Telefónica Venezolana C.A., a subsidiary of Telefónica S.A. based in Venezuela, has agreed to pay over $85.2 million to settle a U.S. Department of Justice investigation into foreign bribery allegations. The company is accused of bribing Venezuelan government officials to gain preferential access to U.S. dollars through a currency auction.
The company entered into a deferred prosecution agreement with the Southern District of New York, facing charges related to conspiracy under the Foreign Corrupt Practices Act (FCPA). Principal Deputy Assistant Attorney General Nicole M. Argentieri commented on the case: "Telefónica Venezolana chose to support a corrupt regime to circumvent the difficulties of conducting legal business in Venezuela."
U.S. Attorney Damian Williams stated, "Intermediaries then funneled the bribe payments through U.S. correspondent bank accounts." He emphasized that his office will not tolerate misuse of the U.S. financial system for corruption.
Kareem Carter from IRS-CI highlighted efforts against corporate fraud: "We are committed to pursuing investigations into corporate fraud in an effort to protect consumers from bearing the costs associated with criminal activity." Katrina W. Berger from Homeland Security Investigations added that this resolution shows their commitment "to investigate and bring to justice any corporations engaging in such financial crimes."
In 2014, Telefónica Venezolana participated in a currency auction that allowed it to exchange bolivars for dollars by making $28.9 million in corrupt payments through intermediaries and suppliers who inflated equipment prices.
As part of its settlement, Telefónica Venezolana will cooperate with ongoing investigations and enhance its compliance program as needed, including reporting improvements and remediation efforts.
The resolution considers various factors such as cooperation with authorities despite initial delays and significant remedial actions taken by Telefónica Venezolana, which include disciplining involved employees and enhancing internal controls.
A penalty reflecting a 20% reduction off certain guidelines was calculated at $85,260,000 under the U.S. Sentencing Guidelines due to these considerations and past history involving similar issues with another subsidiary.
Investigations are conducted by IRS-CI and HSI as part of global efforts against illicit financial activities, with prosecutorial roles held by Nicola Mrazek, Abdus Samad Pardesi, and Jilan Kamal.
Assistance was provided by international authorities from Panama, Switzerland, Luxembourg along with DOJ's Office of International Affairs.