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Thursday, March 20, 2025

Wall Street banker arrested in Midtown rape case loses job offer from top firm

 


A Wall Street banker lost out on a job from a top insurer after he was slapped with criminal charges that he raped a 25-year-old woman in New York City last month,

Mark Harris, a 38-year-old infrastructure and energy finance specialist, was set to start a new job on April 7 with Global Atlantic Financial Group, which is owned by the private equity giant KKR, according to company insiders.

Harris signed the deal to join the firm on March 4, just two days before his arrest over the accusations  which he has vigorously denied, Global Atlantic sources said.

But the KKR-owned insurer and private credit provider axed the six-figure contract offer after The Post broke the news of the charges in Manhattan Criminal Court, according to Harris’s lawyer Jason Goldman.

“Mr. Harris has not been indicted on these outlandish and demonstrably false allegations,” Goldman said, noting that prosecutors haven’t yet laid out a case to a grand jury.

“It’s beyond unfortunate that someone of Mr. Harris’ character can even be arrested, subjected to recklessly sanctionable articles, and have his job rescinded based on a fictitious rape claim. We expect this matter to soon be dismissed,” the defense attorney added.

A spokesperson for Global Atlantic declined to comment.The Post first reported how prosecutors accused the ex-Investec financier of raping the woman at her Midtown Manhattan apartment while allegedly calling her a “f–king bitch” and telling her that she “had this coming.”

Harris allegedly pulled the victim’s pants down before he held her down against a mattress and raped her, according to New York prosecutors.

The woman then tried fighting off the alleged sexual predator by repeatedly pleading for him to stop before she was able to kick him off of her, according to a criminal complaint.

Harris, who denies the allegations, paid a $150,000 bail bond when he first appeared in court on March 6 on two charges of rape and one of sexual abuse.

He is due back in court on May 1 where the case is being brought by the New York County district attorney, legal filings show. The woman’s identity has not been revealed.

The banker left Investec in November last year, and his broker profile with US regulator FINRA shows he is no longer registered with any firm. A spokeswoman for his former employer declined to comment.


Former chief rabbi grilled over suspected blackmail case — reports

 


A former chief rabbi has been summoned for questioning by the police in a case surrounding blackmail suspicions in the state’s rabbinical court system, Hebrew media reports.

The move was approved by Attorney General Gali Baharav-Miara. The name of the former chief rabbi is gagged by court order.

He is questioned under caution, meaning he could face charges, in connection with suspicions that a rabbinical judge closely associated with the former chief rabbi blackmailed a subordinate to influence his rulings.

According to the Walla website, investigators from the police’s Lahav 433 major crimes unit raided the offices of the Grand Rabbinical Court this morning in search of emails and documents.

Turkey Arrests Istanbul Mayor, Erdogan’s Top Political Rival

 


ISTANBUL, - Thousands of Turks were expected to ramp up protests on Thursday over what they called the undemocratic detention of Istanbul's mayor Ekrem Imamoglu despite a ban on gatherings, police barricades and dozens of detentions over social media posts.

Imamoglu, President Tayyip Erdogan's main political rival, was taken in on Wednesday facing charges of graft and aiding a terrorist group, a move that the opposition condemned as a "coup attempt" and that sparked an initial round of demonstrations.

The move against the popular two-term mayor caps a months-long legal crackdown on opposition figures across the country which has been criticised as a politicised attempt to hurt their electoral prospects and silence dissent.

"We must stand against this evil as a nation," Imamoglu said on social media platform X, calling on members of the judiciary and Erdogan's ruling party to fight injustice.

"These events have gone beyond our parties, political ideals. The process is now concerning our people, namely your families. It is time to raise our voices," he said.

The government denies the accusations and has warned against tying Erdogan or politics to Imamoglu's arrest, after which it imposed a four-day ban on gatherings and restricted access to some social media to restrict communications.

Police on Thursday blocked off roads and stationed trucks with water cannons near the police station where the mayor is held and other areas of Turkey's largest city.

"They hastily detained our mayor, whom we elected with our votes," said Ali Izar, an opposition supporter on his way to work in central Istanbul. "I do not think this is a democratic practice and I condemn it."

Though civil disobedience has been dramatically curbed in Turkey since the nationwide Gezi Park protests against Erdogan's government in 2013, which prompted a violent state crackdown, thousands of protesters took to the streets and university campuses on Wednesday in Istanbul, Ankara and other cities.

Crowds had chanted anti-government slogans and, at the main municipality building in Istanbul, they hung banners of Imamoglu and the nation's founding leader Mustafa Kemal Ataturk alongside Turkish flags.

SOCIAL MEDIA CRACKDOWN

The detention of Imamoglu, 54, who leads Erdogan in some opinion polls, came days before his Republican People's Party (CHP) was set to elect him its next presidential candidate.

"The people will give their response again," said another Imamoglu supporter, Yusuf Demirci, 34, in Istanbul. "As you saw yesterday, everyone is on the streets and in the squares. The squares and the ballot box will be the result of this. I say, the righteous one will win."

The detention sparked a crash and partial recovery in the lira currency on Wednesday, which by Thursday was worth 38 to the dollar, compared to 36.67 beforehand. Amid worries about eroding rule of law and concerns over slower rate cuts, bank shares in particular tumbled on the Istanbul bourse.

Interior Minister Ali Yerlikaya said that 37 people had been detained and accused of "provocative social media posts inciting crime and hatred" after the detention, adding some 261 social media accounts, including 62 based abroad, were also identified.

Authorities also seized a construction company co-owned by Imamoglu - Imamoglu Construction, Trade and Industry - and handed control over to a court, according to the Istanbul Chief Public Prosecutor's office and financial crime investigation reports.

Istanbul municipality staff made up the bulk of the 105 people arrested along with Imamoglu.

Reporting by Ece Toksabay, Mert Ozkan, Mehmet Emin Caliskan and Ali Kucukgocmen; Additional reporting by Tuvan Gumrukcu and Huseyin Hayatsever in Ankara; Writing by Jonathan Spicer; Editing by Alex Richardson, Andrew Cawthorne, Alexandra Hudson

Tuesday, March 18, 2025

Alleged Russian Arms Seller’s Extradition Delayed

 


Thailand's Prime Minister Abhisit Vejjajiva has announced that the extradition of alleged Russian arms dealer Viktor Bout to face terrorism charges in the United States has been delayed.

The prime minister is quoted as saying said the delay is due to what he described as a continuing "legal process" in the case.

Reports say the delay apparently concerns extra charges of money-laundering and fraud submitted by U.S. prosecutors.

It was not immediately clear when the extradition might occur.

Thai authorities had earlier said that Bout, who faces U.S. charges of selling weapons to terrorists, would be taken on August 25 from his jail to a Bangkok airport, where U.S. officials planned to fly him to America.

Bout has proclaimed his innocence, while the Russian government has voiced opposition to his transfer to U.S. custody.

Bout is reputed to be one of the world's major illegal arms dealers, allegedly supplying weapons that were used in civil wars in South America, the Middle East and Africa.

He faces a maximum sentence of life in prison if convicted in the United States on charges including conspiracy to kill U.S. nationals and providing material support or resources to a foreign terrorist organization.

Bout has been fighting extradition since his March, 2008, arrest in a sting operation in Bangkok by U.S. agents posing as Colombian rebels.

Art collector James Stunt found not guilty of money-laundering


After a five-month trial in Leeds, UK, the bankrupt socialite and former art collector James Stunt was found not guilty of taking part in a £266m money-laundering operation. He was accused, along with four other co-defendants, of washing “dirty” cash through their companies to buy gold, which was shipped to Dubai and sold there.

The case was initially heard in 2022 but the jury failed to reach a verdict, and it was retried in March this year.

The four other men—Gregory Frankel, 47, Daniel Rawson, 47, Haroon Rashid, 54, and Arjun Babber, 32—were convicted in the same trial: only Rawson was present in court, and the other three are believed to have fled the country.

The prosecution argued that Stunt’s office in London was used to launder cash; he built a gold refinery at Sheffield Assay Office to turn scrap gold into ingots, which is how, he said, he met the other four men. In court he claimed he had no idea he was entering into a criminal conspiracy with them, although his company, Stunt & Co, took 70% of the profits from the scheme.

Stunt always denied the charges. He was previously the husband of the heiress Petra Ecclestone, daughter of Formula 1 boss Bernie Ecclestone, and notorious for his gambling and highly ostentatious lifestyle. He was also at one point a prominent and aggressive collector of British portraiture, notably by Peter Lely and Anthony van Dyck, and lent a group of his early Lelys to the Courtauld Institute in 2012.

In 2017 he sent 17 paintings to Dumfries House in Scotland, now owned by King Charles III’s charitable foundation; in 2022 The Art Newspaper questioned the authenticity of a number of paintings by Van Dyck owned by Stunt, and authenticated by Malcolm Rogers, the former director of the Museum of Fine Arts in Boston.

However, after his 2017 divorce, Stunt was eventually declared bankrupt. In 2024 he tried to claim that a Van Dyck double portrait, The Cheeke Sisters: Essex, Countess of Manchester and Anne, Lady Rich, painted around 1640, belonged to his father Geoffrey and so should not be included in his estate. But the insolvency and companies court judge Clive Jones dismissed his suit.

The Dumfries House loans is the subject of a film, The Royal Stunt, directed by Kief Davidson and due to be released this year. It was made after an intensive three-year investigation but the release was delayed pending the result of the Stunt trial.


Monday, March 17, 2025

Telegram CEO Pavel Durov back in Dubai after Paris arrest over criminal activity on app

 


Telegram founder Pavel Durov on Monday said he has returned to Dubai after his stunning arrest near a Paris airport last year tied to a French probe of criminal activity on his app.

Durov – who left his native Russia years ago after tangling with the Kremlin over free speech – was arrested last August and banned from leaving France.

He was quickly released on a $5.6 million bail and required to report to a police station twice a week.

In a post on Telegram on Monday, his encrypted messaging app, the tech billionaire said he was detained in France “due to an investigation related to the activity of criminals on Telegram. The process is ongoing, but it feels great to be home.”

“I want to thank the investigative judges for letting this happen, as well as my lawyers and team for their relentless efforts in demonstrating that, when it comes to moderation, cooperation, and fighting crime, for years Telegram not only met but exceeded its legal obligations,” he added.

Durov has been allowed to leave France only temporarily, after an investigating judge days ago authorized him to depart for “several weeks,” sources told French news agency AFP.

Last summer, French authorities said they charged the 40-year-old tech tycoon with being complicit in pervasive crime across the popular messaging app, including child sex abuse and drug trafficking.

Investigators questioned Durov for four days after apprehending him at Le Bourget airport in August, according to the Associated Press.

In September, Durov defended himself against the investigation and argued that he should not be held responsible for crimes committed on his app.

“Using laws from the pre-smartphone era to charge a CEO with crimes committed by third parties on the platform he manages is a misguided approach,” he wrote in a post on Telegram at the time.

 “Building technology is hard enough as it is. No innovator will ever build new tools if they know they can be personally held responsible for potential abuse of those tools,” he continued.

Durov’s Telegram has become an indispensable communication tool during the Russia-Ukraine war.

The messaging app has been used by government officials to send out air raid warnings, citizens to document war horrors firsthand and as a last news link between Russia and Ukraine.

Pro-democracy groups around the world have also used Telegram to organize demonstrations.

But the app has also come under fire for being used by extremist groups like the Islamic State, white nationalists and COVID-19 and QAnon conspiracy theorists.

Durov has also been the target of Russian state blacklisting after he refused to shut down activist groups on VKontakte – another popular app he founded known as the Russian version of Facebook – despite pressure from the Kremlin.

The groups — including one led by the late Russian opposition leader Alexei Navalny — had organized protests over the 2011 parliamentary election that claimed a victory for Putin’s United Russia party.

The ban, which a Russian state spokesperson called a “mistake,” was lifted hours later.

A month before the blacklisting incident, Durov was reportedly involved in a traffic accident that left a police officer slightly injured. The tech CEO refused to testify as a witness and instead fled the country, sources who knew him said.

Around the same time, a private equity firm connected to the Kremlin bought a 48% stake in VK – pushing out the founding partners who backed Durov, according to The Moscow Times.

Durov obtained citizenship in Saint Kitts and Nevis, living in self-imposed exile. He moved himself and Telegram headquarters to Dubai in 2017, and was later granted French citizenship in 2021.

Washington man accused of having enough fentanyl to kill 278,000 people after getting clemency from Dem gov

 


A Washington man arrested on nearly a dozen drug and weapons charges on Thursday had been granted clemency by former Gov. Jay Inslee in 2019.

The arrest of Percy Levy, 54, was first reported in the Lynwood Times, a Snohomish County newspaper.

The Snohomish Regional Drug Task Force made the arrest after a 16-month investigation. The Snohomish County Sheriff’s Office said the suspect was apprehended during a traffic stop in Everett.

A warrant was later served on the suspect’s home, where authorities said detectives recovered 2,818 grams of powder cocaine, 14.7 grams of rock cocaine and 556 grams of fentanyl. That is enough fentanyl to kill approximately 278,000, according to the US Drug Enforcement Agency, which says just 2 milligrams of the substance could be deadly.

Detectives also found packaging material, a digital scale and a handgun inside the home.

The suspect was arrested for unlawful possession of firearm, possession of stolen firearm and multiple counts of possession of a controlled substance with intent to deliver.

Levy was charged with 11 Class B Felony charges, according to online inmate records of the Snohomish County Sheriff’s Office Corrections Bureau. He is being held on a $1.5 million bond.

Inslee granted Levy clemency in 2019, according to a document from the state Clemency and Pardons Board.

Levy has a criminal history dating back to when he was 13 years old, according to the Lynwood Times. He spent 17 years in prison after a 2002 arrest for a drug house robbery.

Inslee’s decision regarding Levy in 2019 came after the 2021 of State v. Blake ruling that reclassified possession of controlled substances as a misdemeanor, the paper reported.

In the six years following his clemency, Levy dedicated himself to criminal justice reform, according to the newspaper.

He worked as a community outreach specialist for the Washington Defender Association and founded Redemption Auto, a car dealership in Everett. Levy is also treasurer on the Board of the Black Lives Matter Seattle-King County chapter.

The sheriff’s office said the matter remains under investigation.

Convicted killer in slaying of rabbi that shook New York tries to clear his name

 


Carl Miller insists he wasn’t in Brooklyn the morning of Oct. 25, 1979, the day he turned 19 and Rabbi David Okunov was killed in Crown Heights by a gunman who shot him from 6 inches away before fleeing with his prayer bag.

Nearly 46 years later, Miller, who was convicted of murder and served 30 years in state prison, is hoping to clear his name.

“I don’t know anything about what happened,” Miller, now 64, told the Daily News in an interview at his lawyer’s office. ” And I wasn’t even near where it happened.”

Okunov, 68, who had recently emigrated from Russia to avoid religious persecution, was killed on his way to morning prayers. He left his home on Crown St., turned left onto Troy Ave., then turned right onto Montgomery St. Moments later, he was confronted and shot by a gunman armed with a .32-caliber handgun, the bullet striking him in his right eyebrow.

Hours later, at least 2,000 mourners marched through the streets for Okunov’s funeral, according to media reports at the time. Then-Gov. Hugh Carey said he was “horrified” by the murder, which occurred at a time of inflamed tensions between Hasidic and Black residents.

The Brooklyn DA’s office believes they got the right guy and is fighting Miller’s effort. Okanuv’s family members could not be reached for comment.

In court papers, Miller’s lawyer. James Henning, said the case against his client was built on the constantly changing story provided by Darryl Brown, who was 16 at the time of the murder and lived in the same Crown Heights building as Miller. In fact, the court papers said, Brown first told police he woke at 8 a.m. the day of the murder, 80 minutes after Okunov was shot.

 “Miller was prosecuted on the scantest of evidence,” Henning wrote in the motion to vacate, filed in Brooklyn Supreme Court May 9, 2024.  “There is no dispute that the investigative focus on Miller and his arrest, indictment and conviction were based entirely on the word of Darryl Brown, an inconsistent witness, who was initially a suspect in Rabbi Okunov’s murder and whose story changed repeatedly.”

The motion claims that prosecutors failed to turn over exculpatory evidence — that Brown himself was at some point considered a suspect and stood in a lineup. It also says Miller stood in two lineups but was not picked by either witness, both of whom had described a man roughly 5 feet 9 inches tall and slim, about 150 pounds, running from the crime scene holding the prayer bag. Miller at the time was recorded as 6 feet 1 inch tall and 174 pounds.

One of those witnesses, a retired dress cutter who was walking his dog, has since died. The other, Chanina Sperlin, who was 16 at the time, saw the man with the prayer bag run to a building on Crown St. inside which police later found property belonging to Brown, according to court papers. The prayer bag was never found.

Henning told The News that of the six exoneration cases he’s worked on the evidence in this case “is the weakest I’ve ever seen.”

The office of Brooklyn District Attorney Eric Gonzalez argues in court papers that the conviction should stand.

The papers noted that the DA’s Conviction Review Unit twice looked over the case — even investigating, following a tip, that a woman had killed the rabbi — and both times closed out its probe.

The court papers noted that Brown and Sperlin wouldn’t cooperate with its review.

At a Feb. 19 hearing, Miller’s trial lawyer, Howard Weiswasser, said he was not aware during the trial that two witnesses had viewed a lineup with Brown in it. He also said he did not believe he had been given by trial prosecutors a statement in which Brown the day before the murder said he wanted to rob an old Jewish man.

 “Because had I had the statement at the time of trial, I would have cross-examined [Brown] on it,” Weiswasser said at the hearing. “And having reviewed the trial transcript I did not cross examine on it.”

The same day, the long-retired lead detective on the case, Thomas Sorrentino, could not recall much about the investigation, including specific names as well as his interview of Brown.

He remembers a few days later being picked up on a warrant related to an assault case for which he missed a court appearance, remembers detectives telling him he had been picked out of a lineup — which it turned out he hadn’t — and remembers that police were certain he was the killer.

“‘You might as well confess.'” Miller said he recalls being told. “I said, ‘Confess about what? I wasn’t there.’

“They were trying to put me some place I wasn’t.”

Miller was charged then convicted on Sept. 18, 1980. A month later he was sentenced to 25 years to life.

He said he was determined from the start to clear his name, but various attempts to get lawyers to take his case and to get records and documents through the Freedom of Information Law failed until he met Henning. Miller’s motion to vacate his conviction was given a boost when Judge Guy Mangano on Jan. 10 ordered a hearing, though a decision in the case is not expected any time soon.

Miller said he is trying to clear his name so his two grandchildren can know the truth.

“They need to know who their grandfather is,” Miller said. “This is something I don’t want them to be a part of, knowing their grandfather is a convicted murderer.

“That’s why I’m fighting for this.”

Wednesday, March 12, 2025

Brazil’s Lava Jato investigation: the biggest corruption scandal of the last decade

 


The largest and most infamous corruption scandal of the last decade began with a criminal investigation into the operations of Brazil’s largest corporation: Petrobras. The scandal got its name because the organizers of the bribery, kickback and money laundering scheme used a financial services company in Brasília located next to a gas station and car wash (Lava Jato). The investigation started with a seemingly minor complaint made in 2009 to the Federal Prosecutor’s office in Curitiba, Paraná, by a businessman concerned that somebody was using his company to launder money. Prosecutors followed this lead and discovered that political operators affiliated with the government had been funneling illegal campaign contributions from companies doing business with Petrobras in exchange for favourable treatment in construction contracts and in the procurement of goods and services.

The scandal exploded onto the national scene in 2014, when a team of highly motivated federal prosecutors mounted an aggressive investigation under the supervision of a judge with experience in public corruption cases (Sergio Moro). Unlike most corruption scandals, which typically lead to prolonged investigations and inconsequential legal outcomes, this scandal triggered an avalanche of information which destabilized governments in Brazil, Peru and Ecuador.

The first accusations centred on the construction of an oil refinery in Pernambuco, but the probe soon revealed it extended to other projects and every major construction company in Brazil. Unsurprisingly, the recipients of the bribes were high-level government functionaries, including both allies and opponents of the governing coalitions of President Lula da Silva and his successor Dilma Rousseff. The evidence extracted from the plea bargains negotiated by the prosecutors was unprecedented and, because shares of Petrobras are traded on the New York Stock Exchange, the indictments triggered investigations by regulatory and judicial authorities in the United States. Eventually, the sworn testimony of business executives collaborating in exchange for leniency forced the Supremo Tribunal Federal (STF) to accelerate the prosecution of influential elected officials, including governors, members of Congress and eventually, of a sitting president (Temer).

The criminal investigation demonstrated how bribes distorted investment decisions by public officials. Reportedly, companies paid between one and three per cent of a contract’s gross value for hundreds, perhaps thousands, of overpriced construction projects. The kickbacks were laundered through domestic and offshore bank accounts, which allowed companies to camouflage the bribes as fees paid to legal firms and consulting companies or as the procurement of (overpriced) goods and services.

Petrobras officers benefited in exchange for their willingness to manipulate the terms of a public bidding process to favour a specific company, while companies conspired to divide up the lucrative contracts among themselves. Politicians were rewarded for their votes in Congress, while high-level functionaries in state ministries and regulatory agencies were rewarded for their loyalty to a political party. The task force eventually arrested 292 individuals, of whom 278 either pleaded guilty or were convicted of crimes that included fraud, bribery and money laundering. Prominent individuals from five of the country’s largest political parties were found guilty in a court of law, while persons from an additional thirteen parties were indicted for illegal activities and representatives from another fifteen parties were investigated for questionable behavior.

The cost to Petrobras was reflected in its balance sheet of 2014 when it registered a US$2 billion write-down to offset the bribes paid to the companies that had participated in the bid-rigging scheme. The investigation in the United States led to a 2018 settlement in which Petrobras agreed to pay US$853 million in fines levied by the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC), of which about 80% was returned to the Brazilian state. Shortly thereafter, the company settled a class-action civil suit filed on behalf of investors for an additional US$2.6 billion. A criminal investigation brought by the DOJ in Manhattan led to the arrest and conviction of the CEO of Odebrecht, Brazil’s largest construction company and, at the time, the country’s second-largest privately held company.

At the heart of the scandal was a secret agreement among thirteen construction companies, known as the Cartel de Empreiteiros, who agreed not to compete on individual Petrobras contracts. The conspiracy to defraud the government went well beyond the cartel’s business transactions with Petrobras and infected the Programa de Aceleração do Crescimento (PAC), a national programme to improve basic infrastructure and stimulate the national economy via public works projects. Between 2007 and 2015, the program allocated about R$2.1 trillion (about US$500 billion) to projects across the country. Assuming the custom of paying a bribe of between one and three per cent, the graft associated with the PAC could be as high as US$5 billion to US$15 billion. If those practices led to overbilling, however, then the total cost to the nation probably exceeded US$50 billion.

The impacts of the Lava Jato scheme are still reverberating through the Brazilian economy. Government resources were wasted on non-productive expenditures, and the scandal also delayed strategic investment in several key sectors. According to a study by a policy institute linked to labor unions, the Lava Jato scandal reduced investments, leading to a net loss of about 4.4 million jobs and a reduction of R$172 billion (US$34 billion) in investments in energy production and construction. An environmental activist might not bemoan the loss of those types of investments, but the Fundação Getulio Vargas estimated it reduced national GDP by about 3.5 per cent each year between 2014 and 2017 (US$ 10 billion to US$ 20 billion per year). This is a conservative estimate, however, because losses compound over time and inflict permanent damage on Brazilian society.

Arguably, the Lavo Jato scandal and the disillusionment with the political elite set the stage for the election of Jair Bolsonaro, whose actions threatened democratic institutions and led to a rollback of environmental regulations key to the conservation of the Amazon and the welfare of Indigenous communities. Bolsonaro was narrowly defeated by Inácio Lula da Silva in the 2022 elections; however, Lula must now govern a country where a significant share of the population sees him as a corrupt politician who is free thanks to a dubious decision by the Supreme Court.

Lava Jato in the Legal Amazon

The scandal has impacted the Pan Amazon in multiple ways, particularly by the construction of numerous infrastructure projects executed by the PAC and financed by SUDAM.

Many of these investments were controversial because their environmental and social impacts were not given appropriate due diligence as the decision-making process was tainted by conflicts of interest, including:

  • Urucu – Coari – Manaus Natural Gas Pipeline System: A construction consortium composed of Camarga Correa, OAS and Andrade-Gutiérrez admitted to paying kickbacks of R$ 15 million on total contracts of approximately R$ 1.5 billion. The total amount of fraud might be larger, however, because in 2007 a Petrobras petroleum engineer, now deceased, denounced over-billing equivalent to 50% of the total budget of R$2.5 billion, which by 2014 had increased to more than R$4.5 billion.
  • Madeira hydropower complex: These two dams were built and operated by two separate consortia. Energia San Antonio was built largely by Odebrecht, which has admitted paying bribes to politicians who supported the project. Energia Sustentável do Brasil was built by Tractebel, a French company that was not directly implicated in the Lava Jato scandal. Nonetheless, the fair value of the contract has been questioned following the revelation of campaign contributions of approximately R$1.8 million made by Tractabel to the Rousseff re-election campaign in 2014.
  • Belo Monte hydropower facility on the Xingu: Andrade Gutiérrez, Camargo Corrêa and Odebrecht pleaded guilty to kickbacks of R$ 150 million out of a R$ 2.6 billion contract. Payments were funneled to Senators Renan Calheiros (PMDB), Edison Lobão (PMDB), Valdir Raupp (PMDB), Romero Jucá (PMDB), Jader Barbalho (PMDB) and Delcídio do Amaral (PT). The charges against all five defendants were dismissed in 2023 following a judgment by the Tribunal Supremo Federal that prosecutors had acted inappropriately during the investigative phase of the prosecution.
  • Amazonian Highways: The Cuiabá – Santarem highway (BR-163) was paved at a cost of ~R$2 trillion (US$ 400 million); the ongoing improvement of the Transamazônica (BR-230) was budgeted at ~R$1.3 trillion (US$ 260 million); BR-364 in Acre was allocated R$1.1 trillion (US$230 million), and the ongoing pavement of BR-319 between Humaitá and Manaus received ~R$466 million (US$95 million).

Lava Jato in the Andean Amazon

The infrastructure investments in Brazil occurred simultaneously with a similar construction boom in Peru financed by multilateral investment banks via the Iniciativa para la Integración de la Infraestructura Regional Sudamericana (IIRSA). These investments in basic infrastructure were built by five members of the Brazilian cartel (Odebrecht, Andrade-Gutiérrez, Camargo-Corrêa, OAS, Queiroz Galvão), and Peru’s largest domestic construction company (Graña & Montero).

Odebrecht was the most active and participated in several high-profile projects not only as a contractor but also as an investor and concessionaire. These investments were made using the public-private partnership model promoted by the IDB, where the corporate partner raises the financial capital for construction in exchange for long-term management contracts. The companies met their investment obligations by borrowing money; because of an idiosyncrasy of international bond markets, however, the securities were classified as sovereign debt. Cost overruns plagued every project, and at least one was canceled, which has piled billions of dollars of debt onto the country’s sovereign balance sheet.

The Peruvian government estimates Odebrecht overcharged by at least US$283 million on contracts between 1998 and 2015; however, independent sources place that number at ~US$1.3 billion – approximately nine per cent of the debt associated with the various projects worth US$17 billion. The scandal calls into question multiple contracts over several decades, among them high-profile infrastructure projects in the Peruvian Amazon, including:

  • Corredor Interoceánico Sur. Built between 2005 and 2008 at approximately double the estimated cost of US$1.2 billion; this IIRSA-sponsored initiative was financed by the IDB, BNDES and Odebrecht, which was awarded a 25-year operating concession.
  • Corredor Interoceánico Norte. Built between 2005 and 2013 at a cost of US$1.2 billion; this IIRSA initiative was financed by the IDB, CAF and Odebrecht, which was awarded an operating concession lasting 25 years.

Both contracts were awarded during the administration of President Alejando Toledo (2001–2006), who has been accused of accepting a US$20 million bribe. Odebrecht (now Novonor) continues to operate both concessions, one of which is profitable (Norte) and one of which is not (Sur).

  • Central Hidroeléctrica Chagalla. This hydropower facility on the upper Huallaga River was built between 2010 and 2016 with a total investment of US$1.2 billion. The project was approved during the government of Alan García and financed by the IDB and BNDES. In 2017, Odebrecht sold its interest to a Chinese company for US$1.3 billion, presumably to reduce the debt on its balance sheet and prepare for its reorganisation under Brazil’s bankruptcy laws.
  • Gasoducto Sur Peruano was a US$7.4 billion project that was supposed to integrate southern Peru and northern Chile with the gas fields of Camisea. The concession was awarded in 2015 to a consortium composed of Odebrecht, Graña & Montero, and a Spanish energy company (ENEGAS). Odebrecht pled guilty to paying a US $5 million bribe to an executive of Petroperú and, allegedly, to then President Ollanta Humala (2011–2016). The allegations of graft forced the government of Pedro Pablo Kuczynski to cancel the project in 2017. In an audacious move, Odebrecht (now Novonor) sued the Peruvian state in 2020 for breach of contract and is demanding indemnification of US$ .2 billion.

According to the US Department of Justice, Odebrecht paid US$29 million in bribes to at least two and possibly four of Peru’s recent presidents. In 2018, Alejandro Toledo was indicted on charges of extortion and bribery, followed by similar charges against Alan García, Ollanta Humala and Pedro Pablo Kuczynski. Odebrecht also made contributions to the leading opposition candidate, Keiko Fujimori, who is being tried for money laundering and other crimes.

Ecuador terminated all government contracts with Odebrecht in 2008 following a dispute related to overbilling on the San Francisco Hydroelectric Power Plant; the company negotiated a return in 2010 by bribing the vice president with US$33.5 million, a sum hidden within its contract bid to construct a refinery for Petroecuador. The payoff, which was revealed in a US courtroom, was a precursor of an additional US$150 million in fraudulent charges between 2011 and 2015 at five mega-projects that were originally contracted at US$1.4 billion. These and other bribes were revealed in 2017 in the Escándalo de Sobornos, which led to the incarceration of the Odebrecht’s chief of operations and the former vice president who had solicited the bribe (Jorge Glas); the graft was approved with the knowledge and assent of then-President Rafael Correa, who was convicted in absentia and is currently living in exile in Belgium.

Brazilian construction companies began operating in Bolivia in 1987 as the country emerged from a period of economic instability when multilateral agencies provided special assistance loans for infrastructure projects. Andrade Gutiérrez was awarded several contracts that, although never subject to a serious investigation, were reported to have been awarded via a flawed, non-transparent bidding process. Odebrecht has adjudicated only one small project in Bolivia, and it was not implicated in the criminal case brought by the US Department of Justice. Nonetheless, declarations by defendants employed by Odebrecht in Peru and OAS in Brazil have alluded to payments made to Bolivian officials.

The most controversial project was awarded to OAS, which submitted an uncontested US$400 million bid to build a road that would transect the Territorio Indígena y Parque Nacional Isiboro-Sécure (TIPNIS). This project, which was to be financed by BNDES, was put on hold when the Indigenous inhabitants of TIPNIS voted to reject the project. The government continues to insist that construction will move forward and has worked to change the decision made by the communities within the TIPNIS.

Law firm Simpson Thacher agrees to UK fine over money laundering rule breaches

 


U.S. law firm Simpson Thacher & Bartlett was fined 300,000 pounds ($389,069) on Wednesday over breaches of anti-money laundering rules at its London office.

The firm agreed to a settlement with the Solicitors Regulation Authority (SRA), which regulates solicitors in England and Wales, under which Simpson Thacher will also pay 62,000 pounds towards the SRA's legal costs.

Simpson Thacher admitted failing to have a firm-wide risk assessment between June 2017 and March 2020, as required by British money laundering regulations.

It also accepted not having a fully-compliant firm-wide risk assessment from March 2020 until February 2023, after the SRA announced it was bringing a regulatory case in August.

The SRA did not allege Simpson Thacher's admitted breaches led to any money laundering, but the regulator said in court filings, opens new tab that they created "an increased risk of money laundering".

A spokesperson for Simpson Thacher said in a statement that the firm's London office "acknowledges and regrets certain historic shortcomings in some of our UK AML (anti-money laundering) written policies".

The spokesperson added that the firm has "made significant investments to enhance our robust compliance function".

An SRA spokesperson said in a statement: "Money laundering is not a victimless crime and can have detrimental effects on many, many people.

"Solicitors have an important role to play in keeping the profits of crime out of the profession and the wider UK economy."

Simpson Thacher is the latest major law firm to face disciplinary action over alleged breaches of money laundering regulations.

Global law firm Clyde & Co was last year fined 500,000 pounds after admitting multiple breaches of money laundering regulations relating to a long-standing client.

The SRA's prosecution of fellow global firm Dentons was dismissed by the Solicitors Disciplinary Tribunal in March. But that decision was overturned on appeal on Tuesday and the SRA's case was sent back to the tribunal.