Brazilian Airline to Pay Over $41 Million to Settle FCPA, Foreign Bribery Investigations
Brazilian airline GOL Linhas Aereas Inteligentes will pay over $41 million to settle criminal and civil investigations by DOJ, SEC and Brazilian authorities on bribery charges, DOJ announced in a Sept. 15 news release. DOJ and the airline entered into a three-year deferred prosecution agreement over charges that the company violated the Foreign Corrupt Practices Act; the airline agreed to pay a criminal penalty of $17 million.
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DOJ said it would credit up to $1.7 million of the penalty against a fine of around $3.4 million the airline agreed to pay to Brazilian authorities related to a similar proceeding carried out by the Controladoria-Geral da Uniao and the Advocacia-Geral de Uniao in Brazil. GOL will pay around $24.5 million over two years to settle the SEC's parallel investigation, the release said. The airline originally agreed to pay $70 million to settle the SEC charges, though the regulator waived all but $24.5 million of the fine, the SEC said.
From 2012 to 2013, GOL conspired to pay approximately $3.8 million in bribes to Brazilian officials to "secure the passage of two pieces of legislation favorable to GOL," DOJ said. The legislation concerned various payroll tax and fuel tax reductions that benefited GOL and other airlines in Brazil. To carry out the bribery scheme, a GOL board member entered the company into fake contracts with companies connected to Brazilian officials.
As part of the DPA signed to settle the investigations, GOL agreed to cooperate further with DOJ in any future or ongoing criminal investigations relating to the conduct and continue enhancing its compliance program. The company will provide reports on remediation and the implementation of compliance measures for the length of the DPA, DOJ said. The agency said GOL got "full credit" for cooperating with authorities when DOJ was determining the company's fines.
“GOL paid millions of dollars in bribes to foreign officials in Brazil in exchange for the passage of legislation that was beneficial to the airline,” Assistant Attorney General Kenneth Polite said. “The company entered into fraudulent contracts with third-party vendors for the purpose of generating and concealing the funds necessary to perpetrate this criminal conduct, and then falsely recorded the sham payments in their own books. Today’s resolution demonstrates the Department of Justice’s commitment to holding accountable companies that corrupt the functions of government for their own financial gain.”