Former employee of multinational telecommunications company indicted for FCPA and money laundering related charges

On September 8, 2021, the US District Court for the Southern District of New York unsealed a federal indictment of Afework Bereket, a former employee of a subsidiary of Stockholm-based multinational telecommunications company Telefonaktiebolaget LM Ericsson, in connection with his role in a scheme to bribe high-ranking officials in the Republic of Djibouti in an effort to obtain and retain a €20.3 million contract with Djibouti’s state-owned telecommunications company.  Bereket, who remains at large, was charged by federal prosecutors with conspiracy to violate the Foreign Corrupt Practices Act and conspiracy to commit money laundering for his role in the $2.1 million bribery scheme.  

According to court documents, between 2010 and 2014 Bereket, a dual citizen of Ethiopia and Sweden, was employed by Ericsson Egypt Ltd. and, for much of that time, worked “on a long-term assignment with a branch” of Ericsson AB in Africa.  The indictment describes Ericsson AB as a wholly owned subsidiary of LM Ericsson, and the indictment further states that Ericsson AB was not a “separate and independent entity” apart from LM Ericsson but rather functionally served as a “division or office of LM Ericsson.”  As such, the indictment describes Bereket as an agent of an issuer (LM Ericsson).  
 
With respect to the alleged improper conduct, the indictment states that in order to conceal improper payments made to two high-ranking Djibouti officials, Bereket caused Ericsson to enter into sham contracts with a consulting company—a company that was allegedly owned by the spouse of one of the bribed Djibouti officials—and approved the payment of fake invoices with funds that were processed to and through US bank accounts.

Bereket’s indictment in June 2020 came roughly six months after LM Ericsson entered into a deferred prosecution agreement with the US Department of Justice to resolve charges of violating the anti-bribery, books and records, and internal controls provisions of the FCPA for the company’s participation in a scheme involving tens of millions of dollars in improper payments made to officials in five countries, including Djibouti, between 2010 and 2016.  As part of that settlement, and a concurrent settlement with the Securities and Exchange Commission, LM Ericsson paid over $1 billion in penalties to the DOJ and SEC.  Also as part of the DOJ settlement, Ericsson subsidiary Ericsson Egypt pled guilty to conspiracy to violate the anti-bribery provisions of the FCPA.

Department of Justice Press Release | Unsealed Indictment | Department of Justice Press Release (2019)

 
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