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Latin Node Inc. Pleads Guilty

Latin Node Inc. (Latinode), formerly a privately held Florida corporation, pleaded guilty on April 7, 2009 to violating the Foreign Corrupt Practices Act in connection with improper payments in Honduras and Yemen, the Justice Department has announced.

At a hearing before U.S. District Judge Paul Courtney Huck in the Southern District of Florida, Latinode pleaded guilty to a one-count information charging a criminal violation of the FCPA's anti-bribery provisions. As part of the plea agreement, Latinode agreed to pay a $2 million fine during a three-year period.

Latinode's corporate parent, eLandia International Inc. (eLandia), disclosed potential FCPA violations to the Justice Department after eLandia's acquisition of Latinode. The DOJ said eLandia's counsel voluntarily disclosed the unlawful conduct promptly upon discovering it; conducted an internal FCPA investigation; shared the factual results of thet investigation with the DOJ; cooperated fully in the government's investigation; and took appropriate remedial action, including terminating senior Latinode management with involvement in or knowledge of the violations. Coral Gables, Fla.-based eLandia trades on the over-the-counter bulletin board under the symbol ELAN.OB.

Latinode provided wholesale telecommunications services using internet protocol technology to countries throughout the world, including Honduras and Yemen. It admitted that from March 2004 through June 2007, it paid or caused to be paid $1,099,889 to third parties, knowing that some or all of the funds would be passed on as bribes to officials of Hondutel, the Honduran state-owned telecommunications company. Latinode made the payments in exchange for an interconnection agreement with Hondutel, as well as for reducing the rate per minute under the interconnection agreement. The payments were made from Latinode's Miami bank account and were approved by the company's senior executives. Recipients included a member of the evaluation committee responsible for awarding Hondutel interconnection agreements, the deputy general manager (who later became the general manager) of Hondutel and a senior attorney for Hondutel.

In addition, from July 2005 to April 2006, Latinode made 17 payments totaling 1,150,654 either directly to Yemeni officials or to a third-party consultant, knowing that some or all of the money would be passed on to Yemeni officials, in exchange for favorable interconnection rates in Yemen. The payments were also made from Latinode's Miami bank account. Intended recipients included the son of the Yemeni president; the vice president of operations at TeleYemen, the Yemeni government-owned telecommunications company; other officials of TeleYemen; and officials from the Yemeni Ministry of Telecommunications.

View the DOJ's April 7, 2009 release here.
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Full post as published by The FCPA Blog on April 07, 2009 (boomark / email).