J&F Investimentos, the parent company of Brazilian meatpacker JBS, has pleaded guilty to US foreign bribery charges, agreeing to pay $128.25 million in criminal fines to settle the case.
J&F pleaded guilty to violating the U.S. Foreign Corrupt Practices Act in a federal court on Wednesday, following its role in a corruption scandal which saw officials at the Brazilian company bribe more than 1,900 Brazilian politicians to secure favourable business deals and financing from state-run banks to aid the expansion of subsidiaries such as JBS.
Under the terms of Wednesday’s agreement, the US Justice Department imposed a total penalty of $256.5 million on J&F, but ordered it to pay only half of that sum to US authorities to compensate for fines already paid to Brazilian authorities.
In 2017, the owners of J&F Investimentos, Joesley and Wesley Batista, confessed in a plea bargain deal that they had paid out millions of reais in bribes to Brazilian politicians. As a result of the deal, J&F Investimentos was ordered to pay a $3.2 billion fine within 25 years.
The US federal court heard on Wednesday that, between 2005 and 2014, J&F made approximately $174.6 million in corrupt payments to high-level Brazilian government officials; to executives at state-run banks Banco Nacional de Desenvolvimento Econômico e Social (BNDES) and Caixa Econômica Federal (Caixa); and to an executive of Fundação Petrobras de Seguridade Social (Petros), a Brazilian state-controlled pension fund.
According to the court, J&F executives used New York-based bank accounts to facilitate the bribery scheme and to make corrupt payments; purchased and transferred a Manhattan apartment as a bribe; and met in the US to discuss and further aspects of the scheme.
As part of the plea agreement, for the next three years, J&F will continue to cooperate with the US government in any ongoing or future criminal investigations concerning J&F, its executives, employees, or agents; enhance its compliance program; and report to the government on the implementation of its enhanced compliance program.
Acting assistant attorney general Brian C. Rabbitt of the Justice Department’s Criminal Division, said: “With today’s guilty plea, J&F has admitted to engaging in a long-running scheme to bribe corrupt officials in Brazil to obtain financing and other benefits for the company.
“As part of this scheme, executives at the very highest levels of the company used US banks and real estate to pay tens of millions of dollars in bribes to corrupt government officials in Brazil in order to obtain hundreds of millions of dollars in financing for the company and its affiliates.
“Today’s resolution demonstrates the department’s continuing commitment to combating international corruption and holding companies accountable for violations of the FCPA.”
While JBS itself was not part of Wednesday’s plea agreement and will not bear any liabilities from the case, JBS and controlling shareholders did agree to pay $27 million to the Securities and Exchange Commission. The Wall Street Journal alleges that the payment relates to violations of US securities law by JBS-owned poultry company Pilgrim’s Pride.
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