Also indicted is an Indian American, Gajendra Lal.
By Deepak Chitnis
WASHINGTON, DC: An Indian lawmaker from Andhra Pradesh, an Indian national currently residing in the US, a Ukrainian business tycoon, and three others have been indicted by the US federal government under charges of corruption, conspiracy, and racketeering.
K.V.P. Ramachandra Rao, a Member of Parliament from Andhra Pradesh, and US-based Gajendra Lal, have been named in the suit that alleges they were part of a bribery scheme to allow a foreign company access to titanium mines within Andhra Pradesh. Dmitry Firtash, who also went by the aliases Dmytro Firtash and DF, was charged with orchestrating the scheme in order to secure profits for his conglomerate, Group DF Ltd.
The indictment contained five charges – one count each of racketeering conspiracy and money laundering conspiracy and two counts of interstate travel in aid of racketeering. Five defendants, excluding Rao, were charged with one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA). It was originally filed in June of last year, but was only unsealed today, on Wednesday.
According to the FBI, which conducted the investigation into the alleged criminal activity, all six men named in the indictment, conspired to pay at least $18.5 million in 2006 to secure mining contracts in Andhra Pradesh. The contracts were expected to generate around $500 million in revenue for all involved, including an unnamed “Company A,” headquartered in Chicago.
A Group DF company based in Switzerland, Bothli Trade AG, signed an agreement in April of 2006 with the Andhra Pradesh government to “set up a joint venture to mine various minerals, including ilmenite, a mineral that may be processed into various titanium-based products such as titanium sponges,” a porous mineral required to process titanium. A separate company under the conglomerate, Austria’s Ostchem Holdings, entered an agreement in 2007 alongside Bothli Trade AG, which allowed the latter company to supply 5-12 million pounds of titanium sponge from the Indian project to Company A on an annual basis.
Rao, 65, is an MP who “was an official of the state government of Andhra Pradesh and a close advisor to the now-deceased chief minister of the state of Andhra Pradesh, Y.S. Rajasekhara Reddy.” Lal, 50, is a US permanent resident who formerly resided in Winston-Salem, North Carolina. The three other men, aside from Firtash, are: Andras Knopp, 75, a Hungarian businessman; Suren Gevorgyan, 40, of Ukraine; and Periyasamy “Sunder” Sunderalingam, 60, of Sri Lanka.
Firtash was at the head of the entire scheme, with Knopp supervising it on a more routine basis. Knopp would set up meetings with all the other involved parties, keeping the scheme going and the money moving. Sunderalingam and Rao would allegedly also meet separately to discuss how much the bribe amounts should be, and would identify which bank accounts the money should be put into.
The indictment says that some 57 transfers of money took place as part of the scheme, between April 28, 2006 and July 13, 2010, totaling $10.59 million. The indictment is seeking “forfeiture from Firtash of his interests in Group DF Limited and its assets, including 14 companies registered in Austria and 18 companies registered in the British Virgin Islands, as well as 127 other companies registered in Cyprus, Germany, Hungary, the Netherlands, Seychelles, Switzerland, the United Kingdom, and one unknown jurisdiction and all funds in 41 bank accounts in several of those same countries,” and that the $10.59 million be returned.
Firtash was arrested last month, on March 12, in Vienna, Austria. He posted bail on March 21 to the tune of $174 million (or 125 Euros), and is free until his extradition hearings are through. The US is seeking to have him sent over to them, so that he can go to trial in the States. The rest of the defendants remain at large, with the FBI actively trying to track them down and bring them in.
“Fighting global corruption is part of the fabric of the Department of Justice,” said Acting Assistant Attorney General O’Neil. “The charges against six foreign nationals announced today send the unmistakable message that we will root out and attack foreign bribery and bring to justice those who improperly influence foreign officials, wherever we find them.”
Firtash’s camp has vigorously denied the allegations.