Freepoint Commodities LLC, a trading company in Stamford, Connecticut, will pay $98.5 million to settle violations of the Foreign Corrupt Practices Act stemming from a scheme to bribe officials at Brazil’s state oil company, Petróleo Brasileiro S.A. – Petrobras, according to the Department of Justice.

Freepoint entered into a three-year deferred prosecution agreement to resolve a criminal information filed in federal court in Connecticut. The information charged Freepoint with conspiracy to violate the anti-bribery provisions of the FCPA.

Between 2012 and 2018, Freepoint and co-conspirators bribed Petrobras officials in exchange for confidential information about Freepoint’s competitors’ pricing and bids according to the Government.

They concealed the bribery by using code words and encrypted messaging apps, staging sham negotiations, and funneling the bribes through an intermediary who used offshore bank accounts and shell companies.

Freepoint earned over $30 million in profits from the bribery, the DOJ said.

Three individuals have been charged in the case. They are Glenn Oztemel, who allegedly worked as a senior oil trader at Freepoint, his brother Gary Oztemel, who allegedly used his company Oil Trade & Transport S.A. to help Freepoint, and Eduardo Innecco, Freepoint’s agent who allegedly used purported “consulting fees and commissions” from Freepoint to bribe Petrobras officials.

Their cases are pending.

The DPA requires Freepoint to pay a criminal penalty of $68 million and administrative forfeiture of $30.5 million.

The DOJ said it will credit up to one-third of the criminal penalty against amounts Freepoint pays to resolve a related law enforcement investigation in Brazil.

Freepoint will disgorge $7.6 million to the U.S. Commodity Futures Trading Commission for its conduct, and the DOJ will credit that amount as well.

The DOJ said Freepoint’s cooperation initially was “limited in degree and impact, and largely reactive.”

But the DOJ ultimately gave Freepoint cooperation credit for “significant efforts to aggregate and analyze complex financial information and trade data for more than 4,000 transactions.” Among other things, Freepoint also made company officers and employees available for interviews (with separate counsel where appropriate).

Freepoint’s remedial measures also led the DOJ to apply a 15 percent reduction off the bottom of the U.S. Sentencing Guidelines fine range.

The measures included retaining an advisory firm to evaluate its third-party compliance program and overhauling that and its risk management program, implementing enhanced risk-based due diligence, screening, ongoing monitoring, and oversight procedures, and starting FCPA training for third-party agents.

JEFFREY NEWMAN IS A WHISTLEBLOWER LAWYER WHO HANDLES MAJOR CASES UNDER THE SEC, CFTC AND FINCEN WHISTLEBLOWER PROGRAMS. HE CAN BE REACHED AT JEFF@JEFFNEWMANLAW.COM OR AT 617-823-3217