LATAM Filed Information

Transcription

Case 0:16-cr-60195-DTKH Document 1 Entered on FLSD Docket 07/25/2016 Page 1 of DD
14
Jul 25, 2016
U NITED STA TES D ISTRICT CO URT
16-60195-CR-HURLEY/HOPKINS
FOR TH E SOU THERN DISTRICT OF FLO RID A
CA SE NO .
15U.S.C.j78m(b)(2)(A)
15U.S.C.j78m(b)(2)(B)
15U.S.C.j78m(b)(5)
15U-S-C.j78ff(a)
18U.S.C.j2
UNITED STA TES O F AM ERICA
LATAM A IR LINES G R O UP S.A .,
f/k/a LAN A irlineg S.A.
Defendant.
IN FO RM ATIO N
The United Stateschargesthat,atalltim es relevantto thislnform ation, unlessotherwise
speciied:
G ENERAL ALLEG ATIO NS
RelevantStatutorv Backeround
The Foreign CorruptPracticesA ctof 1977,asam ended,Title l5, United States
Code,Sections78dd-1,etseq.(''FCPA''),wasenacted by Congressforthepurposeof,among
othtrthings,m aking itunlawfulto actcorruptly in furtherance ofan offtr, prom ise.
authorization,orpaym entofm oney oranything ofvalue, directly or indirectly,to a foreign
officialforthe purpose ofobtaining orretaining businessfor, ordirecting businessto,any
Person.
Case 0:16-cr-60195-DTKH Document 1 Entered on FLSD Docket 07/25/2016 Page 2 of 14
2.
The FCPA 'Saccounting provisions, am ong otherthings,require thatany issuerof
publiclytradedsecuritiesregisteredpursuantto Section 12(b)oftheSecuritiesExchangeActof
1934,l5U.S.C.j781,orrequiredtofileperiodicreportswiththeUnited StatesSecuritiesand
ExchangeCommission(((SEC'')underSection 15(d)oftheSecuritiesExchangeAct. l5U.S.C.j
78o(d)(hereinafterûtissuer'')makeandkeep books,records,and accountsthataccurately and
fairly retlectthe transactionsand disposition ofthecom pany'sassets, and prohibitthe know ing
and w illfulfalsifcation ofan issuer'sbooks, records,oraccounts. l5U.S.
C.jj78m(b)(2)(A),
78m(b)(5),and78ff(a).
Additionally,the FCPA 'Saccounting provisionsrequire thatissuers maintain a
system ofinternalaccounting controlssufficienttoprovidereasonableassurancesthat:(i)
transactionsare executed in accordance w ith m anagem ent's generalorspecitic authorization'
,(
ii)
transactionsarerecordedasnecessaryto(A)permitpreparationoffinancialstatementsin
conform ity w ith generally accepted accounting principles or any othercriteria applicable to such
statements,and (B)maintain accountability forassets;(iii)accessto assetsispermitted only in
accordancewith management'sgeneralorspecificauthorization;and (iv)therecorded
accountability forassets is com pared w ith the existing assetsatreasonable intervals, and
appropriate action is taken w ith respectto any differcnces. The FCPA also prohibitsthe
know ing and w illfulfailure to im plem entsuch a system ofinternalaccounting controls. l5
U.S.C.jj78m(b)(5)and78ff(a).
IM N and O therRelevantEntities and Individuals
4.
Latam AirlinesGroupsS.A.CCLATAM '')isthesuccessor-in-interesttoLAN
AirlinesS.A.(i'LAN'').LAN was,until2012,an airlinecompany incorporatedand
headquartered in Chile thatprovided passengerand cargo transportation throughoutSouth and
CentralA m erica.asw ellasto the United States, Europe,and A ustralia. Until2012,sharesof
LAN 'Sstocktradedon theNew YorkStockExchange(ûINYSE'')asAmerican depository
receipts((1ADRs''),andLAN wasrequiredto fileperiodicreportswiththe Securitiesand
ExchangeCommission underSection 15(d)oftheSecuritiesExchangeAct, 15U.S.C.978o(d),
and was therefore an issuer. ln June 2012,LAN becam e LATAM afterm erging w ith TAM S.A .
Afterthe merger,LATAM 'Ssharestraded ontheNYSE asADRS, and LA TA M wasrequired to
t5leperiodicreportswith theSecuritiesand Exchange Commission underSection 15(d)ofthe
SecuritiesExchangeAct,15U.S.C.j78o(d).Accordingly.LATAM wasanissuer.LATAM
wasincorporated and headquartered in Chile.
5.
Untilthe 2012 m erger,LAN Cargo w asa subsidiary ofLAN ;thereaûer, itwas a
subsidiary ofLA TAM . LAN Cargo wasincorporated in Chile, headquartered in M iam i,Florida,
and had severalotheroffices in the United States. ltprovided cargo transportation within South
and CentralAm erica,and between South and CentralAm ericaand the restofthe w orld.
6.
Untilthe2012 merger,AtlanticAviation InvestmentsLLC (ééAAl'')wasa
subsidiary ofLAN ;thereafteritw as a subsidiary ofLA TAM . AA Iw as incorporated in
Delaware and headquartered in Chile. AA I's financialstatem entsw ere consolidated into the
financialstatem entsofLAN and laterLA TAM .
7.
E'LAN Executive,''an individualwhose identity isknow n to the United States,
wasa high-levelexecutive atLAN .
8.
étLAN Cargo Executive,''an individualwhose identity isknown to the United
States,w asa high-levelExecutive atLA N Cargo during the relevantperiod. LAN Cargo
Executive w asresponsible,along w ith LA N Executive and otherLA N executives, forleading
LAN 'S entry into the A rgentine airline m arketduring the relevantperiod. LAN Cargo Executive
wasbased in M iam i,Florida,and was a United Statescitizen.
diconsultants''an individualwhose identity is known to the United States, w as an
advisorto the Secretary ofArgentina'sM inistry ofTransportation during the relevantperiod. He
wasappointed to thatposition pursuantto an unpublished resolution.
O verview ofthe Unlaw fulSchem e
IM N 'S Fa/r.y into theA rgentine M arket
10.
LAN soughtentry into the Argentine com m ercialairline m arketin the early
2000s. A tthe tim e,Argentina prohibited foreign-owned airlines from operating in the country,
so LAN looked fora IocalArgentine com pany in w hich itcould acquire a m inority interest.
ln 2004 and 2005,LAN engaged in discussionsw ith governm entofficialsfrom
Argentina'sM inistry ofTransportation abouta variety ofissuessurrounding its entry into the
market,including:(a)which localairlineitcould acquire(the governmenthadto approveits
acquisition);(b)revisingthelaw topermitLAN toownamajorityofthatcompany;(c)granting
LA N additionalroutesw ithin Argentina itcould operate once ithad established operations in the
country;(d)raisingthemaximum allowableticketprices,whichwere setby thegovernment;and
(e)Iaborissuesthataroseafteritenteredthemarket.
12.
By early 2005,LAN had agreed w ith officialsfrom the A rgentine M inistry of
Transportation thatitw ould acquire the defunctArgentine airline,Aero 2000, w hich had no
active operations. A spartofthatagreem ent,LAN also agreed to em ploy the laborforcesfrom
two otherdefunctairlines,LA FSA and Southern W inds. ln return forthatcom m itm ent,
Argentine governm entofficials agreed thatthe officialsw ould revise the law so thatLAN could
ownamajorityoftheairlineithadacquired.wouldraisethecaponmaximum airfares, and
would grantLAN additionaldom estic routes.
How ever,LA N 'Srelationship with the laborunions representing itsinherited
workforcebegandeteriorating during thistimeframe. The tension focused on the so-called iione
function rule,''which m andated thateach em ployee could engage in only one, narrow ly-defined
type ofw ork. Although LAN 'S laborunionsdid notstrictly enforcethe rule in practice, the
unionsthreatened to do so,which w ould have had the effectofsigniGcantly increasing LAN 'S
laborexpenses.
The Fictitious Consultlng Agreem ent
14.
ln Septemberand O ctober2006, LAN negotiatedand executed afictitious$1.l5
m illion consulting agreem entwith Consultant,through a com pany he owned and operated, in
orderto funntlbribesto laborunion officials. A sa resultofthese corruptpaym ents, LAN 'S
unionshad agreed notto enforce the one function rule fora period ofyearsand had accepttd
substantially low erw age increasesthan they had been dem anding.
LAN Cargo Executive negotiated theGctitious agreementw ith Consultanton
behalfof LAN ,w hile keeping LAN Executive inform ed ofthenegotiation'sprogress. On
September23,2006,forexam ple,LAN Cargo Executive sentLAN Executivean em ailw ith the
subjectline'i-ropicclosedforthemoment.'' lnit,LAN CargoExecutiveadvisedLAN
Executivethatkigtlhecostwouldbe1,000plus15?,
4,55withii1/3tobepaid immediately,another
1/3 in 30 and 60 days. IexpectO ct 1l/Nov ll and Dec 1l.''
16.
O n O ctober2,2006,Consultantem ailed LAN Cargo Executive a draftofthe
agreem ent,copying a high-levelofficialin the M inistry ofTransportation. A m ong other
responsibilities,the high-leveloftscialw as involved in LAN 'S negotiationsw ith its laborunions.
The draftagreementbetw een LAN and Consultant'scom pany stated that
Consultant's com pany ddisspecialized and has broad experience in providing advisory serviceson
thesubjectoftransportationintheArgentineRepublicandtheregion ....''Underthetermsof
the draftagreement,the consulting company purportedly wasto:
undertake a study ofexisting airroutesin the Argentine Republic
and the regionalmarket,including those being serviced by
differentairlines,aswellasthosew ith no service available at
present. The study m ustinclude,among otherdata:each ofthe
pointsto be connected by each ofthe routes,possible
com binations,eventualconnections,estim ated passengervolum es
throughoutthe year,especially differentiating weekdays from
weekends,andparticularlythosedominated(sic)aslong
w eekends. This study m ustinclude an estimate ofthe potentialair
cargo dem andsforeach ofthe routes.
Further,the draftagreem entcontem plated thatConsultant'scom pany w ould
perform legalanalysisonLAN'Sbehalf:('gwlithintheframeworkofthelaw governingPublicPrivatePartnerships(PPP)intheArgentineRepublic,(LANJassigns(Consultant'scompany)the
task ofstudying and analyzing said taw and itspotentialapplication to the differentservices
providedby (LANI.''ThedraftagreementgaveConsultant'scompany uptoninetydaysitto
deliverthe study with the requested services.''
19.
ln exchange forthese purported services,the draftagreem entprovided thatLAN
would pay Consultant'scompany %%afixed sum ofUS$ l.150,0003'payable in fourinstallments:
$300,000 on signing;$300,000 atboth thirtyand sixtydaysaftersigning;and theremaining
$250,000 paid ninety daysaftersigning.
6
20.
LA N Cargo Executiveforwarded the draftagreem entto LAN Executive on
October3,2006,the day afterLAN Cargo Executive had received it. LAN Cargo Executive
reached agreem entw ith Consultantand LAN Executive approved iteven though they both knew
thatthe draftagreem ent'sdescription ofthe servicesthatConsultant'scom pany would provide
w ere false. Rather,both understood thatthetrue purpose ofthedraftagreem entwasto use
Consultantto intercede on LAN 'Sbehalfw ith the officials ofitsArgentine laborunions.
Further,LAN Cargo Executive knew and intended thatConsultantw ould use som e ofthem oney
he received underthe draftagreem entto bribe union officialsto acceptterm sm ore favorableto
LAN . LAN Executive also understood thatConsultantm ightpasssom e ofthe m oney he would
bepaid underthe draftagreementto union officials.
2l.
LAN and Consultant's com pany neverfully signed and executed the Gctitious
consulting agreem ent,and neitherthe Consultantnoranyone else affiliated w ith hiscom pany
everperformed any ofthe services specified in the draftagreem ent. Despite the absence ofa
fully executed agreem entand despite the failure ofConsultant'scom pany to perform the services
specified in the draftagreem ent,Consultant's com pany invoiced LAN forpaym entunderthe
draftagreem entand a LAN affiliate paid those invoices.
22.
On October l8,2006,Consultantem ailed LAN Cargo Executive an invoice from
hiscompanytoLAN for$300,000iigtlorconsultingservicesprovidedbyandpayabletoyou
undercontractsigned by both parties.'' Itdirected thatpaymentbem ade to a W achovia account
in Roanoke,V irginia,held in thename ofConsultantand his wife,notin the nam e ofhis
com pany. LAN paid thisinvoice from itsCitibank accountin N ew York,on behalfofAA I,even
though(i)thecontracthadneverbeen signed,(ii)the firstinvoicehad been directedto LAN (not
AAI),(iii)theunsigned agreementhad beenbetween Consultant'scompany and LAN , notA A I,
and(iv)itwasnotacompany bank accountreceivingthefunds LAN Cargo Executive directed
.
Consultantto addressrem aining invoicesto AA I, notLAN .
On N ovem ber2 1,2006,and January 16, 2007,Consultantem ailed two additional
invoicesto LAN Cargo Executive, thefirstfor$300,000and thesecond for$550.000. Both
invoicesw ere addressed to AA I, both directed paymentbe m ade to the sam e V irginia W achovia
accountheld by Consultantand hisw ife, and both i
nvoicesindicatedtheywereû'lfjorconsulting
services provided by and payableto you undercontractsigned by both parties.'' As before,LAN
paid both invoiceson behalfofAA Ifrom itsNew York Citibank account.
24.
A lIofthe paym ents to Consultant'scom pany w ere intentionally m is-recorded as
iiotherdebtors''on the books,records,and accountsofLAN 'SDelaware subsidiary. LA N
Executive approved the paymentsto Consultant'scom pany,know ing thatthe paym ents were
pursuantto an unsigned tsctitiousconsulting agreem entw ith Consultant'scom pany.
25.
On November7,2007,LAN also paid an additional$58,000to aNew York Bank
ofAmericaaccountinthenameofanothercompany,whichwasjointlyownedbyConsultant's
wife and son. The invoice forthatpaym ent,like thethree from Consultant'scompany,falsely
indicated thatthe paym entwas foriiconsulting servicesand studiesperform ed on the different
aerialroutes in the A rgentine Republic and in the regionalm arket.'' LAN did nothave an
agreem entorarrangem entofany kind w ith this second com pany.
26.
LAN obtained an estimated benefitof$6,743,932asaresultofthe improper
paym entsto Consultant'scom pany to resolve LAN 'Sunion issues.
8
L 4N 'SInternalA ccounting Controls
27.
During the relevantperiod, LAN know ingly and w illfully failed to implem enta
sufficientsystem ofinternalaccounting controls. ln particularand asrelevanthere,LA N had
deficientinternalaccounting controlsthatdid notrequire, amongotherthings,(a)duediligence
fortheretentionofthirdpartyconsultants;(b)afullyexecutedcontractwithathirdpartybefore
paymentcouldbemadetoit;(c)invoicesissuedtotheLAN entitythatin factengagedthethird
party;(d)documentation orotherproofthatserviceshad been rendered by athirdparty before
paymentcouldbemadetoit;(e)thatpaymenttothirdpartiesretainedbyLAN orLAN entities
bemadetobankaccountsheldinthenamesofthosethirdparties;or(9 oversightofthepayment
processto ensure thatpaym entsw ere m ade pursuantto appropriate controls, including those
described above.
28.
LAN Executive,LA N Cargo Executive,and one otherhigh-levelLAN executive
knew thatthe servicesdescribed in the unsigned fictitious agreementwith Consultant'scom pany
were false,and thatthe true purpose ofthe paym entsm ade underitw ere to resolve LA N 'S
disputesw ith itsA rgentine laborunions. AtleastLAN Cargo Executive, m oreover,kntw that
Consultantw ould pay bribesto officials ofthe laborunions. LAN Executive and the otherhighlevelLAN executive who knew aboutthe false nature ofthe agreem enthad the authority and
responsibility to ensure thatLAN devised and m aintained an adequate system ofinternal
accounting controls,knew thatLA N 'Sthen-existing internalaccounting controlsfailed to prevent
LAN from entering into an unsigned Gctitiousconsulting agreem ent,and know ingly and
w illfully failed to im plem entinternalaccounting controlsto addressthe known weaknessesin
partto perm itLAN to enterinto the contract.
9
C O UNT O NE
(Violation oftheFalseBooksand RecordsProvisionsoftheFCPA)
29.
Paragraphs 1 through 28 are realleged and incom orated by reference asthough
fully setforth herein.
30,
From in oraround 2006,and continuing through in oraround 2007, in the
Southern DistrictofFlorida and elsewhere,thedefendant,
LATAM AIRLIN ES G RO UP S.A .,
f/k/a LAN Airlines S.A .,
know ingly and w illfully falsised and caused to be falsised its books,records, and accountsand
did not,in reasonable detail,accurately and fairly retlectitstransactions and dispositions, to wit:
the defendantknow ingly falsitsed recordsrtlating to the retention and naturt ofservicesof, and
paym entsto,Consultantin orderto concealthetruepurpose ofretaining Consultant;allin
violation ofTitle 15,United StatesCode,Section 78m(b)(2)(A),78m (b)(5),and 78ff(a),and
Title l8,U nited StatesCodt,Section 2.
CO UN T TW O
(Violation oftheInternalControlsProvisionsoftheFCPA)
Paragraphs 1through 28 are realleged and incorporated by reference asthough
fully setforth herein.
From in oraround 2006,and continuing through in oraround 2007,in the
Southern DistrictofFlorida and elsewhere,the dtfendant,
LATAM AIRLIN ES G RO UP S.A.,
f/k/a LAN Airlines S.A .,
know ingly and w illfully failed to im plem enta system of internalaccounting controlssufficient
toprovidereasonableassurancesthat:(i)transactionswereexecuted in accordancewith
10
management'sgeneralorspecificauthorization;(ii)transactionswererecordedasnecessaryto
(A)permitpreparation offinancialstatementsin conformity with generally acceptedaccounting
principlesorany othercriteria applicable to such statem ents, and(B)maintain accountability for
assets;(iii)accesstoassetswaspermittedonly inaccordancewith management'sgeneralor
speciGcauthorization;and (iv)the recorded accountability forassetswascompared withthe
existing assetsatreasonable intervals,and appropriate action istaken w ith respectto any
differences,to wit:the defendantknowingly and w illfully failed to im plem ent, am ong other
internalaccountingcontrols,controlsthatrequired:(a)duediligencefortheretentionofthird
party consultants;(b)an executed contractwith athird party beforepaymentcould bemadeto it;
(c)invoicesissuedtotheentitythatinfactengagedthethirdparty;(d)documentationorother
proofthatserviceshadbeenrenderedbyathirdpartybeforepaymentcouldbemadetoit;(e)
paym entto third partiesretained by the defendantoritsaffiliatesbe m ade to bank accounts held
inthenamesofthosethirdparties;or(9 oversightofthepaymentprocesstoensurethat
paym entswere m ade pursuantto appropriate controls,including those described above
AllinviolationofTitle 15,United StatesCode,Section 78m(b)(2)(B),78m(b)(5),and
78ff(a),andTitle 18,United StatesCode,Section2.
AN DREW W EISSM A NN
Chief,Fraud Section
BY :
>
JA ON L1N ER
S iorTrialAttorney,Fraud Section
nited StatesDepartm entofJustice
Crim inalD ivision
1400 New York Ave.,N .W .
W ashington,D .C.20005
(202)514-3740
UNITED1STATES
DISTRIFLSD
CT COURT
Case 0:16-cr-60195-DTKH Document
Entered
Docket
07/25/2016 Page 12 of 14
SOUTHERN
DISTRICTonOF
FLORI
DA
UNITED STATES OF AM ERICA
CASE NO .
VS.
CERTIFICATE OF TRIAL ATTORNEY *
LA TAM AIRLINES GRO UP S.A..
Defendant.
/
CourtDivision:(selectone)
-3L
slianai
FTL
Superseding Case Inform ation:
New Defendantts)
Ke
W)BWest
yTp
NumberofNew Defendants
Totalnumberofcounts
Yes
No
ldo hereby certifythat:
Ihavecarefully considered theallegationsoftheindictment, thenum berofdefendants,thenumberof
probable witnessesand the legalcom plexitiesoftheIndictment/lnfonnation attached hereto.
lam aware thatthe information supplied on thisstatem entw illbe relied upon by theJudgesofthis
Courtin settingtheircalendarsand scheduling crim inaltrialsunderthem andate ofthe Speedy Trial
Act,Title 28 U .S.C.Section 3l6l.
lnterpreter:
(YesorNo)
No
ListIanguage and/ordialect
-
Thiscase w illtake
daysforthepartiesto try.
0
-
Please check appropriate category and type ofoffense listed below :
(Checkonl
yone)
(Checkonlyone)
I
11
lll
IV
V
0 to 5 days
6 to 10 days
11to 20 days
21to 60 days
6ldaysand over
6:
HasthiscasebeenpreviouslyfiledinthisDistrictCourt? (YesorNo)
Ifyes:
Judge:
X
Petty
M inor
M isdem .
Felony
-
No
CaseNo.
(Attachcopyofdispositiveordel)
Hasacomplaintbeen filedinthlsmatter?
lfyes:
M agistrateCaseN o.
Related M iscellaneousnum bers:
(YesorNo)
Defendantts)infederalcustody asof
Defendantts)instatecustodyasof
Rule 20 from theDistrictof
Isthisapotentialdeath penalty case?(YesorNo)
No
No
Doesthiscase originatefrom a m atterpending in theN orthern Region ofthe U.S.Attorney'sOffice
priorto October 14,2003?
Yes
No X
8.
DPesthiscase originatefrom amatterpending intheCentralRegionofthe U.S.Atlorney'sOffice
prlorto Septem ber 1,2007?
Yes
No
m
*penalty Sheetts)attached
>
JA N LIND R
SE IOR TRIA ATTO RN EY,DEPT OF JUSTICE
D TRICT COURT N O.A5501149
REv4?8/0g
U N ITE D STAT ES DISTRIC T CO UR T
SO U TH ER N DISTR IC T O F FLO R IDA
PEN A LTY SH EET
D efendant'sN am e: L ATA M A irlines G roup S.A .
Case N o:
Count#:1
FCPA - False Books and Records
15 U.S.C.$$ 78m (bb(2b(A).78m (b)(5à.and 78ff(ab
* M ax.Penalty:
Fineofup to $25,000,000 orTwice the GrossGain
Count#:2
FCPA - Failure to Im plem entlnternalControls
15U.S.C.jj78m(b)(2)(B),78m(b)(5),and78ff(a)
*M ax.Penalty:
Fineofup to $25,000,000 orTwicetheGrossGain
Count#:
*M ax.Penalty:
Count#:
*M ax.Penalty:
Count#:
*M >x.Penalty:
*Refersonly to possibleterm ofincarceratioë -doesnotincludepossiblefines,restitution,
specialassessm ents,parole term s,or forfeituresthatm ay be applicable.
AO455(Rev01/09)W&i
verôfanIndi
ctment
U NITED STATESD ISTRICT COURT
forthe
Southcm DistrictofFlorida
UnitedStatesofAmerica
V.
LATAM AIRLINES GROUP S.A,
oepndant
)
)
)
)
)
CaseNo.
W AIVER OF AN INDICTM FNT
1understandthatIhavebeenaccusedofoneormoreoffensespunishableby imprisonmeniformorethanone
year.1wasadvised1
ofmy rightsandthenatureoftheproposedchargesagainstm e.
Aoerreceivingthisadvic .Iwaivemyrighttoprosecntionby indictmentan1consenttoprosectttionby
information.
Dat
e:7/:'?,,?s
Depnda '
Ksignature
.
M .W .
d..$
Sign6dureofde
fendant'
Jattorney
or.
qzzr M . ù?;'
1'en
Printednameofdefendant&qtorney
A zlge'sWgzm/xre
Judse'
sprf
a/e#nameandlitle

LATAM Filed Information

Transcription

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