Business Crimes Hotline

Keppel received a 25% discount off the bottom of the applicable United States Sentencing Guidelines fine range and was credited with “substantial cooperation” and “extensive remedial measures,” although it was not eligible for voluntary disclosure credit. The company received this credit in part through remedial measures including the termination or discipline of employees involved in the illegal activity, in addition to the implementation of an updated compliance and internal controls system aimed to reduce corruption risks.

Keppel entered into a deferred prosecution agreement with the Department of Justice (DOJ), resolving charges set forth in the criminal information for conspiracy to violate the FCPA filed with the United States District Court for the Eastern District of New York. Keppel's three-year deferred prosecution agreement requires annual self-reporting to the Fraud Section, to include an initial review and report, in addition to two follow-up reviews and reports. Keppel USA also pleaded guilty to conspiracy to violate the FCPA's anti-bribery provisions and was sentenced by the United States District Court for the Eastern District of New York. Furthermore, the Aug. 29, 2017, guilty plea of a former Keppel senior in-house attorney, Jeffrey Chow, was unsealed. Chow pleaded guilty to FCPA conspiracy in the United States District Court for the Eastern District of New York, admitting to drafting consulting contracts used to facilitate bribe payments to Brazilian officials totaling $55 million, for which the company was awarded $1 billion in contracts. Chow cooperated with the DOJ's investigation of Keppel and Keppel USA, and faces up to five years in prison.

Keppel's Brazilian bribery scheme lasted over a decade — commencing at least as early as 2001 and ending in 2014 — during which the company paid approximately $55 million in bribes to Petróleo Brasileiro S.A. (“Petrobras”), the Brazilian state-controlled oil company, in addition to the Brazilian Worker's Party, which was in power during the relevant timeframe (between 2003 and 2016). Through bribes disguised as high intermediary commissions, Keppel won 13 contracts, including with Petrobras and another Brazilian entity. Brazilian officials responsible for overseeing the bidding process developed a system whereby they received a portion of the contract value. The company's consultant was responsible for transferring commissions received from Keppel — and paid into bank accounts in the names of his shell companies—to these officials. The illicit payments were made with the knowledge of, or approval by, numerous Keppel senior executives. According to the DOJ, as a result, Keppel and Keppel USA earned approximately $351.8 million in profits.

Potential corruption at Keppel was first reported by Bloomberg in August 2016, related to five senior executives named by a Brazilian court as individuals authorizing bribe payments through the company's Brazilian agent. Keppel issued a public statement denying that such authorizations were made. However, following an internal investigation, in October 2016, Keppel revised its prior statement publically and indicated that “certain transactions associated with [the agent] may be suspicious.” In the same press release, Keppel also pledged to cooperate fully with the relevant enforcement authorities. Keppel's CEO — one of the executives named in Brazilian court documents and cited by Bloomberg — retired effective March 31, 2017. Despite his reported involvement, the CEO continued to be paid millions of dollars by the company through 2016.

The Acting Assistant Attorney General, John P. Cronan of the DOJ's Criminal Division, remarked that “[t]his case represents the first coordinated FCPA resolution with Singapore and the most recent of several coordinated resolutions with Brazil. The Criminal Division is committed to working with out international partners to ensure that honest, law abiding companies are able to compete on a level playing field across the globe.” The case is also being investigated by the FBI's Houston-based International Corruption Squad.
— Colleen Snow, Mayer Brown