The Department of Justice reports that an airline headquartered in Brazil will pay more than $41 million to resolve parallel bribery investigations by criminal and civil authorities in the U.S. and Brazil. The Securities and Exchange Commission notes that the original penalty amount exceeded $87 million but that the remainder was waived due to the airline’s demonstrated financial condition and inability to pay the fines in full.
According to the DOJ, the airline conspired to offer and pay about $3.8 million in bribes to foreign officials in Brazil to secure the passage of two pieces of favorable legislation. To effectuate this scheme a member of the board of directors caused the airline to enter into sham contracts with, and make payments to, various entities connected to the relevant Brazilian officials. The airline maintained books and records that falsely listed the corrupt payments as legitimate expenses, including advertising and other services.
The airline entered into a three-year deferred prosecution agreement with the Department of Justice in connection with a criminal information charging the airline with conspiracy to violate the anti-bribery and books and records provisions of the Foreign Corrupt Practices Act. Under that DPA the airline will pay a criminal penalty of $17 million, continue to enhance its compliance program, and provide reports to the DOJ regarding its remediation and compliance efforts. The airline will also give up about $24.5 million over two years as part of the resolution of a parallel investigation by the SEC and pay about $3.4 million in additional penalties or restitution to Brazilian authorities.
The DOJ notes that the airline received full credit for its cooperation with the department’s investigation, which included timely providing facts obtained through an internal investigation, and its remedial measures, which included redesigning its entire anti-corruption program, disciplining the director who orchestrated the bribery scheme, and enhancing internal accounting controls.
For more information on the FCPA and how to ensure your company’s compliance, please contact Kristine Pirnia at (202) 730-4964 or via email.
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