Gunvor S.A. Pleads Guilty to Scheme to Bribe Ecuadorian Officials and Ordered to Pay Over $600 Million in Criminal Penalties

Today, in federal court in Brooklyn, Gunvor S.A. (Gunvor), a part of the Gunvor Group, one of the largest commodities trading firms in the world, pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA).  The charge arises out of a scheme to bribe officials of the Ecuadorian Ministry of Hydrocarbons and Petroecuador, the Ecuadorian state-owned oil company, in order to obtain contracts to purchase oil products.  The proceeding was held before United States District Judge Eric N. Vitaliano.  As part of the company’s sentence, Gunvor was ordered to pay a criminal penalty of approximately $661 million. 

Breon Peace, United States Attorney for the Eastern District of New York, Brent S. Wible, Acting Senior Counselor of the Justice Department’s Criminal Division, and Jeffrey B. Veltri, Special Agent-in-Charge, Federal Bureau of Investigation, Miami Field Office (FBI), announced the guilty plea and sentence.    

“Today’s guilty plea and sentencing marks yet another example of this office’s efforts to combat widespread corruption,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Corruption erodes the public’s trust in their government, prevents government officials from acting in the best interests of the people they represent and harms businesses that play by the rules, driving up prices for consumers. The Justice Department, including my Office, will not tolerate bribes being paid by American companies or foreign companies misusing the U.S. financial system.”

“Over nearly a decade, Gunvor representatives bribed high-level government officials at Ecuador’s state-owned oil company to enter into business transactions with other state-owned entities that ultimately benefited Gunvor. As a result of this complex bribery scheme, Gunvor obtained hundreds of millions of dollars in illicit profits,” said Acting Senior Counselor Wible. “Foreign bribery emboldens corrupt officials and undermines the rule of law. Gunvor’s guilty plea demonstrates that the Criminal Division remains resolute in our efforts to root out bribery and official corruption. We will continue to hold both corporations and individuals who bribe foreign officials to account, in coordination with our international partners.”

“Gunvor’s years long bribery scheme involving high-level Ecuadoran officials was both detrimental to the business environment and eroded the public’s trust and confidence in their government,” stated FBI Special Agent-in-Charge Veltri. “This guilty plea and significant fine would not have been possible without significant cooperation from our international partners in the Cayman Islands, Colombia, Curacao, Ecuador, Panama, Portugal, Singapore, and Switzerland. This truly was an international effort.”

In connection with the resolution, Gunvor entered into a plea agreement with the government and pleaded guilty to an information charging the company with conspiracy to violate the anti-bribery provisions of the FCPA.  Following the plea, Judge Vitaliano sentenced Gunvor to pay a criminal monetary penalty of more than $374 million and to forfeit more than $287 million in ill-gotten gains.  The sentence includes credits of up to $93 million each for amounts Gunvor pays to resolve investigations by Swiss and Ecuadorian authorities into the same misconduct so long as the payments are made within 12 months of today’s date.   

According to the company’s admissions and court documents, between 2012 and 2020, Gunvor and its co-conspirators paid more than $97 million to intermediaries understanding that some of the money would be and in fact was used to bribe numerous Ecuadorian officials, including Nilsen Arias, a then-high ranking official at Petroecuador.  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.  A Gunvor employee directed one of the intermediaries to use the bribe money to purchase an 18-karat gold Patek Philippe wristwatch for Arias.   

In exchange for these bribe payments, high-level Ecuadorian officials helped Gunvor win contracts to provide a series of oil-backed loans to Petroecuador.  The oil-backed loans were made through other state-owned entities, which acted as “fronts” for Gunvor.  Because the contracts were with other state-owned entities, Petroecuador rules did not require a competitive bidding process, allowing Gunvor and co-conspirators to obtain contracts it would not have been able to obtain directly.  Gunvor also received confidential Petroecaudor information. 

In total, Gunvor earned more than $384 million in profits from the business it corruptly obtained related to Petroecuador. 

The department reached this resolution with Gunvor based on a number of factors including the nature and seriousness of the offense, which involved a multi-year scheme to bribe numerous senior Ecuadorian government officials in order to obtain lucrative business resulting in more than $384 million in profits to Gunvor; and that Gunvor has a history of misconduct.  In October 2019, Gunvor reached a resolution with the Office of the Attorney General of Switzerland concerning a corrupt scheme to bribe officials in Congo-Brazzaville and Côte d’Ivoire to secure oil contracts. The conduct that is the subject of today’s guilty plea occurred, in part, at the same time as the prior Swiss investigation and resolution.  Accordingly, taking into account these and other factors, including Gunvor’s cooperation and remediation, the total criminal penalty reflects a 25% reduction off the 30th percentile of the applicable U.S. sentencing guidelines fine range.

The department previously secured convictions in the Eastern District of New York of four individuals who were implicated in Gunvor’s bribery scheme, including:

• Antonio Pere Ycaza, a former consultant for Gunvor, pleaded guilty on Oct. 7, 2020, to one count of conspiracy to violate the FCPA and one count of conspiracy to commit money laundering.
• Enrique Pere Ycaza, a former consultant for Gunvor, also pleaded guilty on Oct. 7, 2020, to one count of conspiracy to commit money laundering and to violate the FCPA.
• Raymond Kohut, a former Gunvor employee and agent, pleaded guilty on April 6, 2021, to one count of conspiracy to commit money laundering.
• Nilsen Arias Sandoval, a former senior Petroecuador official, pleaded guilty on Jan. 19, 2022, to one count of conspiracy to commit money laundering.

The investigation was conducted by FBI Miami’s International Corruption Squad.  The government’s case is being handled by the Business and Securities Fraud Section of the United States Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section and the Money Laundering and Asset Recovery Section (MLARS) Special Financial Investigations Unit.  Assistant United States Attorneys Jonathan P. Lax, Nick M. Axelrod and Matthew R. Galeotti of the Eastern District of New York are prosecuting the case with Assistant Chiefs Derek J. Ettinger and Jonathan P. Robell and Trial Attorney Clayton P. Solomon of the Fraud Section, Deputy Chief Adam J. Schwartz and Trial Attorney D. Hunter Smith of MLARS. Assistant United States Attorneys Laura Mantell and Brendan King of the Eastern District of New York’s Asset Recovery Section are handling forfeiture matters.

The Justice Department’s Office of International Affairs and authorities in the Cayman Islands, Colombia, Curacao, Ecuador, Panama Portugal, Singapore and Switzerland provided valuable assistance in this matter. 

The Defendant:

GUNVOR S.A.
Switzerland

E.D.N.Y. Docket No. 24-CR-85 (ENV)