Freepoint Commodities LLC, a Stamford-headquartered commodities trading company, has reached a $98 million settlement to resolve an investigation by the U.S. Department of Justice related to Foreign Corrupt Practices Act (FCPA) violations.
According to court documents, Freepoint entered into a three-year deferred prosecution agreement (DPA) with the DOJ in connection with a criminal information filed in the District of Connecticut. The company was accused of conspiracy to violate the anti-bribery provision of the FCPA for a scheme to pay bribes to Brazilian government officials to secure business with Brazil’s state-owned and state-controlled oil company, Petróleo Brasileiro S.A. – Petrobras.
Between approximately 2012 and 2018, Freepoint and its co-conspirators paid bribes to Petrobras officials in exchange for confidential information about pricing and bids submitted by Freepoint’s competitors. Freepoint and its co-conspirators concealed the scheme by communicating using code words and encrypted messaging applications, engaging in sham negotiations, and funneling the bribes through an intermediary who used offshore bank accounts and shell companies. Freepoint earned over $30 million in profits in connection with the scheme.
In addition to the DOJ settlement, Freepoint agreed to pay more than $7.6 million to the Commodity Futures Trading Commission in a related matter.
“This office and our federal law enforcement partners are keeping a watchful eye on those not only involved in the financial industry, but all U.S. businesses that operate overseas, to ensure that they are complying with our nation’s laws,” said U.S. Attorney Vanessa Roberts Avery for the District of Connecticut. “This hefty financial sanction and deferred prosecution agreement should both serve as a deterrent to illegal conduct in the U.S. and abroad, and as a reminder that the Justice Department incentivizes those who report illegal conduct and work with us to correct wrongdoing.”
The DOJ recently charged three individuals in relation to Freepoint’s bribery scheme: Glenn Oztemel, a senior oil trader at Freepoint; Gary Oztemel, the brother of Glenn Oztemel, who allegedly used his company Oil Trade & Transport S.A. to assist Freepoint in obtaining or retaining business in Brazil; and Eduardo Innecco, who worked as an agent for Freepoint and received purported consulting fees and commissions that he allegedly used to pay bribes to Petrobras officials on behalf of Freepoint. The case against the trio is pending.
