Former Embraer Exec Pleads Guilty to Jets-for-Cash Bribery Scheme
A multimillion deal was cemented with a bribery agreement between a Saudi energy company official and the executive with the Brazilian aircraft manufacturer Embraer.
December 21, 2017 at 06:30 PM
3 minute read
An executive with Brazilian aircraft manufacturer Embraer pleaded guilty Thursday to a $1.65 million bribe and kickback scheme to secure the sale of aircraft to the national Saudi energy company Aramco.
Colin Steven, a British national, was an executive with Embraer's executive jets division responsible for overseeing sales in the Middle East among other regions. In 2009, Steven met with the unnamed Saudi official to discuss the state-owned oil company's interest in purchasing used aircraft. At that meeting, according to court papers, the Saudi official agreed to help Steven with the contract, and to switch from used to new aircraft, if Steven was willing to pay.
Prosecutors said that Steven, with the approval of a supervisor in London, agreed to a per-aircraft payment of $550,000 to the official, for a total of $1.65 million.
By early 2010, Steven had developed a scheme to use a South African company run by personal friends as a way to disguise the payment to the Saudi official. The company, which prosecutors said had no experience in either the aircraft industry or Saudi Arabia, would be paid a “finders fee” for the plane sales transaction, allowing for the $1.65 million to pass through the company and onto the Saudi official.
In early 2010, Aramco purchased through its U.S. subsidiary three new Embraer aircraft for $93 million. Beginning in March of that year, the bribe funds were funneled through the South African company and into Swiss and Bahrain bank accounts of an individual working as an intermediary for the Saudi official.
Even as the Saudi official was being bribed, Steven and another unnamed executive at Embraer concocted a plan to receive a kickback. The South African company didn't, it turned out, deliver all the funds to the Saudi official. Nearly $130,000 was transferred out of the bribery funds to Steven's bank account in the United States. At some point the executive, who had recently been promoted, informed Steven he didn't want his share; Steven kept the full amount.
In 2014 an FBI agent interviewed Steven about the wire transfers from the South African company three years earlier. Prosecutors said he lied about the nature of the funds, claiming they were sent to buy real estate as part of a potential business venture. Steven pleaded guilty before U.S. District Judge Alison Nathan of the Southern District of New York to seven counts, including conspiracy to violate the Foreign Corrupt Practices Act, wire fraud, and money laundering. As part of his plea, Steven agreed to cooperate with the government
Steven was represented by Arnold & Porter Kaye Scholer partner Andrew Bauer, who declined to comment.
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