The Department of Justice announced January 6, that Dmitrij Harder, former owner and President of Chestnut Consulting Group Inc. and Chestnut Consulting Group Co. (generally referred to as the “Chestnut Group”) was indicted by a federal grand jury for his alleged participation in a scheme to pay bribes to a foreign official in violation of the Foreign Corrupt Practices Act (FCPA) and the Travel Act, and to launder proceeds of those crimes.

According to allegations in the indictment, the European Bank for Reconstruction and Development (EBRD) was a multilateral development bank headquartered in London, England, and was owned by over 60 sovereign nations. Among other things, the EBRD provided financing for development projects in emerging economies, primarily in Eastern Europe.

According to allegations in the indictment, Harder and others paid bribes for the benefit of a senior official at the EBRD in exchange for influencing the official’s actions on applications for financing submitted by the Chestnut Group’s clients and for directing business to the Chestnut Group. The EBRD ultimately approved applications for financing from two of the Chestnut Group’s corporate clients; the first resulted in the EBRD providing an $85 million investment and a 90 million Euro loan, while the second resulted in a $40 million investment and a $60 million convertible loan. The Chestnut Group allegedly earned approximately $8 million in “success fees” as a result of the EBRD’s approval of these two applications.

The indictment alleges that Harder made five payments totaling more than $3.5 million to the sister of the EBRD official, in part as an effort to conceal the bribes. These payments were allegedly made for purported consulting and other services provided to the Chestnut Group by the official’s sister, when in fact she provided no such services. Harder also allegedly participated in creating fake documents to justify these payments.

The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty. The Foreign Corrupt Practices Act is a federal law which mandates accounting transparency and prohibits companies from paying bribes to foreign government officials and political figures for the purpose of obtaining business. It is the first American law that gives full protection to foreign nationals for reporting bribes and contains extraordinary procedures for their protection.

Related links:

Information on filing a whistleblower rewards claim under the Foreign Corrupt Practices Act

If you have knowledge of Foreign Corrupt Practices Act violations and would like to know how Kohn, Kohn & Colapinto can help you with your case, please contact us .