DOJ ANNOUNCES ADDITIONAL INDICTMENTS IN FIFA RACKETEERING CONSPIRACY AND CORRUPTION CASE

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, December 3, 2015

Sixteen Additional FIFA Officials Indicted for Racketeering Conspiracy and Corruption

The New Defendants Include Five Current or Former FIFA Executive Committee Members and the Current Presidents of CONCACAF and CONMEBOL; Guilty Pleas for Eight Others, Including Jeffrey Webb and the Former Presidents of the Colombian and Chilean Soccer Federations, also Announced

A 92-count superseding indictment was unsealed earlier today in federal court in Brooklyn, New York, charging an additional 16 defendants with racketeering, wire fraud and money laundering conspiracies, among other offenses, in connection with their participation in a 24-year scheme to enrich themselves through the corruption of international soccer.  The superseding indictment also includes additional charges for seven of the defendants still pending extradition following the return of the original indictment last May.  The guilty pleas of eight defendants – including Jeffrey Webb, Alejandro Burzaco and José Margulies, three of the defendants indicted last May – were also announced today.

The new defendants charged in the superseding indictment include high-ranking officials of FIFA, the organization responsible for the regulation and promotion of soccer worldwide, as well as high-ranking officials of other soccer governing bodies that operate under the FIFA umbrella.  The defendants Alfredo Hawit and Juan Ángel Napout – the current presidents of CONCACAF and CONMEBOL, respectively, as well as current FIFA vice presidents and Executive Committee members – are among the 16 additional soccer officials charged with racketeering and bribery offenses.  CONCACAF and CONMEBOL are two of FIFA’s six continental confederations.  The new defendants also include Marco Polo del Nero and Ricardo Teixeira, the current and former presidents of the Brazilian soccer federation, both of whom are also former members of the FIFA Executive Committee, as well as José Luís Meiszner and Eduardo Deluca, the current and former general secretaries of CONMEBOL.  Within UNCAF, the Central American regional soccer union operating within CONCACAF, the charges in the superseding indictment name the current and/or former presidents of nearly every country in the region: Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama.  Taken together, the 27 defendants in the superseding indictment are alleged to have engaged in a number of schemes all designed to solicit and receive well over $200 million in bribes and kickbacks to sell lucrative media and marketing rights to international soccer tournaments and matches, among other valuable rights and properties.

The charges were announced by Attorney General Loretta E. Lynch, FBI Director James B. Comey, U.S. Attorney Robert L. Capers of the Eastern District of New York, Assistant Director in Charge Diego G. Rodriguez of the FBI’s New York Field Office, Chief Richard Weber of Internal Revenue Service-Criminal Investigation (IRS-CI) and Special Agent in Charge Erick Martinez of the IRS-CI Los Angeles Field Office.

Early this morning, Swiss authorities in Zurich arrested two of the defendants charged in the superseding indictment – Hawit and Napout – at the request of the United States.  Also this morning, a search warrant was executed at Media World, a sports marketing company based in Miami.

The new charges unsealed today bring the total number of individuals and entities charged to date to 41.  Of those, 12 individuals and two sports marketing companies have already been convicted as a result of the ongoing investigation.  The convicted defendants have agreed to pay more than $190 million in forfeiture.  In addition, more than $100 million has been restrained in the United States and abroad in connection with the alleged criminal activity.  The United States has issued mutual legal assistance requests seeking the restraint of assets located in 13 countries around the world.

“The Department of Justice is committed to ending the rampant corruption we have alleged amidst the leadership of international soccer – not only because of the scale of the schemes, or the brazenness and breadth of the operation required to sustain such corruption, but also because of the affront to international principles that this behavior represents,” said Attorney General Lynch.  “The message from this announcement should be clear to every culpable individual who remains in the shadows, hoping to evade our investigation: You will not wait us out.  You will not escape our focus.”  Attorney General Lynch extended her grateful appreciation to the authorities of the government of Switzerland for their continuing outstanding assistance and collaboration in this investigation, and to the authorities in a number of other countries, including Brazil and Colombia, for their assistance as well.

“For decades, these defendants used their power as the leaders of soccer federations throughout the world to create a web of corruption and greed that compromises the integrity of the beautiful game,” said Director Comey.  “I want to thank all the agencies for their hard work and for showing the world that we do not tolerate this criminal activity.”

“The charges unsealed today send a clear message to those who corrupted a sport beloved by millions to satisfy their own greed: We are determined to put a stop to bribery and corruption in international soccer and to make room for a new era of integrity and reform,” said U.S. Attorney Capers.  “This indictment is the latest step in that effort, but our work is not done.  While our investigation continues at home, we also look forward to continuing our collaboration with our international partners, including in particular the Swiss authorities, because there is so much yet to be done.”  Mr. Capers extended his thanks to the agents, analysts and other investigative personnel with the FBI New York Eurasian Joint Organized Crime Squad and the IRS-CI Los Angeles Field Office, as well as their colleagues in the United States and abroad, for their continuing tremendous effort in this case.  Mr. Capers also thanked the U.S. Marshals Service for its continuing assistance.

“The brazenness with which the individuals indicted today breached the integrity of the U.S. financial system to promote and conceal their criminal schemes is quite alarming,” said Chief Weber.  “While it is one of the most complex worldwide financial investigations ever conducted, it is also an eye opener to everyone that such greed and corruption could be hiding in plain sight within the world’s most popular sport.  By conspiring to enrich themselves through bribery and kickback schemes relating to media and marketing rights, the defendants undermined the process of fair and open competition, corrupting the beautiful game for their own personal gain.”

The charges in the superseding indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

Overview of the Superseding Indictment

As alleged in the superseding indictment, FIFA and its six continental confederations – including CONCACAF, headquartered in the United States, and CONMEBOL, the confederation headquartered in South America – together with affiliated regional federations, national member associations and sports marketing companies, constitute an enterprise of legal entities associated in fact for purposes of violating the federal racketeering laws.  The principal – and entirely legitimate – purpose of the enterprise is to regulate and promote the sport of soccer worldwide.

Like the original indictment, the superseding indictment alleges that between 1991 and the present, the defendants and their co-conspirators corrupted the enterprise by engaging in various criminal activities, including fraud, bribery and money laundering.  Two generations of soccer officials abused their positions of trust for personal gain, frequently through an alliance with unscrupulous sports marketing executives who shut out competitors and kept highly lucrative contracts for themselves through the systematic payment of bribes and kickbacks.  All told, the soccer officials are charged with conspiring to solicit and receive more than $200 million in bribes and kickbacks in exchange for their official support of the sports marketing executives who agreed to make the unlawful payments.

The schemes alleged in the original indictment related to the solicitation and receipt of bribes and kickbacks by soccer officials from sports marketing executives in connection with the commercialization of the media and marketing rights associated with various soccer matches and tournaments, as well as schemes related to the payment and receipt of bribes and kickbacks in connection with the sponsorship of the Brazilian soccer federation by a major U.S. sportswear company, the selection of the host country for the 2010 World Cup and the 2011 FIFA presidential election.

The new allegations in the superseding indictment relate to a series of bribery schemes in connection with multiple cycles of FIFA World Cup qualifiers and international friendly matches involving six Central American member associations within UNCAF; a bribery scheme implicating many top CONMEBOL officials relating to the sale of broadcasting rights to the CONMEBOL Copa Libertadores over an extended period; and a scheme by an Argentinian sports marketing company to obtain various rights properties from CONCACAF by paying bribes to three Central American soccer officials to cause them to exert their influence in favor of the company.

The 16 New Defendants

As set forth in the superseding indictment, the 16 newly-indicted defendants are all current or former soccer officials who acted at various times in a fiduciary capacity within FIFA and one or more of its constituent organizations:

CONCACAF Region Officials

Alfredo Hawit: Current FIFA vice president and Executive Committee member and CONCACAF president.  Former CONCACAF vice president and Honduran soccer federation president.
Ariel Alvarado: Current member of the FIFA Disciplinary Committee.  Former CONCACAF Executive Committee member and Panamanian soccer federation president.
Rafael Callejas: Current member of the FIFA Television and Marketing Committee.  Former Honduran soccer federation president and former president of the Republic of Honduras.
Brayan Jiménez: Current Guatemalan soccer federation president and member of the FIFA Committee for Fair Play and Social Responsibility.
Rafael Salguero: Former FIFA Executive Committee member and Guatemalan soccer federation president.
Héctor Trujillo: Current Guatemalan soccer federation general secretary and judge on the Constitutional Court of Guatemala.
Reynaldo Vasquez: Former Salvadoran soccer federation president.
CONMEBOL Region Officials

Juan Ángel Napout: Current FIFA vice president and Executive Committee member and CONMEBOL president.  Former Paraguayan soccer federation president.
Manuel Burga: Current member of the FIFA Development Committee.  Former Peruvian soccer federation president.
Carlos Chávez: Current CONMEBOL treasurer.  Former Bolivian soccer federation president.
Luís Chiriboga: Current Ecuadorian soccer federation president and member of the CONMEBOL Executive Committee.
Marco Polo del Nero: Current president of the Brazilian soccer federation.  Announced resignation from FIFA Executive Committee on Nov. 26, 2015.
Eduardo Deluca: Former CONMEBOL general secretary.
José Luis Meiszner: Current CONMEBOL general secretary.
Romer Osuna: Current member of the FIFA Audit and Compliance Committee.  Former CONMEBOL treasurer.
Ricardo Teixeira: Former Brazilian soccer federation president and FIFA Executive Committee member.
The Convicted Defendants

The following defendants previously pleaded guilty under seal and agreed to forfeit more than $40 million:

On May 26, 2015, Zorana Danis, the co-founder and owner of International Soccer Marketing Inc., a New Jersey-based sports marketing company, waived indictment and pleaded guilty to a two-count information charging her with wire fraud conspiracy and filing false tax returns.  As part of her plea, Danis agreed to forfeit $2 million.

On Nov. 9, 2015, Fabio Tordin, the former CEO of Traffic Sports USA Inc. and currently an executive with Media World LLC, a Miami-based sports marketing company, waived indictment and pleaded guilty to a four-count information charging him with three counts of wire fraud conspiracy and one count of tax evasion.  As part of his plea, Tordin agreed to forfeit more than $600,000.

On Nov. 12, 2015, Luis Bedoya, a member of the FIFA Executive Committee, a CONMEBOL vice president and, until last month, the president of the Federación Colombiana de Fútbol, the Colombian soccer federation, waived indictment and pleaded guilty to a two-count information charging him with racketeering conspiracy and wire fraud conspiracy.  As part of his plea, Bedoya agreed to forfeit all funds on deposit in his Swiss bank account, among other funds.

On Nov. 16, 2015, Alejandro Burzaco, the former general manager and chairman of the board of Torneos y Competencias S.A., an Argentinian sports marketing company, pleaded guilty to racketeering conspiracy, wire fraud conspiracy and money laundering conspiracy.  As part of his plea, Burzaco agreed to forfeit more than $21.6 million.

On Nov. 17, 2015, Roger Huguet, the CEO of Media World and its parent company, waived indictment and pleaded guilty to a three-count information charging him with two counts of wire fraud conspiracy and one count of money laundering conspiracy.  As part of his plea, Huguet agreed to forfeit more than $600,000.

On Nov. 23, 2015, Jeffrey Webb, a former FIFA vice president and Executive Committee member, CONCACAF president, Caribbean Football Union Executive Committee member and Cayman Islands Football Association president, pleaded guilty to racketeering conspiracy, three counts of wire fraud conspiracy and three counts of money laundering conspiracy.  As part of his plea, Webb agreed to forfeit more than $6.7 million.

On Nov. 23, 2015, Sergio Jadue, a vice president of CONMEBOL and, until last month, the president of the Asociación Nacional de Fútbol Profesional de Chile, the Chilean soccer federation, waived indictment and pleaded guilty to a two-count information charging him with racketeering conspiracy and wire fraud conspiracy.  As part of his plea, Jadue agreed to forfeit all funds on deposit in his U.S. bank account, among other funds.

On Nov. 25, 2015, José Margulies, the controlling principal of Valente Corp. and Somerton Ltd, who served as an intermediary who facilitated illicit payments between sports marketing executives and soccer officials, pleaded guilty to racketeering conspiracy, wire fraud conspiracy, and two counts of money laundering conspiracy.  As part of his plea, Margulies agreed to forfeit more than $9.2 million.

As previously announced last May, all money forfeited by the defendants is being held in reserve to ensure its availability to satisfy any order of restitution entered at sentencing for the benefit of any individuals or entities that qualify as victims of the defendants’ crimes under federal law.

* * * *

The indicted and convicted defendants face maximum terms of incarceration of 20 years for the Racketeer Influenced and Corrupt Organizations Act (RICO) conspiracy, wire fraud conspiracy, wire fraud, money laundering conspiracy, money laundering and obstruction of justice charges.  In addition, Tordin and Danis face maximum terms of five and three years in prison, respectively, for the tax charges.  Each defendant also faces mandatory restitution, forfeiture and a fine.

The superseding indictment and guilty pleas unsealed today are assigned to the U.S. District Judge Raymond J. Dearie of the Eastern District of New York.

The government’s investigation is ongoing.

The charges and guilty pleas announced today are part of an investigation into corruption in international soccer being led by the U.S. Attorney’s Office of the Eastern District of New York, the FBI’s New York Field Office and the IRS-CI Los Angeles Field Office.  The work in the U.S. Attorney’s Office involves prosecutors from the National Security and Cybercrime Section, the Organized Crime and Gang Section, the Business and Securities Fraud Section and the Public Integrity Section.  The prosecutors in Brooklyn are receiving considerable assistance from attorneys in various parts of the Justice Department’s Criminal Division in Washington, D.C., including the Office of International Affairs, the Organized Crime and Gang Section, the Asset Forfeiture and Money Laundering Section and the Fraud Section, as well as from INTERPOL Washington.

The charges and guilty pleas announced today are being prosecuted by Assistant U.S. Attorneys Evan M. Norris, Amanda Hector, Darren A. LaVerne, Samuel P. Nitze, M. Kristin Mace, Paul Tuchmann, Keith D. Edelman, Tanya Hajjar and Brian D. Morris of the Eastern District of New York.

U.S. SEEKS MILLIONS STEMMING FROM CORRUPTION IN THE PHILIPPINES

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, July 14, 2015

U.S. Seeks to Recover $12.5 Million Obtained from High-Level Corruption in the Philippines

The Department of Justice filed a civil forfeiture complaint today seeking to recover approximately $12.5 million in assets found in the United States that derive from bribery and kickback schemes in the Philippines spanning nearly a decade.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Assistant Director in Charge David Bowdich of the FBI’s Los Angeles Field Office made the announcement.

“Over nearly a decade, Janet Napoles allegedly stole millions of dollars in funds entrusted to her for development assistance and disaster relief for the people of the Philippines,” said Assistant Attorney General Caldwell.  “In an effort to disguise and enjoy her ill-gotten gains, Napoles purchased properties and other assets in the United States for herself and her family members, including a condominium at the Ritz and a Porsche.  The Justice Department will not allow the United States to become a playground for the corrupt or a place to hide and invest stolen riches.”

“The FBI is committed to ensuring that the U.S. financial system is not used to launder the proceeds of foreign bribery schemes,” said Assistant Director in Charge Bowdich.  “Nor is the United States a safe haven for the fruits of corruption.”

As alleged in the complaint, from approximately 2004 to 2012, Philippine businesswoman Janet Napoles, 51, paid tens of millions of dollars in bribes and kickbacks to Philippine politicians and other government officials in exchange for over $200 million in funding for purported development assistance and disaster relief.  Napoles’ non-governmental organizations (NGOs), however, then either failed to provide, or under-delivered on, the promised support.  The complaint further alleges that Napoles also diverted NGO funds for her own personal use and benefit, often draining accounts within days of government disbursements.  For this conduct, the Philippines’ Office of the Ombudsman has charged Napoles, two of her children and numerous current and former Philippine politicians and other government officials in connection with what has been nicknamed the “pork barrel scam.”

The complaint alleges that Napoles transferred over $12 million in Philippine government-awarded funds to bank accounts in the United States in the names of, or controlled by, her family members.  According the complaint, Napoles used the money to purchase numerous assets, including a condominium at the Ritz-Carlton in Los Angeles for her 21-year-old daughter.  The complaint seeks to forfeit the proceeds from the sale of the Los Angeles condominium, along with several other assets, including a motel near Disneyland in Anaheim, California; properties in Covina and Irvine, California; a 19 percent stake in a California-based consulting company; and a Porsche Boxster that was purchased for another daughter.

Napoles is currently serving a sentence of life in prison in the Philippines for her role in the kidnapping and detention of her cousin, Benhur Luy, who served as Napoles’s finance officer and tracked her schemes.

The complaint was brought under the Kleptocracy Asset Recovery Initiative, in which a team of dedicated prosecutors in the Criminal Division’s Asset Forfeiture and Money Laundering Section work in partnership with federal law enforcement agencies to forfeit the proceeds of foreign official corruption and, where appropriate, return those proceeds to benefit the people harmed by these acts of corruption and abuse of office.  Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to kleptocracy@usdoj.govEmail links icon.

The investigation was conducted by the FBI’s Los Angeles Field Office.  The case is being handled by Trial Attorney Alexis J. Loeb of the Criminal Division’s Asset Forfeiture and Money Laundering Section, with substantial support from the U.S. Attorney’s Office of the Central District of California, the U.S. Marshals Service and the Criminal Division’s Office of International Affairs.  The Justice Department also thanks the Philippines’ Office of the Ombudsman, Anti-Money Laundering Council, National Bureau of Investigation and Department of Justice for their cooperation in this matter.

AG LYNCH'S PRESS CONFERENCE ANNOUNCING CHARGES AGAINST FIFA OFFICIALS AND CORPORATE EXECUTIVES

FROM:  U.S. JUSTICE DEPARTMENT

Attorney General Loretta E. Lynch Delivers Remarks at Press Conference Announcing Charges Against Nine FIFA Officials and Five Corporate Executives

Brooklyn, NYUnited States ~ Wednesday, May 27, 2015

Good morning and thank you all for being here.  Before we begin, I want to quickly comment on the situation regarding FISA.  As Attorney General, I am deeply committed to ensuring that this nation protects the civil liberties of every American while also keeping our country safe and secure.  Unfortunately, some of the vital and uncontroversial tools we use to combat terrorism and crime are scheduled to shut down on Sunday.  The House of Representatives has passed a bipartisan bill, called the USA Freedom Act, that would extend these tools while addressing important and valid concerns about other aspects of the government’s ability to protect data – but without action from the U.S. Senate, we will experience a serious lapse in our ability to protect the American people.  I join the President in urging the U.S. Senate to work through the current recess in order to make sure that we can continue to appropriately safeguard this country and protect its citizens.

I am joined today by Acting U.S. Attorney [Kelly] Currie of the Eastern District of New York, Director [James] Comey of the FBI and Chief of Investigation [Richard] Weber of the IRS’s Criminal Investigation Division.  We are here to announce the unsealing of charges and the arrests of individuals as part of our long-running investigation into bribery and corruption in the world of organized soccer.

Many of the individuals and organizations we will describe today were entrusted with keeping soccer open and accessible to all.  They held important responsibilities at every level, from building soccer fields for children in developing countries to organizing the World Cup.  They were expected to uphold the rules that keep soccer honest, and protect the integrity of the game.  Instead, they corrupted the business of worldwide soccer to serve their interests and enrich themselves.  This Department of Justice is determined to end these practices; to root out corruption; and to bring wrongdoers to justice.

The 14 defendants charged in the indictment we are unsealing today include high-ranking officials of FIFA, the international organization responsible for regulating and promoting soccer; leaders of regional and other governing bodies under the FIFA umbrella; and sports marketing executives who, according to the indictment, paid millions of dollars in bribes and kickbacks to obtain lucrative media and marketing rights to international soccer tournaments.  The 47-count indictment against these individuals includes charges of racketeering, wire fraud and money laundering conspiracies spanning two decades.

FIFA and the regional bodies under its umbrella make money, in part, by selling commercial rights to their soccer tournaments to sports marketing companies, often through multi-year contracts covering multiple editions of the tournaments.  The sports marketing companies, in turn, sell those rights downstream to TV and radio broadcast networks, major corporate sponsors and other entities for significant sums of money.

Beginning in 1991, two generations of soccer officials, including the then-presidents of two regional soccer confederations under FIFA – the Confederation of North, Central American and Caribbean Association Football, known as CONCACAF, which includes the United States, and the South American Football Confederation, or CONMEBOL, which represents organized soccer in South America – used their positions of trust within their respective organizations to solicit bribes from sports marketers in exchange for the commercial rights to their soccer tournaments.  They did this over and over, year after year, tournament after tournament.

For instance, in 2016, the United States is scheduled to host the centennial edition of the Copa America – the first time that tournament will be held in cities outside South America.  Our investigation revealed that what should be an expression of international sportsmanship was used as a vehicle in a broader scheme to line executives’ pockets with bribes totaling $110 million – nearly a third of the legitimate costs of the rights to the tournaments involved.

The criminal activity we have identified did not solely involve sports marketing.  Around 2004, bidding began for the opportunity to host the 2010 World Cup, which was ultimately awarded to South Africa – the first time the tournament would be held on the African continent.  But even for this historic event, FIFA executives and others corrupted the process by using bribes to influence the hosting decision.  The indictment also alleges that corruption and bribery extended to the 2011 FIFA presidential election, and to agreements regarding sponsorship of the Brazilian national soccer team by a major U.S. sportswear company.

In short, these individuals and organizations engaged in bribery to decide who would televise games; where the games would be held; and who would run the organization overseeing organized soccer worldwide.  While at least one FIFA executive served as CONCACAF president without pay, there was little altruism involved, as he alone is alleged to have taken more than $10 million in bribes over a 19-year period and amassed a personal fortune from his ill-gotten gains.  In many instances, defendants and their co-conspirators planned aspects of their scheme during meetings held here in the United States; they used the banking and wire facilities of the United States to distribute bribe payments; and they planned to profit from their scheme in large part through promotional efforts directed at the growing U.S. market for soccer.

In addition to the indictment, we are also unsealing today the charging instruments of four individual and two corporate defendants who have already pleaded guilty to their involvement in racketeering activity and other criminal conduct.  Among these defendants are a U.S. sports marketing company, a Brazilian sports marketing executive, and a U.S. citizen who, in addition to being the former general secretary of CONCACAF and a member of the FIFA executive committee, was a beneficiary of the 2010 World Cup bribery scheme.  All told, these defendants have agreed to forfeit over $150 million in illegal profits they have made from these crimes.

Finally, we are also announcing that agents this morning have begun executing a search warrant at CONCACAF headquarters in Miami, Florida.  CONCACAF is plainly an organization in crisis, and we have already reached out to its representatives this morning to ensure that the people of integrity who work there know that we stand ready to work with them to reform their practices in the wake of the actions we are taking today.

Earlier today, Swiss authorities in Zurich arrested seven of the defendants charged in the indictment, including the current president of CONCACAF.  We are also seeking additional defendants.  All of these defendants abused the U.S. financial system and violated U.S. law, and we intend to hold them accountable.  Going forward, we welcome the opportunity to work with our partners around the world to bring additional co-conspirators and other corrupt individuals to justice.

Today’s action is a testament to the tireless efforts of federal prosecutors here in the Eastern District of New York, as well as the New York Field Office of the FBI and the Los Angeles Field Office of the IRS’s Criminal Investigation Division.  I want to thank all of the agents, prosecutors, law enforcement officials and analysts who contributed their time and talents to this extensive investigation.  I want to recognize Acting U.S. Attorney Kelly Currie for his leadership of this U.S. Attorney’s Office.  I want to express my appreciation for the cooperation and assistance we received from our international partners – particularly the Swiss authorities.  And I want to make clear that the defendants arrested in Zurich have the right to a fair and impartial extradition process, and they will receive a fair trial if they are extradited to this country.

At this time, I’d like to introduce Acting U.S. Attorney [Kelly] Currie, who will provide additional details on today’s announcement.

U.S. OFFICILS REMARKS AT THE GOOD SOCIETY AND CORRUPTION CONFERENCE

FROM:  U.S. STATE DEPARTMENT 

Remarks at the Good Society and Corruption Conference

Remarks

Hoyt Yee

Deputy Assistant Secretary, Bureau of European and Eurasian Affairs

Bucharest, Romania

September 9, 2014

---

As prepared

I would like to thank the Aspen Institute Romania—and particularly Mircea Geoana—for organizing this impressive gathering of policy-makers, business leaders, thinkers, activists and citizens. In unique formats like this that convene all of society’s stakeholders, we can tackle some of the Euro-Atlantic community’s most complex and intractable challenges.

Corruption is one of these challenges. Combating corruption is as difficult as it is important. In the United States, we know this from our own history. We fight every day to live up to the immortal words written in our Declaration of Independence that “all men are created equal” and as such, all Americans have the self-evident right to equal protection under the law. These ideals are also at the forefront of Romania’s democracy. Romania’s constitution opens with the declaration that this country is “governed by the rule of law, in which human dignity, citizens' rights and freedoms, the free development of human personality, justice and political pluralism represent supreme values…” These democratic values—preserving and defending rule of law, protecting the right to free media, guaranteeing an independent judiciary and providing a clean, accountable and transparent government—are the basis of our Euro-Atlantic community.

Both Americans and Europeans know the corrosive effects that corruption can have on the ability to deliver the prosperity, security and liberty that our citizens deserve. In Central and Eastern Europe and the Balkans—where so much progress has been made in the last 25 years to shore up these common values—corruption remains one of the top obstacles to reaching our dream of completing a Europe whole, free and at peace.

The reasons are simple. Corruption undermines economies, erodes democracies, and threatens security throughout the region. It drains away public resources at a time when every penny is needed to shore up Europe’s economic recovery. Every Euro, Forint, or Leu that is diverted for personal enrichment is one that is not used to help fund hospitals, improve schools, and build roads. Citizens who witness corruption lost faith in their leaders and government. Tax evasion rises. Foreign direct investment is decreases. And many of the most able-bodied and highly-educated workers—doctors, engineers, and scientists—emigrate abroad where their talents are rewarded instead of squandered. Economic growth stagnates or declines. The victims who suffer the most are the most vulnerable. The effects and influence of corruption are so dangerous to economic prosperity that the World Bank has labeled corruption “public enemy number one.”

Now more than ever, we see how corruption threatens not only the economy but security and sovereignty as well. At its worst, corruption hollows out military and border services; allows malevolent coalitions to build across borders in ways that undermine democracy; and enables criminals and hostile states to infiltrate and control strategically important sectors like energy. Today, in view of the crisis in Ukraine, the urgency could not be greater.

So we must ask ourselves: How can we marshal the full force of society, of this unique group of stakeholders—governments, the business community, civil society, the media—in this fight? How can we work together across Europe and Eurasia to root out corruption wherever it hides?

There is no “one size fits all” solution to tackle corruption across the Euro-Atlantic. But one thing is certain: the battle against corruption requires determination of all members of society—from the energy company CEO to the Member of Parliament to the police officer patrolling the night streets. The fight against corruption must rise up locally, build capacity and include citizen “buy-in.” All actors in society must focus on fundamental principles like transparency, rule of law, stable institutions, and efficient courts to enforce democratically promulgated rules. Governments, civil society, business and the media must remain vigilant responsible authorities, including police, prosecutors, and judges implement the law effectively, aggressively and impartially and enforce the principle that no one is above the law.

Our host today, Romania is a good example of a country where the development of strong, independent and impartial judicial institutions, especially organizations like the National Anti-Corruption Directorate, the Supreme Court and the National Integrity Agency, are having a strong, positive effect on rule of law. These institutions have been remarkable in their efforts and need to continue to be resourced, respected, and insulated from outside influence. Romania is poised to advance even further, as it considers ways to ensure full accountability of its elected and government officials and improves the transparency of its legislative procedures—something we are helping with through initiatives like yesterday's Regulatory Impact Assessment Workshop, which the U.S. Government organized supported with the Romanian Government.

The United States stands ready to partner with those in Europe and Eurasia looking to strengthen public institutions, bolster rule of law, and improve the quality of governance. We are identifying the most damaging forms of corruption across the region and the best weapons to fight them. By doing this, we can establish best practices and apply them where corruption festers. Across the region, the United States is working to bring together coalitions of like-minded actors from business, civil society and leaders from the next generation. We are offering legal and technical assistance best suited to local conditions. And we are raising expectations and testing governments that their commitments to clean governance aren’t just about words, but actions.

Looking regionally, we are supporting initiatives like the South Eastern European Law Enforcement Center (SELEC) here in Bucharest and OECD Anti-Corruption Network for Eastern Europe and Central Asia, and the CEELI Institute’s Judicial Integrity Network to provide training and build networks among practitioners and enhance coordination. We are championing the Open Government Partnership and the Extractive Industries Transparency Initiative; and advocating that all European states fully implement the UN’s Convention against Corruption.

The United States and the EU are also working together to tackle this transnational challenge. Both sides of the Atlantic have done much. We’ve passed legislation to compel companies to publicly disclose the payments they make to governments in extractive industries such as oil, gas, and minerals, sectors that are particularly vulnerable to corruption. We are working to guarantee that our aid and technical assistance programs in places like Ukraine, Moldova, Georgia and the Balkans emphasize public accountability and responsiveness. We have collaborated closely to build the international architecture to recover proceeds of corruption that kleptocrats stow abroad, through initiatives such as the Ukraine Forum on Asset Recovery. But we can do more. For example, we should look at how to use the Transatlantic Trade and Investment Partnership and other trade agreements to promote anti-corruption measures and cleaner governance.

As Vice President Biden stated here in Bucharest a couple of months ago: “In the 21^st century, the countries that will thrive will be the ones where citizens know their voices are heard because the institutions are transparent.” If we empower those fighting for transparency and accountability with the tools and initiatives to take the fight into their own hands; if we dedicate the political will necessary to wage this fight; if we guarantee the highest standard of governance; then I am confident that the countries of this region and beyond can reach their full potential. Together we can open the next chapter of prosperity, security and human dignity for all our citizens. Thank you.

ARMY NATIONAL GUARD CAPTAIN CHARGED IN BRIBERY SCHEME

FROM: U.S. DEPARTMENT OF JUSTICE
Friday, May 17, 2013
Army National Guard Captain Charged for Alleged Role in Bribery and Wire Fraud Scheme and Two Former Soldiers Sentenced for Their Roles in a Related Scheme

To Date, 11 Individuals Have Been Charged in Ongoing Corruption Investigation

A Texas Army National Guard captain has been charged for his alleged role in a bribery and wire fraud scheme and two former soldiers in the Texas Army National Guard were sentenced for their roles in a separate scheme to defraud the National Guard Bureau and its contractor, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.

These cases arose from an investigation concerning allegations that former and current soldiers and military and civilian contract recruiters in the San Antonio and Houston areas engaged in a wide-ranging scheme to obtain fraudulent recruiting referral bonuses. To date, 11 people have been charged in this ongoing investigation, including yesterday’s 17-count indictment of Fabian Barrera, 46, of Schertz, Texas, a Captain in the Army National Guard accused of personally obtaining more than $185,500 in fraudulent recruiting bonuses. Barrera made his initial appearance on May 16, 2013, in the U.S. District Court for the District of Maryland, before U.S. Magistrate Judge Jillyn K. Schulze. The public is reminded that an indictment is merely a charge and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

According to court documents, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker, Inc., to administer the Guard Recruiting Assistance Program (G-RAP), which was designed to offer monetary incentives to soldiers who referred others to join the U.S. military. To participate in the G-RAP, an eligible soldier needed to establish an online recruiting assistant (RA) account. Through these recruiting programs, a participating soldier could receive up to $3,000 in bonus payments for every person he or she referred to serve in the U.S. military.

Barrera, an RA in the G-RAP between approximately December 2005 and February 2012, is alleged to have paid Army National Guard recruiters for the names and Social Security numbers of potential soldiers and used this information to claim that he was responsible for referring dozens of potential soldiers to join the military, though he allegedly did not recruit any of those people. As a result, Barrera is accused of receiving more than approximately $185,000 in fraudulent recruiting bonuses, and the indictment alleges that Barrera paid various recruiters in the form of checks and cash payments.

Former Staff Sergeant Jermaine Britt, 39, of Richmond, Texas, was sentenced today to 30 months in prison by Chief U.S. District Judge Biery for his role in obtaining $86,500 in fraudulent bonus payments. According to court documents, Britt served as a recruiter in the Houston area from approximately November 2006 until November 2012. He conspired with former Specialist Stephanie Heller, 37, of Wharton, Texas, who was an RA in the G-RAP and claimed approximately $44,500 in fraudulent bonuses through her account. Heller made approximately $19,750 in bribe payments to Britt, who served as a recruiter in the Houston area from approximately November 2006 until November 2012. Heller also made a $1,000 bribe payment to another recruiter in exchange for Britt and that recruiter providing the personal information of potential soldiers. In addition to accepting bribes from Heller, Britt worked with at least two other RAs to claim fraudulent bonus payments and accepted a total of $23,750 in bribe payments in exchange for providing the personal information of potential soldiers.

Britt also admitted that he obstructed justice by coaching Heller to make false statements to federal agents. In September of 2012, Heller recorded two conversations with Britt. In those conversations, Britt told Heller how she could provide false stories to federal agents to innocently explain incriminating conduct, such as large cash withdrawals from her bank account, her receipt of emails from Britt in which Britt provided the personal identifiers of potential soldiers, and her use of Britt’s military computer to make referrals under her RA account.

Britt pleaded guilty to conspiracy to commit bribery and wire fraud, bribery, and obstruction of justice on Nov. 9, 2012. Heller pleaded guilty to conspiracy to commit bribery and wire fraud and bribery on Oct. 4, 2012. Heller was also sentenced today to five years’ probation, and her cooperation was instrumental in the case against Britt.

These cases are being prosecuted by Trial Attorneys Edward J. Loya Jr., Brian A. Lichter, and Sean F. Mulryne of the Criminal Division’s Public Integrity Section. These cases are being investigated by agents from the San Antonio Fraud Resident Agency of the Major Procurement Fraud Unit, U.S. Army CID, and from the San Antonio Field Office of the Internal Revenue Service Criminal Investigation.