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EMBRAER – Presidente sabia de propina na República Dominicana Link
The Editor
Joe Palazzolo and
Rogerio Jelmayer at
Rogerio.Jelmayer@wsj.com
A sales consultant who says he paid bribes on behalf of aircraft maker Embraer SAtold Brazilian prosecutors that he believes the company’s top managers, including Chief Executive Frederico Curado, knew of the illicit payments, which were tied to the sale of military aircraft to the Dominican Republic.
Consultant Elio Moti Sonnenfeld’s cooperation with the prosecutors, which was revealed in official summaries of his statements reviewed by The Wall Street Journal, raises the stakes for Brazil-based Embraer, the world’s third-largest commercial aircraft manufacturer by sales, amid continuing investigations of the alleged bribery scheme.
In 2014, prosecutors in Brazil filed a criminal complaint against Mr. Sonnenfeld and eight former Embraer vice presidents, directors and managers, charging them with corruption and money laundering in connection with the scheme, which allegedly spanned 2008 to 2010.
Mr. Curado wasn’t named as a defendant and hasn’t been accused of any wrongdoing.
In a statement Wednesday, Embraer said it has given authorities its “full cooperation” in the case. Mr. Curado and the company declined to address Mr. Sonnenfeld’s allegations, saying the results of the company’s own investigation of the matter are confidential and have been reported to government investigators.
As previously reported, the Brazilian charges were based on evidence provided by U.S. prosecutors and regulators who have been investigating the company since at least 2010. Since then, Brazilian authorities have been developing their own evidence with an eye to charging more Embraer executives, according to people familiar with the matter.
Mr. Sonnenfeld told prosecutors last year that he received a $3.4 million commission from Embraer for work he never performed and passed it along as a bribe to a public official in the Dominican Republic, according to the official summaries of his statements. The alleged bribery, according to prosecutors, helped Embraer secure a $92 million contract in 2008 to sell that country eight turboprop attack support aircraft.
Mr. Sonnenfeld faced as many as eight years in prison if convicted on the corruption charges.?In February, a Brazilian judge dismissed the charges against him at the request of prosecutors, who cited his cooperation in the probe, said a person familiar with the matter.
Much of the evidence against Mr. Sonnenfeld, a person familiar with the matter said, was gathered by Embraer’s lawyers and turned over to U.S. authorities investigating the aircraft maker under the Foreign Corrupt Practices Act, which bars companies from bribing foreign officials. They, in turn, shared that evidence with their Brazilian counterparts, according to the person and law-enforcement documents.
Mr. Sonnenfeld told prosecutors that he believed “the decision to pay an unfair advantage in the Dominican Republic had been backed” by Mr. Curado, Embraer’s CEO since 2007, according to the official summaries.
He also said Embraer’s then-finance chief Luiz Carlos Aguiar and its general counsel at the time, Flavio Rimoli, both knowingly approved the commission Mr. Sonnenfeld used to pay off the Dominican official, according to the summaries.
Mr. Aguiar, who left the company in 2014 and is now chief executive of Brazil-based exporter CGG Trading, referred questions to Embraer. Mr. Rimoli, who left Embraer in 2013, didn’t reply to requests for comment made through Construtora Camargo Correa, the construction and engineering firm whose compliance department he now heads.
In its statement, Embraer said the apparent source of the consultant’s allegations was “a confidential statement from a defendant in a lawsuit that is under seal in Brazil and not available to the company.” It said that “for these reasons the company is unable to comment on the allegations.”
According to the summaries, Mr. Sonnenfeld told prosecutors he shared a deep history and a “relationship of trust” with Mr. Curado, whom he regularly dined with at Embraer’s offices in São Paulo and at air shows where the company courted business. The consultant told prosecutors he initially had no role in the Dominican sale, which was completed in 2008.
The 2014 criminal complaint alleges that executives involved in the scheme created a bogus consulting contract with a shell company controlled by the Dominican official, intending to disguise bribes as consulting fees, The complaint says Embraer’s internal-controls departments flagged the first $100,000 payment in April 2009 as suspicious, forcing the executives to come up with another way of generating the bribe money, so they turned to Mr. Sonnenfeld, whose history of working with the company would raise fewer red flags.
Mr. Sonnenfeld was engaged as Embraer’s sales representative in Jordan. His contract, according to the summaries and the criminal complaint, was the pretext for commission payments totaling $3.4 million that Mr. Sonnenfeld redirected to the Dominican official, according to the summaries and the criminal complaint.
In March 2010, Messrs. Aguiar and Rimoli signed Mr. Sonnenfeld’s contract despite what Mr. Sonnenfeld told prosecutors was its “extremely atypical” provision for advance payment of his commissions. They “would not have signed the contract without the approval of [CEO] Frederico Curado,” he said, according to the summaries.
Mr. Sonnenfeld said he never exchanged emails or discussed the Dominican scheme with either Mr. Aguiar or Mr. Rimoli.
He eventually met with Mr. Aguiar in 2012 to discuss the burgeoning foreign-bribery investigation by U.S. authorities. Embraer’s lawyers had been trying to reach Mr. Sonnenfeld to interview him.
“I did a favor for you, and you got me in trouble,” Mr. Sonnenfeld said he told Mr. Aguiar.
“But we never discussed this issue,” Mr. Sonnenfeld quoted Mr. Aguiar as saying. “Are you seeing now why it’s not good to write many emails?”
Related Material in portuguese
EUA e Brasil investigam negócio da Embraer com a República Dominicana 2013 Link
Embraer – MP acusa de suborno oito funcionários 2014 Link
Aguiar deixará Embraer Defesa e Segurança; Schneider assumirá – disse fonte 2013 Link
