United States efforts to hold foreign (i.e., non-U.S.) officials responsible and accountable for receiving bribes

In a victory for United States federal prosecutors, earlier this week a South Korean government official was found guilty of laundering bribery proceeds in the United States.  This is the second such verdict against a foreign (i.e., non-U.S.) official this year.

In this case, Heon-Cheol Chi, the Director of South Korea’s Earthquake Research Center at the Korea Institute of Geoscience and Mineral Resources (“KIGAM”), was alleged to have demanded and received over $1 million in bribe payments from two seismological companies (one based in the United States; the other based in England) in exchange for providing them with unfair business advantages in the South Korean seismological market. For example, Mr. Chi was alleged to have provided the companies non-public information on open contracts, including confidential information about their competitors and the KIGAM bidding process, and he advocated for government-funded research programs to buy their equipment. In addition, Mr. Chi was alleged to have directed that the bribe payments be paid in cash or wired to his personal bank account in California. From that account, Mr. Chi transferred certain payments to an investment account he held in New York City and spent the remaining funds in South Korea.

Mr. Chi was convicted of one count of transacting in criminally derived property, in violation of 18 U.S.C. § 1957. According to the charges, the funds that he laundered were proceeds derived through violations of South Korea’s bribery law, Article 129 of South Korea’s Criminal Code.

Acting U.S. Department of Justice Criminal Division Chief Ken Blanco issued a statement on the verdict: “As this case demonstrates, the Criminal Division will hold responsible the companies and individuals who are paying bribes to foreign government officials, and the foreign government officials themselves. For the second time in recent months, the Criminal Division has convicted a foreign official who solicited bribes and then laundered the illicit proceeds in the United States. We will continue to hold such individuals responsible and accountable.” For more: https://www.justice.gov/opa/pr/director-south-koreas-earthquake-research-center-convicted-money-laundering-million-dollar.

As noted above, the guilty verdict was the second this year in a case targeting a foreign bribe recipient. In May, a New York federal jury found former Guinean mining minister Mahmoud Thiam guilty on one count of money laundering and one count of transacting in criminal proceeds. For more: https://www.justice.gov/opa/pr/former-guinean-minister-mines-convicted-receiving-and-laundering-85-million-bribes-china.

These cases clearly demonstrate that the United States Department of Justice is not only interested in pursuing cases against those who pay bribes (e.g., under the U.S. Foreign Corrupt Practices Act (“FCPA”)) but also the public officials who receive them.