Former CEO Pleads Guilty to FCPA Bribery of Honduran Officials
The Department of Justice reports that Jorge Granados, former CEO of Latin Node Inc. (LatiNode), pleaded guilty to conspiring to pay bribes to government officials in Honduras in violation of the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA).
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LatiNode Won Contract from State-Owned Telecomm Authority
LatiNode provided wholesale telecommunications services using Internet protocol technology to countries throughout the world, including Honduras. In December 2005, LatiNode was the sole winner of an “interconnection agreement” with Empresa Hondureña de Telecomunicaciones (Hondutel), the wholly state-owned telecommunications authority in Honduras.
The agreement permitted LatiNode to use Hondutel’s telecommunications lines to establish a network and provide long distance services between Honduras and the U.S. LatiNode was required to pay Hondutel a set rate per minute for calls to Honduras.
Former CEO, Others Paid over $500K in Bribes to Keep Contract, Reduced Rates
Granados and other LatiNode executives, including Manuel Caceres, the vice president for business development, agreed to a secret deal to pay bribes to Hondutel officials. Between September 2006 and June 2007, LatiNode executives paid more than $500,000 in bribes to the Honduran officials to keep the interconnection agreement, reduced rates, and other economic benefits from Hondutel. They concealed many of the payments by laundering the money through LatiNode subsidiaries in Guatemala and to accounts in Honduras controlled by the Honduran government officials.
Could Face Max Penalty of 5 Yrs in Prison, $250K Fine
Granados faces up to five years in prison and a fine of the greater of $250,000, or twice the value gained or lost.
(In April 2009, LatiNode pleaded guilty to a one-count information charging the company with a criminal violation of the FCPA. As part of the plea agreement, LatiNode agreed to pay a $2 million fine. (See ITT’s Online Archives or 04/09/09 news, 09040999 , for BP summary of LatiNode’s plea agreement.)
Two other former senior executives of LatiNode, Manuel Salvoch and Juan Pablo Vasquez, have also pleaded guilty to conspiring to pay bribes to the Honduran officials.)
(See ITT’s Online Archives or 12/22/10 news, 10122229, for BP summary of the indictment of Jorge Granados and Manuel Caceres.)
(Press release dated 05/19/11)