Five Individuals Charged in Foreign Bribery Scheme Involving Rolls-Royce Plc and Its U.S. Subsidiary

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https://www.justice.gov/opa/pr/five-individuals-charged-foreign-bribery-scheme-involving-rolls-royce-plc-and-its-us

Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Tuesday, November 7, 2017

Five Individuals Charged in Foreign Bribery Scheme Involving Rolls-Royce Plc and Its U.S. Subsidiary

Charges were unsealed today against two former executives of Rolls-Royce plc and its subsidiaries (Rolls-Royce), a former Rolls-Royce employee, a former intermediary for Rolls-Royce in Kazakhstan and an executive of an international engineering consulting firm – all for their alleged participation in a scheme to pay bribes to foreign government officials for the benefit of a U.S.-based Rolls-Royce subsidiary, including to secure a contract to supply equipment and services to power a gas pipeline from Central Asia to China.
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Petros Contoguris, 70, a citizen of Greece residing in Turkey, was charged by an indictment filed in the Southern District of Ohio on Oct. 12, and unsealed today, with one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA), one count of conspiracy to launder money, seven counts of violating the FCPA and 10 counts of money laundering. Contoguris is believed to be outside of the United States. James Finley, 66, a citizen of the United Kingdom residing in Taiwan, pleaded guilty on July 28, before Chief Judge Edmund A. Sargus Jr. of the Southern District of Ohio, to one count of conspiracy to violate the FCPA and one count of violating the FCPA. Aloysius Johannes Jozef Zuurhout, 53, of the Netherlands; Andreas Kohler, 53, of Austria; and Keith Barnett, 48, of Houston, Texas, each pleaded guilty to one count of conspiracy to violate the FCPA before Chief Judge Sargus on June 13; June 6; and Dec. 20, 2016, respectively.
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According to the indictment and informations unsealed today, Contoguris, the founder and chief executive officer of Gravitas & CIE. International Ltd. (Gravitas); Finley, a former senior executive in energy at Rolls-Royce; Barnett, a former regional director in energy at Rolls-Royce; Zuurhout, a former energy sales employee at Rolls-Royce; and Kohler, a managing director at an international engineering and consulting firm, and others, allegedly conspired to pay bribes to foreign officials in exchange for directing business to Rolls-Royce Energy Systems Inc. (RRESI). RRESI was a U.S.-based indirect subsidiary of Rolls-Royce plc, the United Kingdom-based manufacturer and distributor of power systems for the aerospace, defense, marine and energy sectors.

The indictment alleges that Contoguris, working with employees of an international engineering consulting firm (Technical Advisor), including Kohler, devised a scheme with Rolls-Royce executives and employees, including Zuurhout, Barnett and Finley, whereby Rolls-Royce would pay kickbacks to the Technical Advisor employees, and bribes to at least one foreign official, and disguise these payments as commissions to Contoguris’s company, Gravitas, in exchange for helping Rolls-Royce win contracts with Asia Gas Pipeline LLP (AGP).

According to the indictment, AGP was created to build and connect a gas pipeline between Central Asia and China, and the Technical Advisor purported to provide independent engineering consulting advice and other services to AGP. The indictment further alleges that after AGP awarded Rolls-Royce a contract in November 2009, worth approximately $145 million, Rolls-Royce made commission payments to Gravitas, and Contoguris then passed a portion of those commission payments onto the Technical Advisor employees knowing that they would share that money with a foreign official consistent with their corrupt agreement.

In pleading guilty, Finley, Barnett and Zuurhout admitted that they each participated in a conspiracy, going as far back as approximately 1999 and continuing into 2013, to engage commercial advisors who would use their commission payments from Rolls-Royce to bribe foreign officials in a number of countries to help Rolls-Royce secure an improper advantage and obtain and retain business with foreign governments and instrumentalities across the globe.

The charges announced today follow the announcement on Jan. 17, of a deferred prosecution agreement with Rolls-Royce plc and a more than $800 million total penalty as part of a global resolution to investigations by the Department of Justice and U.K. and Brazilian authorities related to the corrupt conduct. The agreement acknowledged Rolls-Royce’s cooperation in this case, including with the Department’s investigation into individuals, and significant remedial measures.
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