A&O Shearman FCPA Digest | United States v. Mario Covino (C.D. Cal. 2008)

Source Documents

Foreign Official
Officers and employees of state-owned enterprises including, but not limited to, Petrobras (Brazil), Dingzhou Power (China), Datang Power (China), China Petroleum, China Resources Power, China National Offshore Oil Company, PetroChina, Maharashtra State Electricity Board (India), Korea Hydro and Nuclear Power (“KHNP”), Petronas (Malaysia), Dolphin Energy (UAE), and Abu Dhabi Company for Oil Operations (UAE).

Nature of Business
Mario Covino, an Italian national and U.S. resident, was the Director of Worldwide Factory Sales for Control Components, Inc. (“CCI”), a California-based company that designs and manufactures severe service control valves used in the nuclear, oil and gas, and power generation industries.

Influence to be Obtained
From 2003 to 2007, Covino caused CCI employees and agents to make payments totaling approximately $1 million to officials employed by state-owned companies, for their assistance in obtaining sales contracts thereby earning profits of approximately $5 million.

For example, in March 2004, Covino approved a payment of $15,000 to an official of PetroChina, for assistance in awarding CCI PetroChina’s business. Covino caused CCI to wire the payment to the Bank of China. The following August, Covino provided false and misleading statements to auditors when he denied knowledge of improper payments. He obstructed the audit, initiated by CCI’s parent company, IMI plc, by deleting emails referencing the payments and instructing other employees to do the same.

Enforcement
On December 17, 2008, Covino entered an agreement with the DOJ under which he pleaded guilty on January 8, 2009 to conspiring to violate the anti-bribery provisions of the FCPA. Under the terms of his plea agreement, Covino agreed to cooperate with the government in its continuing investigation and prosecution of six other former CCI employees, among which five have pleaded guilty and the remaining defendant is considered a fugitive.

On March 11, 2013, Covino was sentenced to three years of probation, including three months in a home detention program. He was also ordered to pay a fine of $7,500.