GOL Linhas Aéreas Inteligentes S.A. (GOL), an airline headquartered in São Paulo, Brazil, will pay more than $41 million to resolve parallel bribery investigations by criminal and civil authorities in the United States and Brazil. According to court documents, GOL entered into a three-year deferred prosecution agreement (DPA) with the Department of Justice in connection with a criminal information filed in the District of Maryland charging the company with conspiracy to violate the anti-bribery and books and records provisions of the Foreign Corrupt Practices Act (FCPA).
Pursuant to the DPA, GOL will pay a criminal penalty of $17 million. The department has agreed to credit up to $1.7 million of that criminal penalty against an approximately $3.4 million fine the company has agreed to pay to authorities in Brazil in connection with related proceedings to resolve an investigation by the Controladoria-Geral da União (CGU) and the Advocacia-Geral de União (Attorney General’s Office). In addition, GOL will give up approximately $24.5 million over two years as part of the resolution of a parallel investigation by the U.S. Securities and Exchange Commission (SEC).
“GOL paid millions of dollars in bribes to foreign officials in Brazil in exchange for the passage of legislation that was beneficial to the airline,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “The company entered into fraudulent contracts with third-party vendors for the purpose of generating and concealing the funds necessary to perpetrate this criminal conduct, and then falsely recorded the sham payments in their own books. Today’s resolution demonstrates the Department of Justice’s commitment to holding accountable companies that corrupt the functions of government for their own financial gain.”
“Our office’s strong working relationship with the Department of Justice’s Fraud Section demonstrates our commitment to weed out corruption by companies that operate throughout Maryland,” said U.S. Attorney Erek Barron for the District of Maryland. “I am committed to ensuring that any company operating in this District does so lawfully and ethically without corrupt conduct.”
“Companies bribing their way to profits will ultimately pay the price for their crimes,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “GOL paid off foreign officials to pass favorable legislation and then tried to conceal its bribes as legitimate transactions. Today’s settlement is proof that the FBI and our law enforcement partners will work to eliminate corruption anywhere it occurs, whether at home or abroad.”
According to the company’s admissions and court documents, between 2012 and 2013, GOL conspired to offer and pay approximately $3.8 million in bribes to foreign officials in Brazil. Specifically, GOL caused multiple bribe payments to be made to various officials in Brazil to secure the passage of two pieces of legislation favorable to GOL. The legislation involved certain payroll tax and fuel tax reductions that financially benefitted GOL, along with other Brazilian airlines.
According to court documents, in order to effectuate the bribery scheme, a member of GOL’s Board of Directors caused GOL to enter into sham contracts with, and make payments to, various entities connected to the relevant Brazilian officials. GOL maintained books and records that falsely listed the corrupt payments as legitimate expenses, including as advertising expenses and other services.
As part of the DPA, GOL has agreed to continue to cooperate with the department in any ongoing or future criminal investigations relating to this conduct. In addition, under the agreement, GOL agreed to continue to enhance its compliance program and provide reports to the department regarding remediation and the implementation of compliance measures for the term of the DPA.
The government reached this resolution with GOL based on a number of factors, including, among others, the nature, seriousness, and pervasiveness of the offense. GOL received full credit for its cooperation with the department’s investigation, which included, among other things, timely providing the facts obtained through the company’s internal investigation – which included reviewing voluminous documents, interviewing witnesses, conducting background checks, and testing over two thousand transactions. The company promptly engaged in remedial measures by, among other things, redesigning its entire anti-corruption program. Accordingly, the criminal penalty calculated under the U.S. Sentencing Guidelines reflects a 25% reduction off the bottom of the applicable guidelines fine range. Due to GOL’s financial condition and demonstrated inability to pay the penalty calculated under the U.S. Sentencing Guidelines, however, GOL and the department agreed, consistent with the department’s inability to pay guidance, that the appropriate criminal penalty is $17 million.
The FBI’s Los Angeles Field Office is investigating the case. Assistant Chief Derek J. Ettinger and Trial Attorney Joseph McFarlane of the Criminal Division’s Fraud Section, as well as Assistant U.S. Attorney David I. Salem of the District of Maryland, are prosecuting the case. Authorities in Brazil provided assistance in this matter, as did the Criminal Division’s Office of International Affairs.
The Fraud Section is responsible for investigating and prosecuting FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal-fraud/foreign-corrupt-practices-act.