Criminal Fraud Cases
In re. Albemarle Corp.
United States v. Orlando Alfonso Contreras Saab
United States v. Corporacion Financiera Colombiana SA
United States v. Amadou Kane Diallo
A California businessman was charged for allegedly soliciting investments under false pretenses and using investors’ funds to support his own lavish lifestyle. He was charged with 19 counts of wire fraud and two counts of money laundering.
United States v. IRB Brasil Resseguros SA
On April 24, 2023, the Department of Justice, Criminal Division, Fraud Section announced a corporate resolution with IRB, which will consist of an NPA with self-reporting and $45 million in victim compensation. The CFO of Brazilian reinsurance company IRB, together with other IRB employees, enacted a scheme to mislead investors about Berkshire Hathaway’s purported investments in IRB. When the scheme was revealed, IRB’s stock price dropped by approximately 30% and caused tens of millions in shareholder losses.
Monetary Amounts and Key Terms:
- Non-Prosecution Agreement – enhanced compliance self-reporting
- $0 – Fine
- No fine based upon inability to pay ($45,000,000 otherwise)
- $5,000,000 – Victim Compensation Payment
- On April 24, 2023, the Department of Justice, Criminal Division, Fraud Section announced a corporate resolution with IRB, which will consist of an NPA with self-reporting and $45 million in victim compensation. The CFO of Brazilian reinsurance company IRB, together with other IRB employees, enacted a scheme to mislead investors about Berkshire Hathaway’s purported investments in IRB. When the scheme was revealed, IRB’s stock price dropped by approximately 30% and caused tens of millions in shareholder losses.
- Monetary Amounts and Key Terms:
- Non-Prosecution Agreement – enhanced compliance self-reporting
- $0 – Fine
- No fine based upon inability to pay ($45,000,000 otherwise)
- $5,000,000 – Victim Compensation Payment
- Amount reduced based upon inability to pay ($45,000,000 otherwise)
- $0 – Fine
- Global Resolution?: No
- Total Global Monetary Amounts: $5,000,000 (DOJ MIMF)
- Total U.S. Monetary Amounts: $5,000,000
- U.S. Criminal Monetary Amounts: $5,000,000
- Non-Prosecution Agreement – enhanced compliance self-reporting
- Monetary Amounts and Key Terms:
- Amount reduced based upon inability to pay ($45,000,000 otherwise)
- On April 24, 2023, the Department of Justice, Criminal Division, Fraud Section announced a corporate resolution with IRB, which will consist of an NPA with self-reporting and $45 million in victim compensation. The CFO of Brazilian reinsurance company IRB, together with other IRB employees, enacted a scheme to mislead investors about Berkshire Hathaway’s purported investments in IRB. When the scheme was revealed, IRB’s stock price dropped by approximately 30% and caused tens of millions in shareholder losses.
- $0 – Fine
- Global Resolution?: No
- Total Global Monetary Amounts: $5,000,000 (DOJ MIMF)
- Total U.S. Monetary Amounts: $5,000,000
- U.S. Criminal Monetary Amounts: $5,000,000
United States v. Rishi Shah et al.
Following an 11-week trial, the former CEO, President, and CFO/COO of Outcome Health, a Chicago-based advertising company, were convicted of mail, wire, and bank fraud in connection with a $1 billion corporate fraud scheme targeting the company's clients, lenders, and investors.
United States v. Craig Perciavalle et al.
Craig Perciavalle, Joseph Runkel, and Wiliam Adams, all former executives and employees of Austal USA, a ship builder, were charged with conspiracy and wire fraud in connection with an accounting fraud scheme that falsely overstated the revenue that Austal was earning from ships it was buidling for the U.S. Navy.
United States v. Telefonaktiebolaget LM Ericsson
- In 2019, the defendant (Ericsson) entered into a deferred prosecution agreement (DPA) for using third-party agents and consultants to make bribe payments to government officials and to manage off-the-books slush funds in Djibouti, China, Vietnam, Indonesia, and Kuwait, in violation of the Foreign Corrupt Practices Act (FCPA).
- Following the 2019 resolution, Ericsson breached the DPA by failing to truthfully disclose all factual information and evidence related to the Djibouti scheme, the China scheme, and other potential violations of the FCPA’s anti-bribery or accounting provisions. Ericsson also failed to promptly report and disclose evidence and allegations of conduct related to its business activities in Iraq that may constitute a violation of the FCPA.
- In 2023, Ericsson agreed to plead guilty to the original charges deferred by the 2019 DPA: one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of conspiracy to violate the internal controls and books and records provisions of the FCPA. Ericsson was required to serve a term of probation through June 2024 and agreed to a one-year extension of the independent compliance monitor. The plea agreement also required Ericsson to pay an additional criminal penalty of $206,728,848 – which includes the elimination of any cooperation credit originally awarded pursuant to the DPA.
United States v. Sterling Bancorp, Inc.
On March 15, 2023, the Department of Justice, Criminal Division, Fraud Section signed and announced a guilty plea with Defendant Sterling Bancorp, Inc. for securities fraud. In connection with its October 2017 IPO, Sterling Bancorp, Inc.—a Detroit-based community bank with branches throughout the United States—issued a false and misleading public offering statement (SEC Form S-1) regarding its marquee lending program, the “Advantage Loan Program.” Although the bank touted this loan program, which in turn was a significant driver of the bank’s increased and sustained revenue, a major number of the loans issued through the ALP were the product of fraudulent documentation. Bank insiders (including its founder, Scott Seligman), made approximately $100 million in stock gains in connection with the IPO. The false statements were reiterated in the bank’s subsequent annual filings in 2018 and 2019 (SEC Form 10-K). In 2020, the fraud came to light through a bank examination, and the stock price dropped, causing shareholders approximately $69 million in losses.
Monetary Amounts and Key Terms:
- Guilty Plea – enhanced compliance self-reporting
- $0 – Fine
- No fine based upon inability to pay ($62,100,000 otherwise)
- $27,200,000 – Restitution
- Amount reduced based upon inability to pay ($56,600,000 otherwise)
- $0 – Fine
- Global Resolution?: No
- Total Global Monetary Amounts: $27,200,000 (DOJ MIMF)
- Total U.S. Monetary Amounts: $27,200,000
- U.S. Criminal Monetary Amounts: $27,200,000
Corsa Coal Corporation
Pursuant to the Criminal Division’s Voluntary Self-Disclosure and Corporate Enforcement Policy, on March 8, 2023, the Fraud Section and the U.S. Attorney’s Office for the Western District of Pennsylvania declined to prosecute Corsa Coal Corporation for violations of the Foreign Corrupt Practices Act (FCPA) because the company voluntarily self-disclosed the misconduct, cooperated with the government’s investigation, and timely and appropriately remediated.
As part of the agreement the company agreed to disgorge its profits earned from the illicit scheme, as modified by its ability to pay.
From approximately late 2016 until early 2020, certain of Corsa’s employees and agents engaged in a scheme to bribe Egyptian government officials in order to obtain and retain lucrative contracts to supply coal to Al Nasr Company for Coke and Chemicals, an Egyptian state-owned and -controlled coke company.
United States v. Terren S. Peizer
Terren Peizer, the CEO and Chairman of Ontrak Inc., a publicly traded health care company, was charged with securities fraud for an insider trading scheme that sought to exploit the shield provided by 10b5-1 trading plans. By entering into 10b5-1 trading plans while in possession of material non-public information, Peizer is alleged to have avoided more than $12.5 million in losses.
United States v. Greg E. Lindberg
Greg Lindberg, the owner or controller of multiple insurance companies, was charged with conspiracy, fraud, and false statements in connection with a $2 billion scheme to defraud mutiple insurance companies and their policyholders, and to deceive the North Carolina Department of Insurance, by misrepresenting the financial condition of Lindberg's companies and his use of company funds.