United States v. LATAM Airlines Group S.A. (S.D. Fla. 2016)

• Case Name
• United States v. LATAM Airlines Group S.A. (S.D. Fla. 2016)

• Date Filed
• 07/25/2016

• Enforcement Agency
• DOJ

• Countries
• Argentina

• Foreign Official
• Unnamed foreign officials from Argentine labor unions.

• Date of Conduct
• 2006 to 2007

• Nature of Business
• LAN Airlines S.A., now LATAM Airlines S.A., is an airline company based in Santiago, Chile.  LAN provided passenger and cargo transportation services throughout South and Central America as well as the United States, Europe, and Australia.  At the time of the alleged FCPA violations, LAN maintained a class of securities listed stock on the New York Stock Exchange.

• Influence to be Obtained
• According to the DOJ’s deferred prosecution agreement, LAN negotiated and executed a “fictitious consulting agreement” in 2006 worth $1.15 million to allegedly funnel bribes to Argentine labor union officials and stem potential labor unrest that threatened the company’s expansion into the Argentine airline market.  According to the DPA, LAN executives knew at the time they approved the consulting agreement that the services described would never be provided and the company failed to perform any meaningful due diligence into the consultant.  Furthermore, the DOJ claims that upon receipt of invoices for the consulting agreement, LAN approved payment and intentionally misreported the payments on the company’s books and records.

• Enforcement
• On July 25, 2016, the DOJ announced that LATAM, as successor-in-interest to LAN, settled the charges against the company for violations of the FCPA’s books-and-records and internal controls provisions through a deferred prosecution agreement.  According to the agreement, LATAM would pay a criminal penalty of $12.75 million.  Pursuant to a separate enforcement action by the SEC, LAN Airlines agreed to pay an additional sanction of $9,437,788.  The SEC also separately charged LAN Airlines’ CEO, Ignacio Cueto Plaza, with violations of the FCPA.

• Amount of the Value
• Not Stated

• Amount of Business Related to Payment
• $6,743,932.

• Intermediary
• Local Agent

• Citizenship of Parent Entity
• Chile

• Total Sanction
• $ 12,750,000

• Compliance Monitor
• Yes

• Reporting Requirements
• No

• Case is Pending?
• No

• Total Combined Monetary Sanction
• $ 22,187,788

• Related Enforcement Actions
• In the Matter of LAN Airlines S.A. (2016)
  In the Matter of Ignacio Cueto Plaza (2016)
  

LATAM Airlines Group S.A. 

• Citation
• United States v. LATAM Airlines Group S.A., No. 0:16-cr-60195 (S.D. Fla. 2016).

• Date Filed
• 07/25/2016

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Books-and-Records
  • Internal Controls

• Other Statutory Provision
• None

• Disposition
• Deferred Prosecution Agreement

• Defendant Jurisdictional Basis
• Issuer

• Defendant's Citizenship
• Chile