The Russian government. Bribes. Enriched uranium. Secret Swiss bank accounts. These elements have all the makings of a Tom Clancy novel or even a story about allegations plaguing certain ex-confidants of President Trump. Instead, they are part of a recent prosecution in Baltimore involving the Foreign Corrupt Practices Act. With so much going on in the news these days, this story received little play and that is a shame.
A recently unsealed affidavit tells an amazing story about corruption in both the United States and Russia. A story that includes a New Jersey man sentenced to prison last week.
The affidavit was written in October 2014 by a special agent from the Department of Energy. Unlike the FBI or Homeland Security, few members of the public know that the U.S. Department of Energy has its own law enforcement unit.
The Department’s Office of the Inspector General has some pretty important duties. Included in their duties is keeping our power grid safe and working with the National Nuclear Security Administration to protect our nuclear stockpiles.
Not all of the affidavit has been unsealed. In fact, much of the court record remains sealed. Keeping records sealed is common if one or more of the suspects in a case have not yet been captured or if national security interests are involved. What we can share, we will.
The Department of Energy (“DOE”) sought to arrest Daren Condrey and Boris Rubizhevsky for conspiracy to commit wire fraud. Allegedly also involved in that case is a Russian national, Vadim Mikerin. The feds say that Mikerin is the director of Tenam, a U.S. company that is a subsidiary of JSC Techsnabexport (“Tenex”). That company is in turn part of the Russian government owned atomic energy corporation.
The DOE says the United States and Russia entered into an agreement in 1992 to dispose of highly enriched uranium from disassembled nuclear warheads. That uranium would be sold to nuclear power plants in the United States. Tenam is involved in the sale and transfer of this uranium here in the United States.
Indictments Against Daren Condrey and Boris Rubizhevsky
Daren Condrey runs a shipping company called TLI Logistic International. Court records say that TLI brought the enriched uranium from Russia to the United States.
Boris Rubizhevsky ran a one-person security company called Nextgen Security in New Jersey. The feds say he served as a “consultant” to Tenam and Mikerin.
According to the feds, Condrey and Rubizhevsky participated in a bribery and kickback scheme to help Condrey land valuable contracts from the Russian uranium supplier, Tenex.
Shipping enriched uranium from Russia to the United States is apparently a pretty costly venture. The DOE agent says that Condrey’s company, TLI, charged $33,026,838.68 for these services.
What makes the scheme illegal are allegations that Daren Condrey was paying kickbacks to Mikerin for the business. Like many kickback schemes we have investigated, the feds say that trio was using offshore accounts in Nicosia, Latvia, Switzerland and Cyprus and shell companies located in the Seychelles and the U.K.
The DOE was able to secure search warrants to look at emails between the parties. Instead of calling the alleged payments “kickbacks” or “bribes”, the players came up with the term “cake.”
One email said, “Carol’s [Condrey] cake has been duly received. Thank you very much.”
Boris Rubizhevsky’s role appears more limited and that of an intermediary.
Foreign Corrupt Practices Act Prosecution (FCPA)
Vadim Mikerin was prosecuted for his role in the scheme to violate the Foreign Corrupt Practices Act. That law prohibits anyone from offering or giving bribes to foreign government officials. Because Tenex is a subsidiary of the Russian stated owned atomic energy corporation, officials within that company are considered “foreign government officials.” He pleaded guilty to money laundering conspiracy in August of 2015 and was sentenced to 48 months in prison.
Boris Rubizhevsky was sentenced last week to 1 year in prison for conspiracy to commit money laundering.
Foreign Corrupt Practices Act and FCPA Whistleblower Awards
There us so much about this story that can’t yet be shared. There are several important takeaways about this case, however, that are public.
Today, much of the news we see concerns Russia meddling in U.S affairs. This case presented an unusual twist. The allegations were that Americans were bribing Russian officials in the hopes of gaining a competitive advantage.
Condrey and Rubizhevsky’s story reminds me of a pedophile who fled the United States during the 70’s and hoped he would be warmly received in Cuba. He was promptly tossed in prison upon his arrival. Why? Because no one likes pedophiles.
In this case, it is safe to say that no one likes greedy crooks who try to bribe their way to success. By bribing Russian officials, TLI allegedly received $33 million in contracts that could have been awarded to legitimate American businesses that don’t engage in bribery. (We say alleged because much of the docket concerning Daren Condrey remains sealed and can’t be discussed. As a general reminder, allegations in court records and affidavits are just that, “allegations” and not proof of criminal conduct.)
Russia also has a reason to be upset with the scheme. Because so much was being added to the bill to cover bribes, the Russians were paying too much for transportation services. The only ones profiting were the crooks.
Whether Russian officials are Canadian officials are being bribed, U.S. prosecutors take a dim view of corporate greed and bribery schemes. No matter who gets the payoff, it is often legitimate U.S. businesses and their employees who suffer.
Catching these foreign bribery schemes is extremely difficult. This is especially true when much of the crime takes place outside the United States. In this case, the agents detailed an elaborate scheme involving the Russian government, shell corporations in the U.K and Seychelles and bank accounts in Switzerland, Latvia and Cyprus.
So how do these schemes get brought to light?
The answer may surprise you… Whistleblowers!
Violations of the Foreign Corrupt Practices Act (FCPA) are investigated by the SEC and Department of Justice. The SEC Whistleblower Program can pay awards of up to 30% of what is collected from the wrongdoers. By reporting one of these schemes, you may be eligible for an award.
The current administration appears to be just as focused on foreign bribery and FCPA as was the last administration. And that means plenty of FCPA whistleblower opportunities.
To qualify for an award, you must have original source (inside) information about bribery or attempted bribery of foreign companies. And unlike some of other whistleblower laws, the SEC allows anonymous filings meaning it is easier to report and avoid your name being exposed.
Interested in becoming a whistleblower? Visit our FCPA whistleblower award page. Ready to find out if you have a case? Contact attorney Tim Granitz at [hidden email] or by phone at 800.669.7782 (direct) for a no obligation consultation. All inquiries protected by the attorney client privilege and kept confidential.