A federal indictment was unsealed today in the Southern District of New York charging a former employee of the Swedish multinational telecommunications company Telefonaktiebolaget LM Ericsson (“Ericsson” or “the Company”) for his alleged role in a scheme to pay approximately $2.1 million in bribes to high-level government officials in the Republic of Djibouti and conspiring to launder funds to promote the scheme. The defendant remains at large.

According to court documents, Afework “Affe” Bereket, 53, a dual citizen of Ethiopia and Sweden, allegedly engaged in the scheme between 2010 and January 2014. During that time, Bereket served as the account manager for the Horn of Africa, a region that included Djibouti, while on a long-term assignment for Ericsson in Africa. According to the indictment, Bereket participated in a scheme to bribe two high-ranking officials in Djibouti’s executive branch and a high-level executive at Djibouti’s state-owned telecommunications company to obtain a contract with the state-owned telecommunications company valued at approximately €20.3 million. To effectuate the bribery scheme, Bereket and others caused an Ericsson subsidiary to enter into a sham contract with a consulting company and approve fake invoices to conceal the bribe payments. Bereket and others also completed a draft due diligence report that failed to disclose the spousal relationship between the owner of the consulting company and one of the high-ranking government officials who was bribed. To promote the bribery scheme, Bereket caused Ericsson to transfer the funds to and through bank accounts in the United States.

On Dec. 6, 2019, Ericsson entered into a deferred prosecution agreement with the Department of Justice in connection with a criminal information filed in the U.S. District Court for the Southern District of New York charging the Company with conspiracies to violate the anti-bribery, books and records, and internal controls provisions of the Foreign Corrupt Practices Act (FCPA). An Ericsson subsidiary, Ericsson Egypt Ltd, pleaded guilty on the same day to a one-count criminal information charging it with conspiracy to violate the anti-bribery provisions of the FCPA. Pursuant to its agreement with the department, Ericsson paid a total penalty of over $520 million.

Bereket is charged with one count of conspiracy to violate the FCPA and one count of conspiracy to commit money laundering. If convicted of both counts, Bereket faces a maximum penalty of 25 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

“Bereket allegedly used the U.S. financial system to pay bribes to high-level government officials in Djibouti to ensure that Swedish telecom giant Ericsson won a multimillion-dollar government contract,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “Today’s unsealed charges demonstrate the department’s commitment to hold individuals accountable for violations of the FCPA and to ensure that business is won or lost on merit, not the amount of bribes a company’s employees and agents are willing to pay.”

“As alleged, Afework Bereket conspired in a corrupt scheme to pay millions of dollars in bribes to two Djibouti government officials and an official of a state-owned telecom company to win a contract for Ericsson valued at more than €20 million,” said U.S. Attorney Audrey Strauss for the Southern District of New York. “To disguise the scheme, Bereket allegedly engaged in financial sleight-of-hand involving a sham consulting contract, a false due-diligence report, and fake invoices.  The alleged criminal scheme has been exposed, and Affe Bereket is now charged in our district with serious federal crimes.”

“Our global economy should be one free from corrupt practices,” said Acting Special Agent in Charge Darrell J. Waldon of the IRS-Criminal Investigation’s (IRS-CI) Washington, D.C. Field Office. “The indictment unsealed today reflects the veracity in which IRS-CI will investigate those who engage in bribery to receive their business. Together with our partners at the Department of Justice, we will continue our efforts to ensure fair competition for companies around the world.”

Assistant Chief Andrew Gentin and Trial Attorneys Michael Culhane Harper and James Mandolfo of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys David Abramowicz and Juliana Murray of the U.S. Attorney’s Office for the Southern District of New York are prosecuting the case. The Justice Department’s Office of International Affairs provided investigative assistance.

The Fraud Section has lead responsibility for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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Author: Editor
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