Compliance News

US Lufthansa Subsidiary Bizjet Involved In Bribery

Execs Sentenced Under FCAP

April 8, 2013
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Sentences were handed down Friday, April l 5, against former executives of BizJet International Sales and Support Inc., for their alleged participation in a scheme to pay bribes to government officials in Latin America. BizJet is the U.S.-based subsidiary of Lufthansa Technik AG, and provides aircraft maintenance, repair and overhaul (MRO) services.  

“The charges allege a conspiracy by senior executives at BizJet to win contracts in Latin American countries through bribery and illegal tactics,” says Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division. “Four former BizJet executives, including the former president and chief executive officer, allegedly authorized and caused hundreds of thousands of dollars to be paid directly and indirectly to ranking military officials in various foreign countries, and two former executives have pleaded guilty for their roles in the conspiracy.  These charges reflect our continued commitment to holding individuals accountable for violations of the FCPA, including, as in this instance, after entering into a deferred prosecution agreement with their employer.”

The charges allege that the defendants, in many instances, paid bribes directly to foreign officials in Mexico, Panama and Brazil for assistance in securing contracts. The entities included the Mexican Policia Federal Preventiva, the Mexican Coordinacion General de Transportes Aereos Presidenciales, the air fleet for the Gobierno del Estado de Sinaloa in Mexico, the air fleet for the Estado De Roraima in Brazil, and the Republica de Panama Autoridad Aeronautica Civil.

The defendants also allegedly funneled bribes through a shell company owned and operated by Jald Jensen, BizJet’s former sales manager.  The shell company, Avionica International & Associates Inc., allegedly operated under the pretense of providing aircraft maintenance brokerage services. It reality, it laundered money related to BizJet’s bribery scheme. Avionica was located at Jensen’s home in Van Nuys, California. Jensen was the only officer, director and employee.

The charges follow the March 14, 2012 announcement of a deferred prosecution agreement with BizJet and an $11.8 million penalty to resolve charges related to the corrupt conduct.  That agreement acknowledged BizJet’s voluntary disclosure, extraordinary cooperation and extensive remediation in this case. Since then, Bernd Kowalewski, the former president and chief executive officer, and Jald Jensen, the former sales manager, each fled the country.

The remaining two conspirators, Peter DuBois, the former vice president of sales and marketing, and Neal Uhl, the former vice president of finance, are each serving reduced sentences that consist of probation and eight months’ home detention, based upon their cooperation with the investigation.

Valerie Parlave, FBI assistant director in charge, adds, “Business executives have a responsibility to act appropriately in order to maintain a fair and competitive international market. The unsealing of these bribery charges, and (Friday’s) sentencing, demonstrate that the FBI is committed to curbing corruption and will pursue all those who try to advance their businesses through bribery.”

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