NDTX NEW DI CRIMINAL CASE COVER SHEET ev 10/10/2014 1. Defendant nformation 8-140R-4838-) © rane Devoe Arconative Lae cormionsutic gr nmeey: CD First name Middleman ED. wate Cla [Ew traanemtenudtameiou Inepreer: Ives Elvi ¥es aguas anor dat RECEIVED County in which ose was commited: why 50-40-20 Case number of Complaint eas: against this defendant “Se OR da Complaint was NOT filed, Date Target Letter was issued i this defendant on [ela target Lener was NOT issued. ‘irDetendant was charged by Isicment, Clerk is equsted to merge any Target Leer ease ater ta es wi sce BF atone) [ow (sy wl sive moti ointment) Case numberof prior or pending NDTX CR ease against this defendant: on [Pwo prior/pending CR case exis 2, Highest Level of Offense Charged Felony oiséemeanor [Jreuy Total numberof counts as to this defendant: <2 int number and level of offense for any charge lower than highest level: Location Status fot in custody In federal custody as of. in Con protest reaase Cin fetal adminnetive out Dita state custody 4. WarrantSummons Request Cowart )sumnons voluntary Appearance [Jin custody [summons requested, provide Defendant address: 5, Related Search Warrant Case La As/ict _ avsa sienarure: pam!IN THE UNITED STATES DISTRICT COURT 0 F583 FOR THE NORTHERN DISTRICT OF TEXAS 0 UNITED STATES OF AMERICA, Criminal No, 18 USC. §371 Conspiracy) ISUS.. § 784é-2 Foreign ‘Comupt Practices Act) DALLAS AIRMOTIVE, INC. Defendant es OmlACk- 49 3-1) INFORMATION ‘The United States exarges thet, at all times relevant this Information, unless otherwise stated: INTRODUCTION |. The Foreign Corupt Practices Act of 1977 (*FCPA"), as amended, Tile 15, United States Code, Sections 744-1, ef seq, was enacted by Congress forthe purpose of, mong other things, making it unlwfl for certain classes of persons and entities to at corruptly in furtherance of an offer, promise, authorization, or payment of money or anything of vale, Aireetly or indirectly, oa foreign government official forthe purpose of obisining of retaining busines foro directing bsines to, any person, 2, The defendant, Dallas Airmotive, Ine. DAM), was headquarered in Grapevine, “Texas, incorporated in Teas, and thas a “domestic concer,” as that em is wed inthe FCPA, Tile 15, United States Coa, Section 7844-2(H(1\(B). DAL was in the business of providing raft engine maintenanes, repr, and overhaul (“MRO”) services to customers in the United ‘States and abroad, Part of DAI's business was to service aircraft engines owned and operated by ‘8 number of governmental and other customers in Latin America including in Brazil, Argentina,and Peru, 3, Dallas Ainnotive do Brasil (*DAB"), headquartered in Belo Horizont, Brazil, asa corporate affiliate under the direction and contol of DAL. DAB assisted DAL in providing MRO engine services to cusiomers in Latin Americ including to governmental and other «ustomers. DAB also id on and secured engine sevice contracts wih Brazilian government and ‘commercial customers, the work for which was often dne n part by DAL, DAB’s employees were supervised and managed by director and manages at DAL. 4. “DAL Sales Director” was a regional sles diretor at DAL fom ino around 2004 to nor around 2013, DAI Sales Director was responsible for overseeing DAT's sales efforts in Latin Ameria 5. “DAI Sales Agent” was a regional sles manager at DAL fom ino around 2005 10 nor around 2009, From ino around 2009 unt n or around 2013, DAI Sales Agent was fist ‘national sales manager at DAB and later a general manager at DAB, working under the supervision of, and reporting to, DAL, DAL Seles Agent was responsible for obtaining and ‘etining MRO business fo DAI and DAB in Latin America, including with commercial and goverment customers 6. “DAISales Manager" was a regional sles manager at DAL from in or around 1999 jn or around 2011. DAL Seles Manager was responsible for obtaining and retaining MRO business for DAI in Latin America, including with commercial and government customer. 7. “DAB Maneaer A" was a general manager at DAB from ino eound 2009 ton ‘or around 2013, working urder the supervision of, and epoting to, DAL. DAB Manager A was responsible for obtaining ard retaining MRO business for DAI and DAB in Brazil inluding ‘with commercial and goverment customersDAB from in or 8. “DAB Manager B” was a sales and customer support manager around 2009 tn or aroune 2014, working under the supervision of, and reporting o, DAL DAB Manager 8 was responsible for obtaining and retaining MRO business for DAI and DAB in Brazil, including with government customers. 9. “The Fores Aérea Brasileira (the “Brazilian Air Force” or “BAF”) was one of three ‘national uniformed services of the Federative Republic of Brazil and an “agency” of a foreign ‘government, as that term is used in the FCPA, Title 15, United States Code, Section 78dd- 2(H)2). The BAF wasa customer of DAL 10, The Fuerza Aérea del Peru (the “Peruvian Air Force") was a branch ofthe Peruvian Armed Forees and an “agency” ofa foreign government, a that term is used in the FCPA, Title 5, United Staes Code, Section 78dd-2(4X2). The Peruvian Air Force was a customer of DAL 1. The Office f the Govemor of the Brazilian State of Roraima was “foreign government,” as that term i used in the FCPA, Tile 1S, United States Code, Section 784d- 2(h)2). The Office ofthe Govemor of Roreima was a customer of DAI and DAB. 12, The Office ofthe Governor ofthe Argentinean State of San Juan was a“frcign government,” as that term is used inthe FCPA, Title 15, United States Code, Section 784d 2(h2). The Office ofthe Governor of San Juan was a customer of DAL. 13, “Official 1" was a Sub-OfTicer inthe BAF who had the ability to influence the award of MRO business foDAL and DAB, Official 1 was a “foreign official” as that term is used in the FCPA, Title 15, United States Code, Setion 7844-2(0)(2). 1 “Ofte " was 8 Sergeant inthe BAF who had the ability to influence the award ‘of MRO business to DAI and DAB. Oficial 2 was a “foreign offical,” as that erm i used inthe FCPA, Title 15, United States Code, Section 784d-2(9)2), 15, “Official 3" was a Captain forthe Governor of the Brazilian sate of Rorsime who had te ability to influence the award of MRO business fo DAL and DAB. Official 3 was & “foreign official,” as that tam i used inthe FCPA, Title 1S, United States Code, Section 78dd- 20H. 16. “Pront Comoany A” was a Brazil-based sales and logistics services company that ‘was affiliated with Official. DAL and DAB made payments to Front Company A forthe purpose of disguising pyrrents to Oficial | in exchange for his assistance in seering MRO busines forthe benefit of DAT under a previously awarded master services agreement. 17, “Front Comsuny B" was a Brazib-based sales and logistics services company that ‘vas beneficially owned by Oficial 1. DAI and DAB made payment to Front Company B for the purpose of disguising payments to Official and Official 2 in exchange for thee assistance in securing MRO busines fo the benefit of DAL, 18, “Intermediary Company” was a Brazi-based company that was used to make payments for the benefit of Oficial 3 in exchange for his assistance in securing MRO business forthe benefit of DAL and DAB. ‘COUNT ONE (Conspiracy) 19, Paragraphs | through 18 ae realeged and incorporsted by reference as though fully se forth herein 20, From in or around 2008, and continuing through in or around 2012, in the ‘Northem District of Texas and elsewhere, the defendant, DALLAS AIRMOTIVE, INC. did willfully, thai, with he itent to further the objets ofthe conspiracy and knowingly conspire, confederate and agree with DAL Sales Director, DAI Sales Agent, DAL Sales Manager, DAB.Manager A, DAB Manager B, Official 1, Official 2, Offical 3, Font Company A, Front Company B, Intermediary Compan, and others, known and unknown, to commit an offense against the United States, that is, to. willfully make use of the mails and means and instrumentaltes of inerstte commerce corruptly in furtherance ofan afer, payment, promise to pay, and authorization of the payment of any money, offer, sift, promise 10 wive, and autho ation of the giving of anything of value, to a foreign official, and 10 8 person, while ‘knowing that all or a portion of such money and thing of value would be and had been offered, siven, and promised to a foreign official, for purposes of: (i) influencing acts and decisions of, such foreign official in his official capacity; i) inducing such foreign offical to do and omit to do acis in violation of the wu duty of such official (i) securing an improper advantage; and (Gv) inducing such foreign oficial to use his influence with a foreign government and agencies and insirumentalities thereof to affect and influence acts and decisions of such government and agencies and instrumentalies, in order to assist DAI and others in obtaining and retaining ‘business for and with, and directing business to, DAI and others, in violation of Title 1S, United States Code, Section 7846-22). PURPOSE OF THE CONSPIRACY, 21. The purpose of the conspiracy was to obtain and retain engine MRO service business for DAI and DAB from foreign goverment customers in Latin Americ, including the Brazilian Air Force, the Peruvian Air Force, the Office ofthe Governor of the Brazilian State of| Roraims and the Office ofthe Goveror ofthe Argentinean State of San Juan, by paying bribes to foreign officials employed by such customers,‘MANNER AND MEANS OF THE CONSPIRACY. 22. The manne and means by which DAI and its co-conspirators sought to accomplish the purpose ofthe conspiracy included, among oter things, the following 23, Dl, through is employees and agents, including employees of DAB, would and 4 diseuss in person and via electonic mail (e-mai") making bribe payments — which they called “commissions” oF “ensuing fees” — ond granting other benefits to employees of customers, including foreign government customers, in order to biain and retain for DAL and DAB business to perform engine MRO services. 24, Al, through is employees and agens including employees of DAB, would and id offer to pay, promise te pay and authorize the payment of money and otber benefits, directly and indict, and for te benefit of employees of foreign goverment customers, to help DAL and DAB obiain or retain MRO busines with the foreign government eustomers by which they were employed 25, DAL, through its employees and agents including employees of DAB, would and «id diseuss in person and ia e-mail the manner and means by which the bribe payments were to bbe made, including who stould be listed as owners and benefc sof Front Company A and Front Company B and the aames and locations ofthe bank accounts to which the bribe payments shouldbe transfered 26. DAL through is employees and agents, including employees of DAB, would and ‘id attempt to conceal the payments to foreign officials by using Front Company A. Front ‘Company B, and Intermediary Company to effectuate payments from DAI and DAB to Brazilian military officals27. DAL, through ts employees and agents, inching employees of DAB, would and Aid wire an eause to be wired certain bribe payments from DA's bank account in New York sand DAB's bank account in Belo Horizont, Brazil o bank accounts of Front Company A, Front Company B, and Intermediary Company in Bra 28. DAI, throu is employees and agents, including employes of DAB. would and 4id discuss in person and via e-mail 18 for a vacation for Official 2 and his spouse in exchange for Official 2s assistance in securing MRO business for DAL 29, DAI, throug) its employees and agents, including employees of DAB, would and 4id pay fora vacation for Official 2 and his spouse in exchange for Oficial 2's assistance in securing MRO business for DA 30, DAL through is employees and agents, would and did wire and cause tobe wired certain bribe payments from DAM's bank account in New York tothe bank aecount of a third party commercial represenutive in Miami, Florida, while knowing tha he funds, alas in pat, ‘would be passed to oficial ofthe Perwvian Air Fore 31. DAL througy is employees and agents, would and id wie and cause tobe wired certain bribe payments from DAM's bank acount in New York tothe bank acount of a third party commercial representative in Argentina, while knowing that the funds, atleast in part, would be passed to officials inthe office af the Govemor ofthe Argentinean State of San Juan OveRT ACTS 32, _Infrtherance of the conspiracy and to achieve its purpose and objec. at east one of the conspirators commited, nd eaused to be commited, in the Northern District of Texas, and elsewhere the following overt acts, among others33. On or about February 7, 2008, DAI Sales Agent sent an e-mail to DAI Sales Director and several other DAI employees, informing them of an increase inthe commission amount DAI was going to ray toa third-party commercial representative in Argentina in order to ‘enable the third party commercial representative to “pay to end user,” an individual inthe Office ‘ofthe Governor of San Juan, Argentina, «commission of $5,000 34. On or about March 11, 2008, DAI Sales Agent sent an email to DAL Sales Director anda third-party commercial representative regarding engine work forthe Goveror of San Juan, stating, as translated, “Ataced is the closing pic forthe Governments engines. 1 need your authorization to proceed with the rai.” 35. On or about Mareh 14,2008, the third-par commercial representative responded to the e-mail referenced in Paragraph 34 sbove, removing DAI Sales Direstor from the e-mail and stating thatthe work authorization estimate should buildin a $15,000 commission per engine 36. On or about March 27, 2008, in response to a mistaken addon of $3,000 to a Bal invoice relating toa previously awarded master services agreement, DAB Manager A sent an e-mail 0 8 DAL employee, co DAI Sales Director and DAL Sales Age, stating that they Should keep the addtional $3,000 in the invoice “Tor future needs, For example, as we discussed 1 will send [Official 1] to Dallas to explain us their log books, et. He is helping alot on the approvals.” 37, Inoraround July 2010, in response to DAL Sales Agents statement that Official 1 vas alloted with Front Company A and would receive the commissions paid to Front Compeny A, DAI Sales Ditetor instructed that 8 long as Official 1 was not on Front Company [A bylaws or was not the onner of Front Company A, there would be no problem.38. OnoraboutJuly 8, 2010, DAI Sales Agent sent en e-mail to Official 1, stating, as translated, “Please fill out with your companys information. The address must be in the same country as the address of your bank account. Lam waiting for this tobe completed so we can do the epresentation contrat with Front Company A] and start consulting immediately.” 39. On or abou! July 9, 2010, Official 1 forwarded bank information to DAI Sales ‘Agent, stating, as translated, “As per our conversation, I'm sending the company info. Don’t worry, the company here iy Rio shows my name asa partner and for that reason I wouldnt be able 10 do business ith you since (a previously awarded master services agreement between BAP and DAI], TCU [the Brazilian Court of Audit ofthe Union that is tasked wi public corruption] dosn't sllow, hahaha.” 40. On or about July 8, 2010, DAL Sales Agent responded to Official I's e-mail referenced in Paragraph 39 above, stating, as translated, “I need [the commercial finance director of Front Company A] to lout and sign the Form that I sent you and provide the banking information. 1 can only dothe contrast with him.” 41. On or about July 11, 2010, DAL Sales Agent forwarded the e-mail referenced in Paragraph 40 above to DAISoles Director and another DAL employe. 42, OnoraboutJuly 15,2010, DAI Sales Agent sent an e-mail to Front Company A's commercialfinance irctr, copying Official 1, and ataching ® proposed commerciel representation agreement between DAI and Front Company A that male no reference to oficial | 43. On or shout July 15, 2010, DAI Seles Director replied to an e-mail from DAT Sales Agent withthe subject line “RE: [Prot Company A] Account Info fer Commissions and Credit,” stating, “Who is geting commissions for engines that come to us from the BAF?”4A. On or about July 15, 2010, DAI Sales Agent responded tothe e-mail fom DAL Sales Director referenced ir Paragraph 43 above, stating, [Official 1, wil explain tonight.” 45. On or about July 29, 2010, DAB Manager B forwarded to DAI Sales Agent an ‘email that he had sent to Official 1 and Front Company A’s commercialMinance director, sttaching the modified contact with Front Company A. which again concealed Official Is involvement, stating, as translated, “here's [OM 1's) agreement, signed” 46. On or about August 2, 2010, DAI Sales Agent forwarded to DAL Ssles Director ‘and another DAL employee the e-mail referenced in Paragraph 45 above 47. Inor around August and September 2010, DAI Sales Director and DAI’s Head of International Sales signed the commercial representation agreement with Front Company A. 48. Onor about December 7, 2010, Official 3 sent an e-msl from his personal e-mail adress to DAB Manager B at his personal e-mail address, in which, as translated, Official 3 insiructed DAB Manager B to propre a pre-budgt of $300,000, after which various expenses would be added “for everything to total around $350,000, which was how much I tod the Gov [sie] this maintenance would cost, Send the budgets to me at [Oficial 3° personal e-mail address), unofficially (possible, both the actual and the “complete” budgets), so tat 1 can present itt the Gov [se] for information only. Sorry forthe request to use private e-mail but these issues involving amounts and decisions ae “sensitiv,” you are well aware ofthat, which is hy asked if there was dal like the “glorious one.” 49. Onor about February 8, 2011, Official | sent an e-mail from his personal ema adress to DAI Sales Agent requesting from DAI Sales Aget, a8 translated, “a favor [to] see ‘what the situation is conce-ing the commission a rnged on the billed engines. | want to make an investment here this month and I would like to have an estimate on the payments, if posible,”50, On or about March 2, 2011, DAB Mansger B forwarded to DAL Sales Agent and DAB Manager A the contact between DAI and Front Company A, sang, as translated, {Official 1's} contrac. Iti dated 9/3/2010 and signed by [DA's Head of Intemational Saes].” $1. On or about April 26, 2011, DAL Sales Agent set an esa wo DAB Manager A and DAB Manager B conceming @ commission requested by a thi party commercial representative regarding motors fom the Governor ofthe Brazilian state of Rortima, nating, a8 translated, “I donot want to pay twice and prefer to pay [the third pany commercial representative rd much fs that [OMTcial 3} eeivedovble..My ideas something easonble for [Official 3, much less han the equest.” 52. Onorsbout April 26,2011, retited Commander ofthe Peruvian Ait Force who worked for a thied party commercial representative Sent an e-mail © DAL Sales Manager, «copying DAL Sales Diretr andthe tied party commercial representative, stating, as transite, ‘that he scoured payment toDAI by the Peruvian Air Force and that “we have to share the agreed 1o commission withthe peple who have helped us.” 53. On or about April 28, 2011, the retied Commander of the Peruvian Air Force referenced in Paragraph $2 above sent an e-mail to DAL ales Director, copying DAL Sales Manager and the third pty commercial representative, withthe subject line “Payment of Commission," stating, a tanslted, “You know that Lam a retired Commander ofthe Air Force, 1 have flown @ fot, am highly regarded, | am friends with everyone jn [the Peruvian Ait Force), but Dallas Aimotve's delay in the agreed upon commission payment is hamming me since [have never faltered in complying with my promises. Lam extremely word, prinepally because there are 4 people hat call me every day for me to pay them what was agreed to, andthe‘gravest parti that we are losing work, because they don't solicit repairs ose of replacement parts” 54, On or about April 29, 2011, DAI Sales Director responded to the e-mail referenced in Paragraph 53 above, stating, “I am sorry forthe delay associated with this process but Lam aware that few tings changed slong the way [DAI Sales Manager and I are working ‘through this and we hope te have everything resolved by next week.” 155. On or about April 29, 2011, the retired Commander of the Peruvian Air Force responded to the e-mail referenced in Paragraph $4 sbove, stating, as translated“! was very happy to reveive your email, with this teply Lam confident n your word and wil ll my ends thatthe payment will ot b made late han next week.” 56. On oraboutNovernber 7, 2011, Oficial 2 sen an ema to DAB Manager B with te subject line “Transfer of Amounts,” asking DAB Manager B to confcm the deposits from invoices and noting, aS translated, that “I imagine there may have been some mistke inthe information because I didn't receive it yet. 57. On or about December 16, 2011, DA Sales Agent forwarded an e-mail to DAL Sales Director with the subject “FW: Nota [Official 2) stating, “on fa master services sgreement previously avaned by BAF to DAI] we are paying the trip for our main contact [Official 2} on [DAB Marager B's] expenses under DAB. This is for you to understand the ‘charges we try 10 recover on the engines we send.” Attached to the e-mail was an invoice for ait ‘travel that contained the names of Offical? and family members. 58. On or about December 16, 2011, DAL Sales Director responded to the e-mail referenced in Paragraph 57 above, tating, “Bien! Thank you forthe clarification.”59. On oF about January 3, 2012, DAB Manager B sent an email to Offiil 2 concerning the vacation fer Official 2 sponsored by DAB, stating a translated, “ell me, my friend, i everything alkigh there?? And the hotel is so-s0 or wort the expense??? I hope that y0U ae enjoying i” 60. On or shout January 4, 2012, Official 2 responded to the email referenced in Paragraph 59 above, st ngs tanslated, “When | sid 1 had confidence in your good taste, | confess that I underestimated you.hehe The Hotel was excellent. | believe that it was great present to [Official 2's wie. She insists om passing on thanks to you. Gret job, my good feenait™ 61. On or about February 5, 2012, DAB Manager B sent an e-mail to DAI Sales ‘Agent 1 propose a hid party commission of $20,000 for “Official I's] company.” ©2. On or about Februty 5, 2012, DAL Sales Agent responded to the e-mail referenced in Paragraph 6! above, stating that the payments to Front Company B were infact intended for Official 2. Allin violation of Tite 18, United States Code, Section 371 counrtwo (Foreign Corrupt Practices Act 63, Paragraphs | though 18 and 21 though 62 ae realleged and incorporated by reference as though fully st forth herein, 64. Oncor about Api 5, 2012 in the Norther Distt of Texas and elsewhere, the defendant, DALLAS AIRMOTIVE, INC. being a domestic concer, did knowingly make use of ‘the mails and means and instrumentalitis of inter te commerce corruptly in furtherance of an ‘offer, payment, promise to pay and authorization ofthe payment of money, offer, gf, promise to give, and authorization the giving ofenyting of vale foreign oficial, and toa person, 1hile knowing that or + portion of such money and hing of value would be and had! been coffred, piven, and promizd to a foreign offical, for purposes of: @) influencing acts and decisions of such foreign oficial in his oficial capacity (i) inducing such foreign official todo and omit to do acts in vioaion of the lawful duty of such official (i) securing an improper advantaze; and (iv) inducing such foreign off ial to use his influence with a foreign government and agencies and instrumentalities thereof to affect and influence acts and decisions of such overnment and agencies and insrumentaities, in order to assist DAI and others in obiaining and ret business for and with, and directing business to, DAL and others, t0 wit a wie teansfer in the amount of $35,000 from New’ Yark to Rio de Janeiro, Bra forthe benefit of Official 1 and Official 2, in exchange for thee assistance in providing engine MRO business to DAL Alin violation of Tile 15, United States Code, Section 7844-2, and Title 18, United States Code, Section 2. ‘SARAH R. SALDANA UNITED STATES ATTORNEY MICHAEL C. ELLIOTT ‘Assistant United States Atbrmey New York Bar 1100 Commerce Steet, Third Floor Dallas, Texas 75242-1699 Telephone: (214) 659-860 Facsimile: (214) 659-8803, yAVID rial Attorney lew York Bar United States Department of Justice