Nationality of Foreign Officials: Brazil
Summary of Allegations:
Between 2005 to 2017, J&F Investimentos S.A., its subsidiary JBS S.A., owners Joesley Batista and Wesley Batista (“the Batistas”) bribed Brazilian government officials via shell companies and intermediaries to secure financing transactions, benefits, and merger approvals with state-owned and state-controlled entities Banco Nacional de Desenvolvimento Econômico e Social (“BNDES”), Caixa Econômica Federal (“Caixa”), and Fundação Petrobras de Seguridade Social (“Petros”).
In 2009, upon JBS’ acquisition of Pilgrims Pride Corporation (“Pilgrims”), the Batistias bribed the then Brazilian Finance Minister with US$150 million to secure US$2 billion convertible debentures from BNDES for the Pilgrims acquisition and ongoing investment. The bribery scheme lasted from 2009 to 2015, unbeknownst to Pilgrims, when it was under significant control by the Batistas, and commingled funds and shared board, executives, accounting systems, and internal controls with JBS. The Batistias took extra steps to conceal the bribery scheme from Pilgrims’ accountants and caused Pilgrims’ failure to maintain accurate books and records and adequate internal control.
Between 2011 and 2014, J&F transferred US$25 million bribes to a Brazilian official in exchange for securing financing transactions with Caixa, and prepared to wire US$4.6 million bribes to another official to obtain financing transactions with Petros between 2011 and 2017.
Approximate Alleged Payments to Foreign Officials: Over US$177 million
Business Advantage Allegedly Obtained: to secure financing transactions, benefits, and merger approvals with state-owned and state-controlled entities
Agencies: Brazil: Federal Police, United States: Department of Justice, United States: Securities and Exchange Commission
Results: Cease-and-Desist Order, Civil Penalty, Compliance Monitor, Criminal Fine, Plea Agreement
Year Resolved: 2020
Compliance Monitor: three-year self-report
In 2018, J&F has signed a plea deal with Brazil government with a payment of $2.64 billion. Further details were not disclosed.
On 7 December 2018, the U.S. DOJ questioned J&F Investimentos’ largest shareholders Joesley Batista and Wesley Batista.
On 14 October 2020, J&F and its affiliates reached a resolution with the U.S. Department of Justice and the Securities Exchange Commission over charges of conspiracy to violate the FCPA anti-corruption provisions, and substantive violation of the FCPA books and records and internal controls provisions, respectively.
J&F entered into a plea agreement with the DOJ and agreed to pay a criminal monetary penalty of $256,497,026, after applying a 10% reduction off the bottom of the U.S. Sentencing Guidelines for J&F’s credit for remediation and cooperation with the investigation.
Separately, J&F, JBS, and the Batistas reached a resolution with the SEC. The resolution requires the company to pay disgorgement of $26,866,565, conduct a three-year self-report of remedial measures and effectiveness of the anti-corruption system, and imposes a civil penalty of US$550,000 on each of Joesley Batista and Wesley Batista.