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Five Charged With FCPA Violations Involving Titanium Mining Rights in India

April 30, 2014 — The U.S. Foreign Corrupt Practices Act (FCPA) makes it a crime for companies to win contracts or licenses abroad by paying bribes to government officials. Such bribery schemes only serve to create an imbalance in the marketplace and to prejudice honest competitors. To redress the problem, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 created a whistleblower program that provides significant rewards to conscientious informants who notify the government about FCPA violations.

Six Charged in Alleged Conspiracy to Pay Bribes to Government Officials in India in Return for Valuable Licenses to Mine Titanium

In a recently unsealed federal indictment, six foreign nationals have been charged in an alleged scheme to bribe government officials in India in exchange for the rights to mine titanium minerals there. Five of the six individuals were charged with FCPA violations, including: Dmitry Firtash and Suren Gevorgyan, Ukrainian nationals; Andras Knopp, a Hungarian businessman; Periyasamy Sunderalingam, of Sri Lanka; and Gajendra Lal, an Indian national who used to live in North Carolina and is a permanent resident of the United States.
In 2006, these five individuals allegedly concocted a scheme to pay bribes to K.V.P. Ramachandra Rao, an Indian Member of Parliament who was also an official of the state government of Andhra Pradesh and a trusted advisor to that state’s former chief minister, Y.S. Rajasekhara Reddy, and other Indian officials. Rao, the U.S. Justice Department reports, is also a defendant named in the unsealed indictment.
The elaborate scheme involved planned bribery payments of $18.5 million in exchange for mining licenses in Andhra Pradesh. The alleged conspirators sought to gain over $500 million a year from the sale of titanium to an unnamed Chicago company, as well as others.
The defendants allegedly transferred millions of dollars through U.S. financial institutions for the purpose of paying off the necessary Indian public officials. To hide the scheme, it was made to appear that the money was transferred for legitimate business operations. In addition to the money, the defendants allegedly used intimidation and threats in their efforts to obtain the desired mining licenses.
Firtash was the alleged ringleader of the foreign bribery operation and met with Reddy and other Indian government officials. Knopp allegedly supervised the operation, meeting with officials in India about the mining licenses and with representatives from the Chicago Company A about supplying the titanium from India. Gevorgyan allegedly monitored the bribe payments and signed false documents needed to carry out the scheme. Lal allegedly made recommendations about whether and how to make the actual bribery payments. Sunderalingam allegedly met with Rao to decide how big the bribes should be. And Rao allegedly requested to be paid in exchange for approving the licenses and alerted the other defendants when it appeared that law enforcement might investigate the enterprise.

Informants Tip Off Government to FCPA Violations

At Waters & Kraus, our qui tam lawyers are devoted to representing whistleblowers who have the courage to collaborate with the government. We recognize that it isn’t always easy to notify the government about an employer’s foreign bribery activities. Contact us by email or phone our FCPA attorneys at 855.784.0268 to discuss how we can collaborate to fight illegal foreign bribery.

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