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Odebrecht Corruption and Fraud Investigations / Prosecutions

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Tocumen Airport following construction money trail

The $880 million Terminal 65% complete

AS DETAILS of  Odebrecht  corruption continue to rock Panamanian society, eyes have turned on the Tocumen International Airport expansion.

Governent  officials have started requesting monthly reports on payments made by Odebrecht to subcontractors in the project to build a new terminal.

Tocumen S.A., the entity that oversees the airport, said it wants to ensure that the funds paid monthly to Odebrecht project are used for the execution of the work, which is 65 percent complete.

So far the firm has been paid $642 million of the $880 million final cost.

These are at least 25 subcontractors used by Odebrecht on the project.

Joseph Fidanque III, director  of Tocumen, S.A., said that the monthly report to be submitted by

Odebrecht needs to be accompanied by a letter from the contractors who received the payments.


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Banker named in briberyprobe

Juan Antonio Niño

A  PANAMA  businessman whose reinsurance company  showed  an extraordinary growth in revenue from $5.8 million in 2008 to $124 million in 2015, has joined the fast growing list of those said linked  to the Odebrecht bribery  scandal.

La Prensa reports that a Panamanian company called Active Capital Holding, headed by banker Juan Antonio Niño, sent more than $1.7 million to companies linked to the Odebrecht Group in July and September 2014.

Payments were made to Odebrecht companies Sherkson ($488,457) and Meinl Bank ($1.2 million) in Antigua.

The Public Ministry is investigating the accounts of the Panamanian company, as well as those of Constructora Internacional del Sur,S.A., which had accounts at Multibank and at Credicorp Bank.

Active Capital Holding is the parent company of Active Capital Reinsurance, an insurance company with a significant presence in Ecuador.

Regarding the transaction with Meinl Bank, Niño told La Prensa ­ via text message: “we have no relationship with the [Meinl] bank,” although he acknowledged that the

transaction between his company and the bank was carried out, but said that “such transactions are lawful”


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Frozen bank accounts put Odebrecht staff in limbo

Former Deputy transport Minister Gabriel Garcia has been linked to bribes

ODEBRECHT staff in Colombia are in financial limbo following the freezing  of five bank accounts linked to the Brazilian construction company.

Currently, the company has 73 employees on the payroll whose wages cannot be withdrawn from the banks,reports, Colombian newspaper   El Tiempo.

“The 73 executives that Odebrecht has in Colombia are stranded in the country,” the report said.

The financial situation of Odebrecht’s subsidiaries in Colombia is exacerbated by the fact that, according to the newspaper, over the next three days, a loan obtained from  Banco Agrario de Colombia for $40 million is due.

The problem is that Odebrecht’s subsidiaries do not have any assets in their names, so the collection of the debt will be complex.

The bank is a dependency of the Ministry of Agriculture and Rural Development, so technically the $40 million loan is from the state.

A month ago, the Attorney General of Colombia


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Criminal complaint filed in bribery scandal

Alexis Bethancourt

THE APPOINTMENT of Minister of Public Security Alexis Bethancourt,  to oversee investigations linked to the Odebrecht bribery  scandal was seen as controversial by civil society  and lawyer groups, but on Monday Feb.20 he   went to the Special Anti­Corruption Prosecutor’s Office to file a criminal complaint directed at those who took bribes from the Brazilian construction company

Many observers believe that some of those involved were from the current administration and that Bethancourt was not the man to fill the role.

“We have to defend the state,” said Bethancourt who

represents the state in the proceedings brought by the Public Ministry against Odebrecht.

Last December, the US Department of Justice revealed that between 2010 and 2014, the Brazilian company paid $59 million to senior officials in the government of Panama to secure public works contracts. The amount of bribes is believed to be far higher based on the size of the contracts garnered by Odebrecht.

Bethancourt said that filing the complaint would help the government recover the money.


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Panama looms large in Brazil  bribery revelations


THE ODEBRECHT group, involved in the gigantic corruption plot uncovered at Petrobras, paid $3.37 billion  in bribes between 2006 and 2014, including Panama  according to a statement to Justice  officials by ex director Hilberto Mascarenhas, which was released this week.

The figure, appears in a table, including Panama,  delivered by Mascarenhas to the prosecutors of the Lava Jato operation, who  for more than three years have been investigating the multi-millions  of  deviations that occurred within the state oil company.

Odebrecht, the largest construction company in Brazil, and the biggest single contractor hired by successive Panama adminstrations, spent $1.4 billion on bribes between 2012 and 2013, while in 2014, when the police unveiled the network of corruption, it fell to $450 million.

Mascarenhas, in charge of the notorious  Department of Structured Operations, from which all the bribes  were distributed and recorded, revealed in his testimony that he alerted the company’s former president, Marcelo Odebrecht, to the worrying increase in the amount destined for that illicit purpose.

“Since 2009 I alerted Marcelo (Odebrecht) that the volume of resources was growing brutally,” Mascarenhas recalled in his statement in the framework of a collaboration agreement with Justice, which also involved 76 other ex- directors  of the company.

2009-2014 were the years of the Martinelli administration in Panama when Odebrecht got multi millions for building the Metro, and Cinta Costera 2 and 3.

The policy of bribes, which went from 60 million dollars destined in 2006 and grew progressively to the 730 million dollars of 2012 and 2013, got to be described by Mascarenhas as  “suicide”.

“Financial suicide, suicide risk, suicide of security, suicide of everything,” he said.

According to the investigations, there were workers inside Odebrecht dedicated exclusively to processing the payment of bribes to politicians, among other authorities, who were directly authorized by the heads of the company.

Panama paradise

According to Marcarenhas, the department made payments in two ways: in Brazil they were made in kind or by means of “packages / suitcase of money in predetermined places”, while bank transfers abroad were made in unreported accounts located in financial paradises like Panama.

The testimony of 77 former Odebrecht ex-officials, who were under secrecy, was released a day after the Supreme Court announced on April 11  that it authorized the opening of 76 investigations against almost one hundred privileged politicians cited in the indictments .

In the list of suspects, there are eight executive ministers of President Michel Temer and 12 of the country’s 27 governors, as well as the five former Brazilian presidents: José Sarney (1985-1990), Fernando Collor de Mello (1990-1992), Fernando Henrique Cardoso (1995-2002), Luiz Inácio Lula da Silva (2003-2010) and Dilma Rousseff (2011-2016).

Campaign financing
The stories reveal the illegal financing of campaigns, “favors” in money to “repay” the obtaining of public works or the approval of laws that favored the businesses of the company.


Varela and Santos fingered

However, the payment of bribes was not limited to Brazil and expanded from to  a dozen countries in Latin America – including Brazil – and Africa, according to documents published last December by the United States Department of Justice. 
The scandal has reached important figures in the political landscape of the region, as there is an arrest warrant against Peruvian ex-president Alejandro Toledo, declared a fugitive, and sprinkled with the Peruvian ex-president  Ollanta Humala and the current rulers of Panama, Juan Carlos Varela, and Colombia, Juan Manuel Santos, among others.

In addition to apologizing publicly, Odebrecht announced last December the signing of agreements for which it pledged to pay fines of 6,959.4 million reais (about $ 2.2 billion) to the governments of the United States, Brazil and Switzerland to offset the Illegal acts for which you are being investigated


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Oderbrecht fines match Panama contracts

The jail holding former Odebrecht execurives

THE ODEBRECHT  construction company has been hit with an order to pay $2.6 billion in fines after admitting that it bribed officials around the world, including Panama , to gain contracts.

The amount of the fine ordered by a US judge is close to the e size of the contracts handed to Odebrecht by three successive Panama administrations, Torrijos, Martinelli and Varela.


Ricardo Martinelli and his sons Enrique and Ricardo. All three have fled Panama

Investigations are underway into many former high rollers, alleged to have pocketed Odebrecht “coima, ” with Interpol red alerts in place for several, including the two sons of ex-president Ricardo Martinelli.

Odebrecht, the largest construction company in Latin America, pleaded guilty in the United States Dec. 21, admitting that it had engaged in a “massive” scheme of bribes and fraudulent tenders dating back to at least 2001. and admitted to making secret payments of about $788 million to foreign government officials, their representatives and political parties in several countries, including Panama.

Odebrecht is expected to pay $2.39 billion to Brazil, $93 million to the United States and $116 million to Switzerland.

US District Judge Raymond Dearie said he agreed with prosecutors that although Odebrecht had agreed in December to pay a fine of $4.5 billion, it is only able to pay $2.6 billion.

Highest fine
Even so, it is the highest fine imposed in the world in a bribery case. William Burck, Odebrecht’s lawyer, declined to comment.

In addition to the fines, the company agreed to have a monitor for three years to ensure compliance.

A subsidiary of Odebrecht, the petrochemical company Braskem, also pleaded guilty in December. Braskem was fined $632 million in January.

The two companies were accused of bribing officials of Petrobras to obtain contracts.

The cases mark the first resolution in the United States of charges related to the Lava Jato investigation which has fingered Panama banks as conduits for bribes.

US prosecutors said that in 2006, Odebrecht had a “Structured Operations Division,” which

reported to the company’s highest levels and operated as an “independent bribe department.”

The section made illicit payments using a complex network of fictitious offshore companies to conceal transactions, according to the United States.

51 firings
The company had “inadequate anti corruption controls” and failed to implement corrective measures, the United States said.

Odebrecht fired 51 employees who participated in the scheme.

The company also created the position of chief compliance officer and increased the number of employees who oversee compliance measures.

The Lava Jato investigation, which initially focused on illegal payments made to Petrobras executives, spread to other industries in Brazil, involving construction companies, banks, and shipping companies.


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Odebrecht's Multi Million Dollar Fine

Although the $2.6 billion fine is the highest of its kind in history, it is almost half of what the Brazilian construction company initially agreed with the US Attorney's Office.

Tuesday, April 18, 2017

The fine imposed by a court in the Eastern District of New York puts an end to, at least in US courts, one of the most controversial corruption cases in history, involving the involvement of state officials and companies, businessmen and high ranking politicians. 

See "Odebrecht: An Open Secret" reports that "...The payment order, issued by US District Judge Raymond Dearie in Brooklyn, came after US and Brazilian officials determined after an arbitration agreement in December that Odebrecht could not pay more than that sum.  The company had previously agreed to pay up to $3.5 billion in fines."

See also: "Former President of Odebrecht Convicted"

"... The legal case was filed in the United States after it was determined that some extraterritorial entities were holding and disbursing funds which were owned or operated by people in the US and some meetings related to the scheme of bribery took place in Miami, authorities said."


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