UAE: FCPA violation Dolphin Energy

In the case of Control Components executives Mario Covino and Richard Morlok, both pled guilty in connection with making corrupt payments to officials at various state-owned enterprises, including the Dolphin Energy company in the United Arab Emirates and Safco in Saudi Arabia.

As with other cases, Covino and Morlok made payments to government officials, disguised as “commissions.” The payments were primarily made to individuals at the state-owned companies who had the power to direct business.

Of note, both individuals were alleged to have made specific false or misleading statements or undertook other actions to impede investigation into the alleged improper activity.

For instance, Morlok admitted to providing “false and misleading information to [the company’s] external auditors regarding his knowledge of and participation in improper payments” made to foreign officials.

Covino also admitted to having deleted emails and instructing others to delete emails that referred to the corrupt payments, for the purpose of obstructing the internal audit into the commission payments.

Underscoring the seriousness of FCPA penalties for individuals, both Covino and Morlok face up to five years in prison for these violations.