Swiss-based Gunvor to pay $661 million for Ecuador bribery scheme

BROOKLYN (CN) — Gunvor, a multinational energy trading company based in Geneva, agreed to pay $661 million in damages Friday after pleading guilty in a scheme to bribe Ecuadorian officials to award contracts to purchase oil products.

U.S. District Judge Eric Vitaliano, a George W. Bush appointee, accepted Gunvor’s guilty plea of one count of conspiracy to violate the Foreign Corrupt Practices Act. Gunvor general counsel, Jon-Baptiste Leclercq, appeared on behalf of the company for the court proceedings.

From 2011 to 2020, Leclercq admitted, company traders conspired to bribe Ecuadorian officials to obtain contracts with the state-owned oil company Petroecuador.

Per a plea agreement, Gunvor agreed to pay approximately $374 million in criminal fines and $287 million in forfeiture. Gunvor is required to pay about $474 million within the next 10 business days, while the remaining amount will have to be paid within the next year.

The agreement also states Gunvor may credit up to $93 million of its criminal fines with payouts to the governments of Switzerland and Ecuador. Whatever remaining balance remains must be paid to the U.S. government within the next year and 10 business days.

"Happy to see this chapter has ended," U.S. District Judge Eric Vitaliano said Friday. "I look forward to Gunvor’s continued participation, lawfully, in the market."

Separately, Gunvor reached an agreement with the Office of the Attorney of General of Switzerland on Friday to pay the country approximately $93 million.

An agreement with Ecuador has not yet been reached. Gunvor spokesperson Seth Pietras said the company expects to pay approximately the same amount as to Switzerland.

“As a company Gunvor made mistakes at the time, for which we are sorry,” Gunvor Group Chairman, Torbjörn Törnqvist, said in a statement. “Today, Gunvor upholds an industry-leading compliance program that we are committed to continuously enhance. Corruption has not place in our company and will never be tolerated.”

“Today’s guilty plea and sentencing marks yet another example of this office’s efforts to combat widespread corruption,” U.S. Attorney for the Eastern District of New York Breon Peace said in a statement.

According to court documents, Gunvor and its co-conspirators paid more than $97 million to intermediaries to bribe Ecuadorian officials — including former high-ranking Petroecuador official Nilsen Arias Sandoval — in exchange for help obtaining contracts.

The bribe payments were routed through banks in the United States using shell companies in Panama and the British Virgin Islands controlled by Gunvor’s co-conspirators. As one example, prosecutors said a Gunvor employee used bribe money to purchase an 18-karat gold Patek Philippe wristwatch for Sandoval.

The bribes mainly came through “volume fee” payments that corresponded with the amount of oil purchased. In exchange for the bribes, Ecuadorian officials helped Gunvor win contracts to provide a series of oil-backed loans to Petroecuador.

The loans were made through other state-owned entities, which Gunvor used as “fronts” to win business from the Ecuador oil company that other private companies would not have access to, prosecutors said.

According to court documents, Ecuadorian officials received approximately $1.7 million in bribes from Gunvor.

“Foreign bribery emboldens corrupt officials and undermines the rule of law,” Brent Wible, acting senior counselor of the Justice Department’s Criminal Division, said in a statement. "Gunvor’s guilty plea demonstrates that the Criminal Division remains resolute in our efforts to root out bribery and official corruption."

Individuals involved in the scheme have also pleaded guilty for their role in Gunvor’s bribery scheme, including former Gunvor employees Antonio Pere Ycaza, Enrique Pere Ycaza and Raymond Kohut. Sandoval, the former Petroecuador official, also pleaded guilty in 2022.

Follow @NikaSchoonover

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