This is a very complicated case, Maude. You know, a lotta ins, a lotta outs, a lotta what-have-yous. And, uh, a lotta strands to keep in my head, man. Lotta strands in old Duder’s head. – The Dude, The Big Lebowski
Each FCPA case provides valuable lessons in the mechanics of bribery schemes and the common techniques used by violators to secure funds and make illegal payments to foreign government officials. Criminal violators often act with brazen disregard of the laws in some misguided belief (or rationalization) that they will not be discovered nor even investigated for their obvious graft. This delusion undergirds the actions of white collar criminals and often prevents any hope for self-regulation or even deterrence from engaging in misconduct where white collar criminals directly benefit from their misdeeds.
In the Berko case, the facts outlined in the indictment present yet another example of this total disregard for normative behavior.
After arranging meetings in 2014 between the Turkish energy company and Ghanian government officials, Berko and his co-conspirators, set out to secure the contract between the Turkish the parties to construct and operate a power plant in Ghana. After the parties reached an agreement in 2015, a co-conspirator emailed the defendant an invoice for $500,000 from a Ghana consulting company with payment instructions that routed the payment through a US bank in New York to a Ghanian bank. In the email, the co-conspirator referenced three future invoices of $1.5 million to be paid at upcoming milestones in the power project (e.g. signing of the EPA, the finalization of the letter of credit and the start of operations of the power plant).
Berko and the co-conspirators discussed the issues in a series of emails. Co-Conspirator 1 wrote:
[k]indly arrange for the first 500k$ to be in Ghana this week. I’d advise you to send the same as directed to the relevant bank account. The intended recipient is on my case. Please make arrangements to have the $ 1.5m also here in Ghana no later than end of this week or early part of the following. I am going to part with 250k$ to [Ghana Official 1] on the basis that I will receive the same in due course. This will represent part payment to [Ghana Official 1] as discussed.
On or about April 24, 2015, with the assistance of Ghana Official 1, a team of approximately five Ghana officials traveled to Turkey to inspect the equipment Turkish energy company proposed to use in the Power Plant. Berko and Co-Conspirator 1 paid the trip expenses for the five Ghana officials (including for flights and hotel rooms) and also paid each of them a $5,000 bribe. Following the trip, the Ghana officials sent Ghana Official 1 a favorable assessment of the equipment.
A senior Ghana Official signed the EPA on May 12, 2015. On the same date, Co-Conspirator 4 emailed Co-Conspirator 1 an invoice for $1.5 million from Ghana Consulting Company 2 that he referred to as “invoice 2” (“Invoice 2”) and requested payment. Ten days later, May 22, 2015, $1.5 million was wired from the Turkish energy company to the Ghana Consulting Company 2 account through correspondent bank accounts in New York.
On June 11, 2015, the Ghana Consulting Company wired $75,000 to Berko’s account in Ghana. Berko thereafter transferred approximately $50,000 from this account to an account he had in the United States.
Later in 2015, the final contract was executed after meetings in London, and the parties agreed to pay Ghana Consulting Company 1 $42 million in milestone and periodic payments. The final contract was executed by Turkish energy company and Ghana Consulting Company 1 in September 2015.
On August 17, 2015, Co-Conspirator 1 forwarded an email to Co-Conspirator 2 requesting payment of $250,000 in reimbursement for bribes previously paid to Ghanaian officials. Pursuant to Berko’s instruction, Co-Conspirator 1 provided in an email a breakdown of the bribery payments: Visas $5000; Pure $20,000; Ghanian Official $10,000; Ministry of Power $20,000; Power Team $25,000; Gridco $20,000; Travel to Turkey $45,000; Parliament $30,000; and Asante personal $35,000. The parties then emailed each other negotiating the payments and amounts. After further discussions in explicit emails, Co-Conspirator 2 agreed to settle the dispute by paying Berko approximately $140,000. A payment was made from Turkish energy company to Berko’s personal account.
The Scheme Unravels
Starting in June 2015. Goldman Sachs officials began to question Turkish energy company about the payments to Ghana consulting company that appeared in their financial analysis. Co-Conspirator 3 explained that the consulting company was Turkish energy company’s local partner.
Thereafter, Goldman Sachs conducted a due diligence review of the transaction and various email accounts and communications, including personal accounts used by Berko and others for incriminating conversations.
Even after Goldman Sachs launched this review, the Turkish energy company wired $194k funds to Berko’s personal account in Ghana. In response to specific inquiries by Goldman Sachs’ compliance personnel as a due diligence follow up, two co-conspirators responded with a false explanation that the consulting company provided “local services,” such as securing visas and car rentals. The co-conspirators stated the consulting company had received $300,000 for its services and expected an additional $200,000 to $300,000 later in 2016. When asked for additional information about this, Co-Conspirator 2 responded in an email, “Sorry[.] We don’t have time for this …”
Goldman Sachs withdrew from the energy project in Ghana. Berko resigned from Goldman Sachs in early 2017.