The U.S. Department of Justice (DOJ) recently announced a new approach for the U.S. Foreign Corrupt Practices Act (FCPA). However, the indictments against the former Austrian banker Peter Weinzierl and other foreign bankers in the Odebrecht case are not based on violations of the FCPA. Instead, the DOJ charged Weinzierl and his co-defendant, Alexander Waldstein, with multiple counts of money laundering and related financial crimes under U.S. money laundering statutes (18 U.S.C. §§ 1956 and 1957).
Why Not the FCPA?
The DOJ did not pursue FCPA charges against Weinzierl and Waldstein because, as foreign bank executives who are neither U.S. citizens nor employees or agents of U.S. companies, they fall outside the FCPA’s jurisdiction. The FCPA primarily covers:
- U.S. citizens and residents,
- Officers, directors, employees, or agents of U.S. companies,
- Individuals who commit acts in furtherance of corrupt payments while in the U.S.
Since Weinzierl and Waldstein are Austrian citizens and their alleged misconduct occurred outside the U.S., they do not fit these categories. Therefore, the DOJ used money laundering statutes to prosecute them for their roles in facilitating the movement and concealment of bribe payments through the U.S. financial system.
The Charges Against Peter Weinzierl
Peter Weinzierl, the former CEO of Meinl Bank (Austria) and a director at Meinl Bank Antigua, is accused of:
- Conspiring to launder over $170 million in bribe payments for Odebrecht,
- Facilitating sham transactions and fraudulent contracts to move illicit funds through U.S. bank accounts,
- Helping Odebrecht create off-book slush funds used to pay bribes to government officials in Brazil, Panama, and Mexico.
Read our Odebrecht reports here.
The indictment details how these funds were routed through New York bank accounts and offshore entities to disguise their origins and purposes. Weinzierl faces multiple counts, including conspiracy to commit money laundering, international promotional money laundering, and spending criminally derived funds.
Odebrecht’s FCPA Plea
It is important to note that Odebrecht S.A. and its subsidiary Braskem did plead guilty to violating the FCPA in 2016, admitting to paying hundreds of millions of dollars in bribes to foreign officials and agreeing to pay approximately $3.5 billion in penalties to U.S., Brazilian, and Swiss authorities. However, these FCPA charges were directed at the companies themselves, not at foreign individuals like Weinzierl.
Summary Table: Charges Basis
| Defendant(s) | Charges Basis | FCPA Involved? | Statutes Used |
|---|---|---|---|
| Odebrecht, Braskem | FCPA violations | Yes | FCPA |
| Peter Weinzierl, et al | Money laundering, fraud | No | 18 U.S.C. §§ 1956, 1957 |
Conclusion
The indictments against Peter Weinzierl in the Odebrecht case are not based on the FCPA. Instead, they rely on U.S. money laundering statutes, as Weinzierl is outside the FCPA’s reach. The charges focus on his alleged role in facilitating the laundering of bribe payments through the U.S. financial system for Odebrecht’s benefit.
