Adjunct Professor at the University of Georgia Law School. Read Page’s reviews on AVVO. Follow Page on Twitter @pagepate and on Linkedin.