Telefonica Dpa And Associated Documents

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ATTACHMENT A 

STATEMENT OF FACTS 

The following Statement of Facts is incorporated by reference as part of the Deferred 

Prosecution Agreement (the “Agreement”) between the United States Department of Justice, 

Criminal Division, Fraud Section, the United States Attorney’s Office for the Southern District of 

New York, (collectively, the “United States”), and Telefónica Venezolana, C.A. (“Telefónica 

Venezolana”). Telefónica Venezolana hereby agrees and stipulates that the following information 

is true and accurate. Telefónica Venezolana admits, accepts, and acknowledges that it is 

responsible for the acts of its officers, directors, employees, and agents as set forth below. Should 

the United States pursue the prosecution that is deferred by this Agreement, Telefónica Venezolana 

agrees that it will neither contest the admissibility of, nor contradict, this Statement of Facts in any 

such proceeding. The following facts establish beyond a reasonable doubt the charges set forth in 

the criminal Information attached to this Agreement: 

Telefónica Venezolana and Relevant Entities and Individuals 

1. From in or around 2014 to in or around 2015 (the “Relevant Period”), Telefónica 

Venezolana was a telecommunications operator headquartered in Caracas, Venezuela that 

provided mobile phone services in Venezuela. During the Relevant Period, through multiple 

holding companies, Telefónica Venezolana was a wholly owned subsidiary of Telefónica, S.A. 

(“Telefónica”), a global telecommunications operator headquartered in Madrid, Spain. Since in or 

around 1987, Telefónica has traded its American Depositary Receipts (“ADRs”) on the New York 

Stock Exchange. Telefónica is therefore an “issuer,” as that term is defined in the Foreign Corrupt 

Practices Act (“FCPA”), Title 15, United States Code, Section 78dd-1(a).  

2. During the Relevant Period, Telefónica controlled, oversaw, and managed 



 

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Telefónica Venezolana’s operations, including the selection and employment of its senior officers. 

As such, Telefónica Venezolana was an “agent” of Telefónica in Venezuela, as that term is used 

in the FCPA, Title 15, United States Code, Section 78dd-1(a).  

3. “Executive-1,” whose identity is known to the United States and Telefónica 

Venezolana, served as a senior executive of Telefónica Venezolana, at the control and direction of 

Telefónica, during the Relevant Period. Executive-1 was therefore an “agent” of Telefónica, in 

Venezuela, as that term is used in the FCPA, Title 15, United States Code, Section 78dd-1(a).  

4. “Company-A” is the wholly owned Venezuelan subsidiary of a multinational 

telecommunications equipment and systems company, whose identity is known to the United 

States and Telefónica Venezolana. During the Relevant Period, Company-A was one of Telefónica 

Venezolana’s main suppliers of telecommunications infrastructure components and related 

equipment.  

5. “Company-A Executive,” whose identity is known to the United States and 

Telefónica Venezolana, had senior managerial responsibility for Company-A during the Relevant 

Period.  

6. “Company-A Employee,” whose identity is known to the United States and 

Telefónica Venezolana, served as an account manager for Company-A during the Relevant Period.  

7. “Company-B” is the wholly-owned Venezuelan subsidiary of another multinational 

telecommunications equipment and systems company, whose identity is known to the United 

States and Telefónica Venezolana. During the Relevant Period, Company-B was one of Telefónica 

Venezolana’s main suppliers of telecommunications infrastructure components and related 

equipment. 

8. “Company-B Employee,” whose identity is known to the United States and 



 

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Telefónica Venezolana, was an employee of Company-B. Company-B Employee served as an 

account manager for Company-B during the Relevant Period. 

9. “Company-C” is the United Arab Emirates-based subsidiary of a technology 

import-export company, whose identity is known to the United States and Telefónica Venezolana. 

Company-B designated Company-C as Company-B’s “integrator” for a series of sales from 

Company-B to Telefónica Venezolana during the Relevant Period. As the purported “integrator,” 

Company-C was responsible for configuring the hardware and software that Company-B sold for 

use in Telefónica Venezolana’s telecommunications network, to ensure that all components 

worked together.  

Foreign Government Entities and Officials 

10. “Foreign Official-1,” whose identity is known to the United States and Telefónica 

Venezolana, is a Venezuelan national who served as a high-ranking Venezuelan government 

official during the Relevant Period. Foreign Official-1 was therefore a “foreign official,” as that 

term is used in the FCPA, Title 15, United States Code, Section 78dd-1(f)(1). 

11. “Foreign Official-2,” whose identity is known to the United States and Telefónica 

Venezolana, is a Venezuelan national who served as a high-ranking Venezuelan government 

official during the Relevant Period. Foreign Official-2 was therefore a “foreign official,” as that 

term is used in the FCPA, Title 15, United States Code, Section 78dd-1(f)(1). 

Third Party Agents and Consultants 

12. “Intermediary-1,” whose identity is known to the United States and Telefónica 

Venezolana, is a Venezuelan national who solicited and received bribe payments from Telefónica 

Venezolana during the Relevant Period on behalf of, among others, Foreign Official-1 and Foreign 

Official-2.  



 

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13. “Shell Company-1,” whose identity is known to the United States and Telefónica 

Venezolana, was a shell company incorporated in Panama that was owned and controlled by 

Intermediary-1 during the Relevant Period and used, at least in part, for the benefit of Venezuelan 

government officials, including Foreign Official-1.  

14. “Intermediary-2,” whose identity is known to the United States and Telefónica 

Venezolana, is a Venezuelan national and a relative of Intermediary-1. During the Relevant Period, 

Intermediary-2 assisted Intermediary-1 in providing things of value to Foreign Official-1 and 

others.  

Overview of the Bribery Scheme 

15. During the Relevant Period, Telefónica Venezolana, through certain of its officers, 

employees, and agents, and while acting as an agent of Telefónica, together with its co-

conspirators, knowingly and willfully conspired and agreed with others to corruptly provide 

payments to, and for the benefit of, foreign officials in Venezuela, including Foreign Official-1 

and Foreign Official-2, to secure an improper advantage and to influence those foreign officials in 

order to obtain and retain business by receiving preferential access to U.S. dollars in a government-

sponsored currency auction that allowed Telefónica Venezolana to purchase equipment for its 

telecommunications network.  

16. Specifically, in or around 2014, Telefónica Venezolana participated in a currency 

auction in Venezuela that allowed Telefónica Venezolana to exchange its Venezuelan bolívars for 

U.S. dollars. To ensure its success in the auction, Telefónica Venezolana recruited two suppliers, 

Company-A and Company-B, to make approximately $28,870,099 in corrupt payments to 

Intermediary-1 and Shell Company-1 that were intended, at least in part, to benefit Venezuelan 

government officials, including Foreign Official-1 and Foreign Official-2. To conceal the bribe 



 

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payments, Telefónica Venezolana covered the cost of the bribes by agreeing to purchase 

equipment from Company-A and Company-B at inflated prices, using the U.S. currency obtained 

in the auction. 

17. Telefónica Venezolana knew that a significant portion of the approximately 

$28,870,099 would be paid as a “commission” that was intended, at least in part, for the benefit of 

Venezuelan government officials to influence the results of the currency auction. As a result of its 

corrupt payments, Telefónica Venezolana was permitted to exchange and subsequently received 

over $110 million through the currency auction, which it used to purchase equipment from 

Company-A and Company-B. 

18. In furtherance of the scheme, Telefónica Venezolana, together with others, utilized 

and caused the use of means and instrumentalities of interstate commerce to communicate with 

each other and other individuals regarding the scheme. The conspirators also routed corrupt 

payments totaling more than $22 million into and out of correspondent bank accounts at financial 

institutions in New York, New York.  

19. In total, in or around August 2014, the Venezuelan government awarded 

approximately $172,046,000 to 16 telecommunications companies as part of the currency auction. 

Between the two bids it corruptly orchestrated, Telefónica Venezolana received approximately 

65% of the total currency awarded in the auction. Telefónica Venezolana was able to deploy those 

funds (less the $28,870,099 paid to Intermediary-1 through Shell Company-1) to buy network 

equipment from Company-A and Company-B and thereby continue providing telecommunications 

services to customers in Venezuela. 



 

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Background on 2014 Currency Auction 

20. During the Relevant Period, Telefónica Venezolana was a major provider of 

telecommunications services to businesses and consumers in Venezuela. To provide such services, 

Telefónica Venezolana operated and maintained a telecommunications network throughout the 

country, which included towers, receivers, cables, and other infrastructure and equipment. 

Telefónica Venezolana relied on multinational companies, primarily Company-A and Company-

B, to supply the necessary equipment for its network. 

21. Since in or around the mid-2000s, the Venezuelan government, through the Banco 

Central de Venezuela (“Central Bank of Venezuela”), has maintained strict currency controls, 

including fixed official exchange rates for limited quantities of bolívars, to limit capital flight and 

support the value of the Venezuelan bolívar.  

22. Owing to the instability of the Venezuelan bolívar, Company-A and Company-B 

generally did not accept payment from Telefónica Venezolana in bolívars and instead required 

payment in stable currencies such as the U.S. dollar. By contrast, Telefónica Venezolana 

overwhelmingly collected payments from its customers in bolívars and developed significant 

bolívar reserves. Due to strict currency controls, however, Telefónica Venezolana was unable to 

exchange its bolívar reserves for stable currencies. This undermined Telefónica Venezolana’s 

ability to purchase necessary equipment from Company-A and Company-B to operate and 

maintain its telecommunications network. Starting at least in or around the early 2010s, Telefónica 

Venezolana’s network was aging and in disrepair.  

23. In or around 2013, the Venezuelan government began to sponsor currency 

exchanges (or “auctions”) that allowed domestic companies in critical industries to apply to 

exchange Venezuelan bolívars for U.S. dollars at favorable rates and in significant quantities. 



 

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These exchanges enabled domestic companies to import necessary goods and equipment from 

suppliers that would not accept payment in Venezuelan bolívars. 

24. In or around 2014, the Venezuelan government held a national currency exchange 

auction specifically for the telecommunications industry. The auction, administered through the 

Central Bank of Venezuela, was called the Sistema Complementario de Administración de Divisas 

(“SICAD”). Although called an “auction,” SICAD was in fact a selective government program 

through which the Venezuelan government chose: (i) which companies would receive access to 

foreign currency at favorable exchange rates; (ii) for which purposes or goods; and (iii) if awarded, 

how much currency a company would be permitted to exchange. To place a “bid” in the auction, 

a company had to submit an application that identified, among other things, which goods a 

company sought to purchase with the foreign currency, from which suppliers, using which customs 

codes, and at what cost. A company participating in the auction was also required to place in 

escrow bolívars corresponding to the cost of the goods they sought to import, at the favorable 

exchange rate designated by the SICAD. If successful, the Central Bank of Venezuela would wire 

the awarded U.S. dollars (or other stable currency) directly to the “winning” company’s suppliers 

and would debit corresponding amounts of escrowed bolívars from the winning company’s 

escrowed account. 

Telefónica Venezolana’s Corrupt Participation in the SICAD Auction 

Executive-1’s Meetings with  
Venezuelan Government Officials and Intermediary-1 

25. In or around May 2014, shortly before the SICAD auction was publicly announced, 

Executive-1 was summoned to an impromptu meeting with, among others, Foreign Official-1 and 

Foreign Official-2. In that meeting, Foreign Official-1 and Foreign Official-2 informed Executive-



 

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1, in substance and in part, that: (i) the Venezuelan government would soon be announcing a 

currency auction for the telecommunications industry (i.e., the SICAD auction); and (ii) Telefónica 

Venezolana would only be awarded U.S dollars through the auction if it paid a “commission” on 

any funds awarded, implying that the commission would personally benefit Foreign Official-1 and 

Foreign Official-2 (the “SICAD Meeting with Foreign Officials”). 

26. Shortly thereafter, at a social gathering, Intermediary-1 informed Executive-1, in 

substance and in part, that Intermediary-1 had spoken with Foreign Official-1 about the SICAD 

Meeting with Foreign Officials. Intermediary-1 reiterated to Executive-1, in substance and in part, 

that Telefónica Venezolana needed to pay “fees” if it wanted to succeed in the forthcoming SICAD 

auction. Intermediary-1 asked who Telefónica Venezolana’s largest suppliers were, and 

Executive-1 identified Company-A and Company-B.  

Company-A’s Participation in the Scheme at Telefónica Venezolana’s Direction  

27. In or around May or June 2014, shortly after the encounter with Intermediary-1, 

Executive-1 met with Company-A Executive, Company-A Employee, and others, and stated, in 

substance and in part, that the SICAD auction would soon be announced and requested Company-

A’s participation in the auction for the benefit of Telefónica Venezolana. In particular, Executive-

1 directed Company-A Executive and Company-A Employee to contact Intermediary-1 to 

facilitate Company-A’s participation in the auction.  

28. Shortly thereafter, Company-A Employee contacted Intermediary-1. After several 

meetings between Company-A employees and Intermediary-1 and Intermediary-1’s 

representatives, Company-A Employee provided Intermediary-1 with the necessary customs codes 

for the equipment that Telefónica Venezolana planned to buy from Company-A with the SICAD 

auction proceeds.  



 

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29. In or around July 2014, using their personal, U.S.-based email accounts, Company-

A Executive and Company-A Employee exchanged drafts of a “consultancy agreement” between 

Company-A’s parent company and an as-yet-unnamed counterparty, to be identified by 

Intermediary-1 once Telefónica Venezolana and Company-A’s “bid” in the SICAD auction was 

successful.  

30. In or around August 2014, Intermediary-1 informed Company-A Employee, in 

substance and in part, that the counterparty for the consultancy agreement would be Shell 

Company-1. At no time did Shell Company-1 or Intermediary-1 in fact perform any consultancy 

services for Telefónica Venezolana. 

31. On or about August 4, 2014, Intermediary-1 contacted Company-A Employee to 

relay, in substance and in part, that Company-A had been awarded “everything”—all the U.S. 

dollars—that it had applied for through the SICAD auction.  

32. Also on or about August 4, 2014, the Venezuelan government announced that 

Company-A had been awarded approximately $55,454,000 through the auction. On or about 

August 6, 2014, the Central Bank of Venezuela debited approximately 609,994,000 bolívars from 

Company-A’s bank account, as the funds that would be exchanged for the U.S. dollars awarded.  

33. On or about October 27, 2014, the Central Bank of Venezuela transferred 

approximately $55,454,000 to Company-A’s parent company through a correspondent bank 

located in the Southern District of New York.  

34. Beginning on or about November 26, 2014, through at least on or about 

December 2, 2014, an affiliate of Company-A transferred a total of approximately $13,863,473, 

representing 25% of the $55,454,000 awarded to Company-A through the auction, to Shell 

Company-1’s bank account in Luxembourg. Several of the transactions comprising the 



 

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$13,863,473 to Shell Company-1 transited through correspondent banks located in the Southern 

District of New York.  

35. Company-A used most of the $55,454,000 obtained from the SICAD auction as 

payment from Telefónica Venezolana for network equipment. Telefónica Venezolana reimbursed 

Company-A for the corrupt payments of $13,863,473 to Shell Company-1 by inflating the per-unit 

cost of the equipment that Telefónica Venezolana purchased from Company-A. 

Company-B’s Involvement in the SICAD Auction 

36. In or around May or June 2014, Executive-1 coordinated with representatives of 

Company-B to use Intermediary-1 to facilitate Company-B’s participation in the upcoming SICAD 

auction.  

37. Between in or around May 2014 and July 2014, Telefónica Venezolana and 

Company-B agreed, among other things, that Telefónica Venezolana would directly participate in 

the SICAD auction and that the auction proceeds awarded to Telefónica Venezolana would be 

used to purchase network equipment from Company-B.  

38. In or around June and July 2014, Company-B Employee exchanged emails with 

Intermediary-1 and Intermediary-2 concerning, in part, Telefónica Venezolana purchasing 

equipment from Company-B with the SICAD auction proceeds. Attachments to these emails 

indicate, in substance and in part, that Company-B’s prices were inflated such that Telefónica 

Venezolana would bear the cost of the bribes. In or around July 2014, Company-B Employee 

shared versions of these attachments with Telefónica Venezolana employees. 

39. On or about August 4, 2014, the Venezuelan government announced that 

Telefónica Venezolana had been awarded approximately $60,027,000 through the auction. In or 

around August 2014, the Central Bank of Venezuela debited approximately 660,291,563 bolívars 



 

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from Telefónica Venezolana’s bank account, as the funds that would be exchanged for the U.S. 

dollars awarded. 

40. On or about August 18, 2014, Telefónica Venezolana entered a contract with 

Company-C—acting on behalf of Company-B as its purported network integrator—for the 

purchase of network equipment. In fact, Company-C never performed any services for Company-

B. 

41. On or about September 3, 2014, the Central Bank of Venezuela transferred 

approximately $60,026,505.73 to Company-C through a correspondent bank located in the 

Southern District of New York.  

42. On or about September 24, 2014, Company-C and Shell Company-1 entered into a 

purported “Commission Agreement” according to which Shell Company-1 would act as a 

“consultant” for the “Procurement of Communications Equipment for TELEFONICA 

VENEZOLANA, C.A.”  

43. On or about September 30, 2014, Shell Company-1 issued an invoice to Company-

C for “fees” for $15,006,750. 

44. On or about October 28, 2014, Company-C transferred approximately $15,006,626, 

representing 25% of the funds awarded to Telefónica Venezolana in the SICAD auction, to Shell 

Company-1’s bank account in Luxembourg. This transaction went through a correspondent bank 

located in the Southern District of New York.  

45. Company-B and Company-C used the $60,027,000 in auction proceeds as payment 

from Telefónica Venezolana for network equipment. Telefónica Venezolana bore the cost of the 

$15,006,626 payment to Shell Company-1 by inflating the costs of the network equipment that 

Telefónica Venezolana purchased from Company-B through Company-C. 



 

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Benefits to Foreign Officials 

46. During the Relevant Period, Intermediary-1, Intermediary-2, and others, known and 

unknown, comingled the bribes related to the purchase of Telefónica Venezolana’s 

telecommunications equipment with other funds and then paid for the lavish expenses of Foreign 

Official-1 and Foreign Official-1’s family.  

47. For example, beginning in or around December 2014 through at least January 2015, 

soon after Shell Company-1 received the payments that were intended, at least in part, as bribes, 

Intermediary-1 spent more than $500,000 on a lavish vacation in Saint Barthélemy for 

Intermediary-1, Foreign Official-1, and members of their respective families.  

48. Additionally, in or around January 2015, using some of the corrupt proceeds 

received through Shell Company-1, Intermediary-1 spent approximately $605,000 on luxury 

watches and jewelry in Saint Barthélemy, including for the benefit of Foreign Official-1 and 

Foreign Official-1’s spouse.10-21-2024







10-21-2024



 

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ATTACHMENT C 

CORPORATE COMPLIANCE PROGRAM 

 In order to address any deficiencies in their internal controls, compliance code, policies, 

and procedures regarding compliance with the Foreign Corrupt Practices Act (“FCPA”), 15 U.S.C. 

§§ 78dd-1, et seq., and other applicable anti-corruption laws, Telefónica Venezolana, C.A. and 

Telefónica, S.A. (the “Companies”) agree to continue to conduct, in a manner consistent with all 

of their obligations under this Agreement, appropriate reviews of their existing internal controls, 

policies, and procedures.   

 Where necessary and appropriate, the Companies agree to modify their compliance 

program, including internal controls, compliance policies, and procedures in order to ensure that 

they maintain: (a) an effective system of internal accounting controls designed to ensure the 

making and keeping of fair and accurate books, records, and accounts; and (b) a rigorous 

compliance program that incorporates relevant internal accounting controls, as well as policies and 

procedures designed to effectively detect and deter violations of the FCPA and other applicable 

anti-corruption laws (collectively, the “anti-corruption laws,”).  At a minimum, this should include, 

but not be limited to, the following elements to the extent they are not already part of the 

Companies’ existing internal controls, compliance code, policies, and procedures: 

Commitment to Compliance 

1. The Companies will ensure that their directors and senior management provide 

strong, explicit, and visible support and commitment to compliance with their corporate policy 

against violations of the anti-corruption laws, their compliance policies, and their Code of 

Conduct, and demonstrate rigorous support for compliance principles via their actions and words. 



 

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2. The Companies will ensure that mid-level management throughout their 

organization reinforce leadership’s commitment to compliance policies and principles and 

encourage employees to abide by them.  The Companies will create and foster a culture of ethics 

and compliance with the law in their day-to-day operations at all levels of the Companies.   

Periodic Risk Assessment and Review 

3. The Companies will implement a risk management process to identify, analyze, 

and address the individual circumstances of the Companies, in particular the foreign bribery risks 

facing the Companies.   

4. On the basis of their periodic risk assessment, the Companies shall take appropriate 

steps to design, implement, or modify each element of their compliance program to reduce the risk 

of violations of the anti-corruption laws, their compliance policies, and their Code of Conduct.    

Policies and Procedures 

5. The Companies will develop and promulgate a clearly articulated and visible 

corporate policy against violations of the anti-corruption laws, which shall be memorialized in a 

written compliance policy or policies. 

6. The Companies will develop and promulgate compliance policies and procedures 

designed to reduce the prospect of violations of the anti-corruption laws and the Companies’ 

compliance policies and Code of Conduct, and the Companies will take appropriate measures to 

encourage and support the observance of ethics and compliance policies and procedures against 

violation of the anti-corruption laws by personnel at all levels of the Companies.  These anti-

corruption policies and procedures shall apply to all directors, officers, and employees and, where 

necessary and appropriate, outside parties acting on behalf of the Companies in a foreign 



 

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jurisdiction, including all agents and business partners.  The Companies shall notify all employees 

that compliance with the policies and procedures is the duty of individuals at all levels of the 

Companies.  Such policies and procedures shall address: 

a. gifts; 

b. hospitality, entertainment, and expenses; 

c. customer travel; 

d. political contributions; 

e. charitable donations and sponsorships; 

f. facilitation payments; and 

g. solicitation and extortion. 

7. The Companies will ensure that they have a system of financial and accounting 

procedures, including a system of internal controls, reasonably designed to ensure the maintenance 

of fair and accurate books, records, and accounts.  This system should be designed to provide 

reasonable assurances that:  

a. transactions are executed in accordance with management’s general or 

specific authorization; 

b. transactions are recorded as necessary to permit preparation of financial 

statements in conformity with generally accepted accounting principles or any other criteria 

applicable to such statements, and to maintain accountability for assets;  

c. access to assets is permitted only in accordance with management’s general 

or specific authorization; and 



 

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d. the recorded accountability for assets is compared with the existing assets 

at reasonable intervals and appropriate action is taken with respect to any differences.    

8. The Companies shall review their anti-corruption compliance policies and 

procedures as necessary to address changing and emerging risks and update them as appropriate 

to ensure their continued effectiveness, taking into account relevant developments in the field and 

evolving international and industry standards. 

Independent, Autonomous, and Empowered Oversight 

9. The Companies will assign responsibility to one or more senior corporate 

executives of the Companies for the implementation and oversight of the Companies’ anti-

corruption compliance policies and procedures.  Such corporate official(s) shall have the authority 

to report directly to independent monitoring bodies, including internal audit, the Companies’ 

Board of Directors, or any appropriate committee of the Companies’ Board of Directors, and shall 

have an adequate level of autonomy from management as well as sufficient resources, authority, 

and support from senior leadership to maintain such autonomy. 

Training and Guidance 

10. The Companies will implement mechanisms designed to ensure that their Code of 

Conduct and anti-corruption compliance policies and procedures are effectively communicated to 

all directors, officers, employees, and, where necessary and appropriate, agents and business 

partners.  These mechanisms shall include: (a) periodic training for all directors and officers, all 

employees in positions of leadership or trust, positions that require such training (e.g., internal 

audit, sales, legal, compliance, finance), or positions that otherwise pose a corruption risk to the 

Companies, and, where necessary and appropriate, agents and business partners; and (b) metrics 



 

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for measuring knowledge retention and effectiveness of the training.  The Companies will conduct 

training in a manner tailored to the audience’s size, sophistication, or subject matter expertise and, 

where appropriate, will discuss prior compliance incidents. 

11. The Companies will maintain, or where necessary establish, an effective system 

for providing guidance and advice to directors, officers, employees, and, where necessary and 

appropriate, agents and business partners, on complying with the Companies’ anti-corruption 

compliance policies and procedures, including when they need advice on an urgent basis or in any 

foreign jurisdiction in which the Companies operate. 

Confidential Reporting Structure and Investigation of Misconduct 

12. The Companies will maintain, or where necessary establish, an effective system 

for internal and, where possible, confidential reporting by, and protection of, directors, officers, 

employees, and, where appropriate, agents and business partners concerning violations of the 

Companies’ Code of Conduct or anti-corruption compliance policies and procedures and 

protection of directors, officers, employees, and, where appropriate, agents and business partners 

who make such reports. To ensure effectiveness, the Companies commit to following applicable 

anti-retaliation and whistleblower protection laws, and to appropriately training employees on such 

laws. 

13. The Companies will maintain, or where necessary establish, an effective and 

reliable process with sufficient resources for responding to, investigating, and documenting 

allegations of violations of the anti-corruption laws or the Companies’ anti-corruption compliance 

policies and procedures. 



 

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Compensation Structures and Consequence Management 

14. The Companies will implement clear mechanisms to incentivize behavior amongst 

all directors, officers, employees, and, where necessary and appropriate, parties acting on behalf 

of the Companies, in compliance with their corporate policy against violations of the anti-

corruption laws, their compliance policies, and their Code of Conduct.  These incentives shall 

include, but shall not be limited to, the implementation of criteria related to compliance in the 

Companies’ compensation and bonus system. 

15. The Companies will institute appropriate disciplinary procedures to address, 

among other things, violations of the anti-corruption laws and the Companies’ Code of Conduct 

and anti-corruption compliance policies and procedures by the Companies’ directors, officers, and 

employees.  Such procedures should be applied consistently and fairly, regardless of the position 

held by, or perceived importance of, the director, officer, or employee.  The Companies shall 

implement procedures to ensure that, where misconduct is discovered, reasonable steps are taken 

to remedy the harm resulting from such misconduct, and to ensure that appropriate steps are taken 

to prevent further similar misconduct, including assessing the internal controls, Code of Conduct, 

and compliance policies and procedures and making modifications necessary to ensure the overall 

anti-corruption compliance program is effective. 

Third-Party Management 

16. The Companies will institute appropriate risk-based due diligence and compliance 

requirements pertaining to the retention and oversight of all agents and business partners, 

including: 



 

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a. properly documented due diligence pertaining to the hiring and appropriate 

and regular oversight of agents and business partners; 

b. informing agents and business partners of the Companies’ commitment to 

abiding by anti-corruption laws, and of the Companies’ Code of Conduct and anti-corruption 

compliance policies and procedures; and 

c. seeking a reciprocal commitment from agents and business partners. 

17. The Companies will understand and record the business rationale for using a third 

party in a transaction, and will conduct adequate due diligence with respect to the risks posed by 

a third-party partner such as a third-party partner’s reputations and relationships, if any, with 

foreign officials. The Companies will ensure that contract terms with third parties specifically 

describe the services to be performed, that the third party is actually performing the described 

work, and that its compensation is commensurate with the work being provided in that industry 

and geographical region. The Companies will engage in ongoing monitoring and risk management 

of third-party relationships through updated due diligence, training, audits, and/or annual 

compliance certifications by the third party. 

18. Where necessary and appropriate, the Companies will include standard provisions 

in agreements, contracts, and renewals thereof with all agents and business partners that are 

reasonably calculated to prevent violations of the anti-corruption laws, which may, depending 

upon the circumstances, include:  (a) anti-corruption representations and undertakings relating to 

compliance with the anti-corruption laws; (b) rights to conduct audits of the books and records of 

the agent or business partner to ensure compliance with the foregoing; and (c) rights to terminate 

an agent or business partner as a result of any breach of the anti-corruption laws, the Companies’ 



 

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Code of Conduct or compliance policies, or procedures, or the representations and undertakings 

related to such matters. 

Mergers and Acquisitions 

19. The Companies will develop and implement policies and procedures for mergers 

and acquisitions requiring that the Companies conduct appropriate risk-based due diligence on 

potential new business entities, including appropriate FCPA and anti-corruption due diligence by 

legal, accounting, and compliance personnel.   

20. The Companies will ensure that the Companies’ Code of Conduct and compliance 

policies and procedures regarding the anti-corruption laws apply as quickly as is practicable to 

newly acquired businesses or entities merged with the Companies and will promptly: 

a. train the directors, officers, employees, agents, and business partners 

consistent with Paragraph 10 above on the anti-corruption laws and the Companies’ compliance 

policies and procedures regarding anti-corruption laws;  

b. where warranted, conduct an FCPA-specific audit of all newly acquired or 

merged businesses as quickly as practicable; 

c. where warranted, establish a plan to integrate the acquired businesses or 

entities into the Companies’ enterprise resource planning systems as quickly as practicable.  

Monitoring and Testing 

21. The Companies will conduct periodic reviews and testing of all elements of their 

compliance programs to evaluate and improve their effectiveness in preventing and detecting 

violations of anti-corruption laws and the Companies’ Code of Conduct and anti-corruption 



 

C-9 
 

compliance policies and procedures, taking into account relevant developments in the field and 

evolving international and industry standards.  

22. The Companies will ensure that compliance and control personnel have sufficient 

direct or indirect access to relevant sources of data to allow for timely and effective monitoring 

and/or testing of transactions.  

Analysis and Remediation of Misconduct 

23. The Companies will conduct a root cause analysis of misconduct, including prior 

misconduct, to identify any systemic issues and/or any control failures.  The Companies will timely 

and appropriately remediate the root causes of misconduct.  The Companies will ensure that root 

causes, including systemic issues and controls failures, and relevant remediation are shared with 

management as appropriate.  

 

 



D-1 

ATTACHMENT D 

COMPLIANCE REPORTING REQUIREMENTS 

Telefónica Venezolana, C.A. and Telefónica, S.A. (the “Companies”) agree that they will 

report to the United States Department of Justice, Criminal Division, Fraud Section and the United 

States Attorney’s Office for the Southern District of New York (the “Fraud Section and the 

Office”) periodically.  During the Term, the Companies shall review, test, and update their 

compliance program and internal controls, policies, and procedures described in Attachment C.  

The Companies shall be required to: (i) conduct an initial (“first”) review and submit a first report 

and (ii) conduct and prepare at least two follow-up reviews and reports, as described below.  Prior 

to conducting each review, the Companies shall be required to prepare and submit a workplan for 

the review.   

In conducting the reviews, the Companies shall undertake the following activities, among 

others: (a) inspection of relevant documents, including the Companies’ current policies,  

procedures, and training materials concerning compliance with the FCPA and other applicable 

anti-corruption laws; (b) inspection and testing of the Companies’ systems procedures, and internal 

controls,  including record-keeping and internal audit procedures at sample sites; (c) meetings with, 

and interviews of, relevant current and, where appropriate, former directors, officers, employees, 

business partners, agents, and other persons; and (d) analyses, studies, and comprehensive testing 

of the Companies’ compliance program.    

Written Work Plans, Reviews and Reports 

1. The Companies shall conduct a first review and prepare a first report, followed by 

at least two follow-up reviews and reports.   



D-2 

2. Within sixty (60) calendar days of the date this Agreement is executed, the 

Companies shall, after consultation with the Fraud Section and the Office, prepare and submit a 

written work plan to address the Companies’ first review.  The Fraud Section and the Office shall 

have thirty (30) calendar days after receipt of the written work plan to provide comments.   

3. With respect to each follow-up review and report, after consultation with the Fraud 

Section and the Office, the Companies shall prepare a written work plan within forty-five (45) 

calendar days of the submission of the prior report, and the Fraud Section and the Office shall 

provide comments within thirty (30) calendar days after receipt of the written work plan. 

4. All written work plans shall identify with reasonable specificity the activities the 

Companies plans to undertake to review and test each element of their compliance program, as 

described in Attachment C.     

5. Any disputes between the Companies and the Fraud Section and the Office with 

respect to any written work plan shall be decided by the Fraud Section and the Office in their sole 

discretion.   

6. No later than one year from the date this Agreement is executed, the Companies 

shall submit to the Fraud Section and the Office a written report setting forth: (1) a complete 

description of their remediation efforts to date; (2) a complete description of the testing conducted 

to evaluate the effectiveness of the compliance program and the results of that testing; and (3) their 

proposals to ensure that their compliance program is reasonably designed, implemented, and 

enforced so that the program is effective in deterring and detecting violations of the FCPA and 

other applicable anti-corruption laws.  The report shall be transmitted to:  

Deputy Chief – FCPA Unit 

Deputy Chief – CECP Unit  

Criminal Division, Fraud Section 



D-3 

U.S. Department of Justice  

1400 New York Avenue, NW  

Bond Building, Eleventh Floor  

Washington, DC 20005  

 

Chief, Complex Frauds & Cybercrime Section,  

United States Attorney’s Office for the Southern District of New York,  

26 Federal Plaza, 37th Floor  

New York, NY 10278 

 

The Companies may extend the time period for issuance of the first report with prior written 

approval of the Fraud Section and the Office. 

Follow-up Reviews and Reports 

7. The Companies shall undertake at least two follow-up reviews and reports, 

incorporating the views of the Fraud Section and the Office on the Companies’ prior reviews and 

reports, to further monitor and assess whether the Companies’ compliance program is reasonably 

designed, implemented, and enforced so that it is effective at deterring and detecting violations of 

the FCPA and other applicable anti-corruption laws. 

8. The first follow-up (“second”) review and report shall be completed by no later 

than one year after the first report is submitted to the Fraud Section and the Office.   

9.  The second follow-up (“third”) report shall be completed and delivered to the 

Fraud Section and the Office no later than thirty (30) days before the end of the Term. 

10. The Companies may extend the time period for submission of any of the follow-up 

reports with prior written approval of the Fraud Section and the Office. 

Confidentiality of Submissions 

11. Submissions by the Companies, including the work plans and reports, will likely 

include proprietary, financial, confidential, and competitive business information.  Moreover, 

public disclosure of the submissions could discourage cooperation, impede pending or potential 



D-4 

government investigations and thus undermine the objectives of the reporting requirement. For 

these reasons, among others, the submissions and the contents thereof are intended to remain and 

shall remain non-public, except as otherwise agreed to by the parties in writing, or except to the 

extent the Fraud Section and the Office determine in their sole discretion that disclosure would be 

in furtherance of the Fraud Section’s and the Office’s discharge of their duties and responsibilities 

or is otherwise required by law. 

   

 



E-1 

ATTACHMENT E 

CERTIFICATION 

 

To: United States Department of Justice 

 Criminal Division, Fraud Section 

 Attention: Chief of the Fraud Section 

 

 

          United States Department of Justice 

          United States Attorney’s Office for the Southern District of New York  

          Attention: United States Attorney for the Southern District of New York 

      

 
 

Re:   Deferred Prosecution Agreement Disclosure Certification 

 

The undersigned certify, pursuant to Paragraph 21 of the Deferred Prosecution Agreement 

(“the Agreement”) filed on [DATE] in the United States District Court for the Southern District of 

New York, by and between the United States of America, Telefónica Venezolana, C.A., and 

Telefónica, S.A. (the “Companies”), that the undersigned are aware of the Companies’ disclosure 

obligations under Paragraphs 5 and 6 of the Agreement, and that the Companies have disclosed to 

the United States Department of Justice, Criminal Division, Fraud Section and the United States 

Attorney’s Office for the Southern District of New York (collectively, the “Offices”) any and all 

evidence or allegations of conduct required pursuant to Paragraphs 5 and 6 of the Agreement, 

which includes evidence or allegations of any violation of the anti-bribery or accounting provisions 

of the Foreign Corrupt Practices Act of 1977 (“FCPA”), as amended, Title 15, United States Code, 

Section 78dd-1, or the Foreign Extortion Prevention Act (“FEPA”) had the conduct occurred 

within the jurisdiction of the United States, committed by the Companies’ employees or agents 

(“Disclosable Information”).  This obligation to disclose information extends to any and all 

Disclosable Information that has been identified through the Companies’ compliance and controls 

program, whistleblower channel, internal audit reports, due diligence procedures, investigation 



E-2 

process, or other processes.  The undersigned further acknowledge and agree that the reporting 

requirements contained in Paragraphs 5 and 6 and the representations contained in this certification 

constitute a significant and important component of the Agreement and of the Offices’ 

determination whether the Companies have satisfied their obligations under the Agreement. 

The undersigned hereby certify that they are respectively the Chief Executive Officer and 

Chief Finance Officer of Telefónica, S.A. and the Chief Executive Officer and Chief Finance 

Officer of Telefónica Venezolana, C.A., and that each has been duly authorized by the Companies 

to sign this Certification on behalf of the Companies.  

This Certification shall constitute a material statement and representation by the 

undersigned and by, on behalf of, and for the benefit of, the Companies to the executive branch of 

the United States for purposes of 18 U.S.C. § 1001, and such material statement and representation 

shall be deemed to have been made in the Southern District of New York.  This Certification shall 

also constitute a record, document, or tangible object in connection with a matter within the 

jurisdiction of a department and agency of the United States for purposes of 18 U.S.C. § 1519, and 

such record, document, or tangible object shall be deemed to have been made in the Southern 

District of New York. 

 

 

  



E-3 

Date: _____________________ Name (Printed): __________________________________ 

      

 

Name (Signed): __________________________________

 Chief Executive Officer 

     Telefónica, S.A. 

 

 

Date: _____________________ Name (Printed): __________________________________ 

      

 

Name (Signed): __________________________________

 Chief Financial Officer 

     Telefónica, S.A. 

 

 

Date: _____________________ Name (Printed): __________________________________ 

      

 

Name (Signed): __________________________________

 Chief Executive Officer 

     Telefónica Venezolana, C.A. 

 

 

Date: _____________________ Name (Printed): __________________________________ 

      

 

Name (Signed): __________________________________

 Chief Financial Officer 

     Telefónica Venezolana, C.A.UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 

UNITED STATES OF AMERICA 

v. 

TELEFÓNICA VENEZOLANA, C.A., 

                           Defendant. 

SEALED NOTICE OF INTENT TO  

FILE AN INFORMATION  

Please take notice that the United States Attorney’s Office will file an Information upon 

the defendant’s waiver of Indictment, pursuant to Rule 7(b) of the Federal Rules of Criminal 

Procedure.  

Furthermore, I have reviewed Judge Garnett’s Individual Rules for matters involving the 

U.S. Attorney’s Office, and the relevant records, and Judge Garnett is recused from this matter. 

Dated: New York, New York 
October 29, 2024 

DAMIAN WILLIAMS 
United States Attorney  

By: _____________________________ 
Jilan J. Kamal 
Assistant United States Attorney 

AGREED AND CONSENTED TO: 

By: _____________________________ 
Berge Setrakian, Esq. 
Eric Christofferson, Esq. 
John Hillebrecht, Esq. 
Attorneys for Telefónica Venezolana, C.A. 



UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 
 
UNITED STATES OF AMERICA 
 

v. 
 
TELEFÓNICA VENEZOLANA, C.A., 
 
                                       Defendant. 
 

        
      INFORMATION 
 
       24 Cr. 
  

 
The United States charges: 

GENERAL ALLEGATIONS 

Relevant Statutory Background 

1. The Foreign Corrupt Practices Act of 1977, as amended, Title 15, United States 

Code, Sections 78dd-1, et seq. (“FCPA”), was enacted by Congress for the purpose of, among 

other things, making it unlawful to act corruptly in furtherance of an offer, promise, authorization, 

or payment of money or anything of value, directly or indirectly, to a foreign official for the 

purpose of obtaining or retaining business for, or directing any business to, any person. 

TELEFÓNICA VENEZOLANA and Relevant Entities and Individuals 

2. From in or around 2014 to in or around 2015 (the “Relevant Period”), 

TELEFÓNICA VENEZOLANA, C.A. (“TELEFÓNICA VENEZOLANA”), the defendant, was a 

telecommunications operator headquartered in Caracas, Venezuela, that provided mobile phone 

services in Venezuela. During the Relevant Period, through multiple holding companies, 

TELEFÓNICA VENEZOLANA was a wholly owned subsidiary of Telefónica, S.A. 

(“Telefónica”), a global telecommunications operator headquartered in Madrid, Spain. Since in or 

around 1987, Telefónica has traded its American Depositary Receipts (“ADRs”) on the New York 



2 
 

Stock Exchange. Telefónica is therefore an “issuer,” as that term is defined in the FCPA, Title 15, 

United States Code, Section 78dd-1(a).  

3. During the Relevant Period, Telefónica controlled, oversaw, and managed 

TELEFÓNICA VENEZOLANA, the defendant, including the selection and employment of its 

senior officers. As such, TELEFÓNICA VENEZOLANA was an “agent” of Telefónica in 

Venezuela, as that term is used in the FCPA, Title 15, United States Code, Section 78dd-1(a).  

4. “Executive-1,” whose identity is known to the United States and TELEFÓNICA 

VENEZOLANA, the defendant, served as a senior executive of TELEFÓNICA VENEZOLANA, 

at the control and direction of Telefónica, during the Relevant Period. Executive-1 was therefore 

an “agent” of Telefónica, in Venezuela, as that term is used in the FCPA, Title 15, United States 

Code, Section 78dd-1(a).  

5. “Company-A,” is the wholly owned Venezuelan subsidiary of a multinational 

telecommunications equipment and systems company, whose identity is known to the United 

States and TELEFÓNICA VENEZOLANA, the defendant. During the Relevant Period, 

Company-A was one of TELEFÓNICA VENEZOLANA’s main suppliers of telecommunications 

infrastructure components and related equipment.  

6. “Company-A Executive,” whose identity is known to the United States and 

TELEFÓNICA VENEZOLANA, the defendant, had senior managerial responsibility for 

Company-A during the Relevant Period.  

7. “Company-A Employee,” whose identity is known to the United States and 

TELEFÓNICA VENEZOLANA, the defendant, served as an account manager for Company-A 

during the Relevant Period.  



3 
 

8. “Company-B,” is the wholly owned Venezuelan subsidiary of another 

multinational telecommunications equipment and systems company, whose identity is known to 

the United States and TELEFÓNICA VENEZOLANA, the defendant. During the Relevant Period, 

Company-B was one of TELEFÓNICA VENEZOLANA’s main suppliers of telecommunications 

infrastructure components and related equipment. 

9. “Company-B Employee,” whose identity is known to the United States and 

TELEFÓNICA VENEZOLANA, the defendant, was an employee of Company-B. Company-B 

Employee served as an account manager for Company-B during the Relevant Period. 

10. “Company-C,” is the United Arab Emirates-based subsidiary of a technology 

import-export company, whose identity is known to the United States and TELEFÓNICA 

VENEZOLANA, the defendant. Company-B designated Company-C as Company-B’s 

“integrator” for a series of sales from Company-B to TELEFÓNICA VENEZOLANA during the 

Relevant Period. As the purported “integrator,” Company-C was responsible for configuring the 

hardware and software that Company-B sold for use in TELEFÓNICA VENEZOLANA’s 

telecommunications network, to ensure that all components worked together.  

Foreign Government Entities and Officials 

11. “Foreign Official-1,” whose identity is known to the United States and 

TELEFÓNICA VENEZOLANA, the defendant, is a Venezuelan national who served as a high-

ranking Venezuelan government official during the Relevant Period. Foreign Official-1 was 

therefore a “foreign official,” as that term is used in the FCPA, Title 15, United States Code, 

Section 78dd-1(f)(1). 

12. “Foreign Official-2,” whose identity is known to the United States and 

TELEFÓNICA VENEZOLANA, the defendant, is a Venezuelan national who served as a high-



4 
 

ranking Venezuelan government official during the Relevant Period. Foreign Official-2 was 

therefore a “foreign official,” as that term is used in the FCPA, Title 15, United States Code, 

Section 78dd-1(f)(1). 

Third Party Agents and Consultants 

13. “Intermediary-1,” whose identity is known to the United States and TELEFÓNICA 

VENEZOLANA, the defendant, is a Venezuelan national who solicited and received bribe 

payments from TELEFÓNICA VENEZOLANA during the Relevant Period on behalf of, among 

others, Foreign Official-1 and Foreign Official-2.  

14. “Shell Company-1,” whose identity is known to the United States and 

TELEFÓNICA VENEZOLANA, the defendant, was a shell company incorporated in Panama that 

was owned and controlled by Intermediary-1 during the Relevant Period and was used, at least in 

part, for the benefit of Venezuelan government officials, including Foreign Official-1.  

15. “Intermediary-2,” whose identity is known to the United States and TELEFÓNICA 

VENEZOLANA, the defendant, is a Venezuelan national and a relative of Intermediary-1. During 

the Relevant Period, Intermediary-2 assisted Intermediary-1 in providing things of value to Foreign 

Official-1 and others.  

Overview of the Bribery Scheme 

16. During the Relevant Period, TELEFÓNICA VENEZOLANA, the defendant, 

through certain of its officers, employees, and agents, and while acting as an agent of Telefónica, 

together with its co-conspirators, knowingly and willfully conspired and agreed with others to 

corruptly provide payments to, and for the benefit of, foreign officials in Venezuela, including 

Foreign Official-1 and Foreign Official-2, to secure an improper advantage and to influence those 

foreign officials in order to obtain and retain business by receiving preferential access to U.S. 



5 
 

dollars in a government-sponsored currency auction that allowed TELEFÓNICA VENEZOLANA 

to purchase equipment for its telecommunications network.  

17. Specifically, in or around 2014, TELEFÓNICA VENEZOLANA, the defendant, 

participated in a currency auction in Venezuela that allowed TELEFÓNICA VENEZOLANA to 

exchange its Venezuelan bolívars for U.S. dollars. To ensure its success in the auction, 

TELEFÓNICA VENEZOLANA recruited two suppliers, Company-A and Company-B, to make 

approximately $28,870,099 in corrupt payments to Intermediary-1 and Shell Company-1 that were 

intended, at least in part, to benefit Venezuelan government officials, including Foreign Official-

1 and Foreign Official-2. To conceal the bribe payments, TELEFÓNICA VENEZOLANA covered 

the cost of the bribes by agreeing to purchase equipment from Company-A and Company-B at 

inflated prices, using the U.S. currency obtained in the auction. 

18. TELEFÓNICA VENEZOLANA, the defendant, knew that a significant portion of 

the approximately $28,870,099 would be paid as a “commission” that was intended, at least in 

part, for the benefit of Venezuelan government officials to influence the results of the currency 

auction. As a result of its corrupt payments, TELEFÓNICA VENEZOLANA was permitted to 

exchange and subsequently received over $110 million through the currency auction, which it used 

to purchase equipment from Company-A and Company-B. 

19. In furtherance of the scheme, TELEFÓNICA VENEZOLANA, the defendant, 

together with others, utilized and caused the use of means and instrumentalities of interstate 

commerce to communicate with each other and other individuals regarding the scheme. The 

conspirators also routed corrupt payments totaling more than $22 million into and out of 

correspondent bank accounts at financial institutions in New York, New York.  



6 
 

20. In total, in or around August 2014, the Venezuelan government awarded 

approximately $172,046,000 to 16 telecommunications companies as part of the currency auction. 

Between the two bids it corruptly orchestrated, TELEFÓNICA VENEZOLANA, the defendant, 

received approximately 65% of the total currency awarded in the auction. TELEFÓNICA 

VENEZOLANA was able to deploy those funds (less the $28,870,099 paid to Intermediary-1 

through Shell Company-1) to buy network equipment from Company-A and Company-B and 

thereby continue providing telecommunications services to customers in Venezuela. 

Background on the 2014 Currency Auction 

21. During the Relevant Period, TELEFÓNICA VENEZOLANA, the defendant, was 

a major provider of telecommunications services to businesses and consumers in Venezuela. To 

provide such services, TELEFÓNICA VENEZOLANA operated and maintained a 

telecommunications network throughout the country, which included towers, receivers, cables, and 

other infrastructure and equipment. TELEFÓNICA VENEZOLANA relied on multinational 

companies, primarily Company-A and Company-B, to supply the necessary equipment for its 

network. 

22. Since in or around the mid-2000s, the Venezuelan government, through the Banco 

Central de Venezuela (“Central Bank of Venezuela”), has maintained strict currency controls, 

including fixed official exchange rates for limited quantities of bolívars, to limit capital flight and 

support the value of the Venezuelan bolívar.  

23. Owing to the instability of the Venezuelan bolívar, Company-A and Company-B 

generally did not accept payment from TELEFÓNICA VENEZOLANA, the defendant, in 

bolívars, and instead required payment in stable currencies such as the U.S. dollar. By contrast, 

TELEFÓNICA VENEZOLANA overwhelmingly collected payments from its customers in 



7 
 

bolívars and developed significant bolívar reserves. Due to strict currency controls, however, 

TELEFÓNICA VENEZOLANA was unable to exchange its bolívar reserves for stable currencies. 

This undermined TELEFÓNICA VENEZOLANA’s ability to purchase necessary equipment from 

Company-A and Company-B to operate and maintain its telecommunications network. Starting at 

least in or around the early 2010s, TELEFÓNICA VENEZOLANA’s network was aging and in 

disrepair.  

24. In or around 2013, the Venezuelan government began to sponsor currency 

exchanges (or “auctions”) that allowed domestic companies in critical industries to apply to 

exchange Venezuelan bolívars for U.S. dollars at favorable rates and in significant quantities. 

These exchanges enabled domestic companies to import necessary goods and equipment from 

suppliers that would not accept payment in Venezuelan bolívars. 

25. In or around 2014, the Venezuelan government held a national currency exchange 

auction specifically for the telecommunications industry. The auction, administered through the 

Central Bank of Venezuela, was called the Sistema Complementario de Administración de Divisas 

(“SICAD”). Although called an “auction,” SICAD was in fact a selective government program 

through which the Venezuelan government chose: (i) which companies would receive access to 

foreign currency at favorable exchange rates; (ii) for which purposes or goods; and (iii) if awarded, 

how much currency a company would be permitted to exchange. To place a “bid” in the auction, 

a company had to submit an application that identified, among other things, which goods a 

company sought to purchase with the foreign currency, from which suppliers, using which customs 

codes, and at what cost. A company participating in the auction was also required to place in 

escrow bolívars corresponding to the cost of the goods they sought to import, at the favorable 

exchange rate designated by the SICAD. If successful, the Central Bank of Venezuela would wire 



8 
 

the awarded U.S. dollars (or other stable currency) directly to the “winning” company’s suppliers 

and would debit corresponding amounts of escrowed bolívars from the winning company’s 

escrowed account. 

TELEFÓNICA VENEZOLANA’s Corrupt Participation in the SICAD Auction 

Executive-1’s Meetings with  
Venezuelan Government Officials and Intermediary-1 

26. In or around May 2014, shortly before the SICAD auction was publicly announced, 

Executive-1 was summoned to an impromptu meeting with, among others, Foreign Official-1 and 

Foreign Official-2. In that meeting, Foreign Official-1 and Foreign Official-2 informed Executive-

1, in substance and in part, that: (i) the Venezuelan government would soon be announcing a 

currency auction for the telecommunications industry (i.e., the SICAD auction); and 

(ii) TELEFÓNICA VENEZOLANA, the defendant, would only be awarded U.S dollars through 

the auction if it paid a “commission” on any funds awarded, implying that the commission would 

personally benefit Foreign Official-1 and Foreign Official-2 (the “SICAD Meeting with Foreign 

Officials”). 

27. Shortly thereafter, at a social gathering, Intermediary-1 informed Executive-1, in 

substance and in part, that Intermediary-1 had spoken with Foreign Official-1 about the SICAD 

Meeting with Foreign Officials. Intermediary-1 reiterated to Executive-1, in substance and in part, 

that TELEFÓNICA VENEZOLANA, the defendant, needed to pay “fees” if it wanted to succeed 

in the forthcoming SICAD auction. Intermediary-1 asked who TELEFÓNICA VENEZOLANA’s 

largest suppliers were, and Executive-1 identified Company-A and Company-B.  

Company-A’s Participation in the Scheme at TELEFÓNICA VENEZOLANA’s Direction  

28. In or around May or June 2014, shortly after the encounter with Intermediary-1, 

Executive-1 met with Company-A Executive, Company-A Employee, and others, and stated, in 



9 
 

substance and in part, that the SICAD auction would soon be announced, and requested Company-

A’s participation in the auction for the benefit of TELEFÓNICA VENEZOLANA, the defendant. 

In particular, Executive-1 directed Company-A Executive and Company-A Employee to contact 

Intermediary-1 to facilitate Company-A’s participation in the auction.  

29. Shortly thereafter, Company-A Employee contacted Intermediary-1. After several 

meetings between Company-A employees and Intermediary-1 and Intermediary-1’s 

representatives, Company-A Employee provided Intermediary-1 with the necessary customs codes 

for the equipment that TELEFÓNICA VENEZOLANA, the defendant, planned to buy from 

Company-A with the SICAD auction proceeds.  

30. In or around July 2014, using their personal, U.S.-based email accounts, Company-

A Executive and Company-A Employee exchanged drafts of a “consultancy agreement” between 

Company-A’s parent company and an as-yet-unnamed counterparty, to be identified by 

Intermediary-1 once TELEFÓNICA VENEZOLANA, the defendant, and Company-A’s “bid” in 

the SICAD auction was successful.  

31. In or around August 2014, Intermediary-1 informed Company-A Employee, in 

substance and in part, that the counterparty for the consultancy agreement would be Shell 

Company-1. At no time did Shell Company-1 or Intermediary-1 in fact perform any consultancy 

services for TELEFÓNICA VENEZOLANA, the defendant. 

32. On or about August 4, 2014, Intermediary-1 contacted Company-A Employee to 

relay, in substance and in part, that Company-A had been awarded “everything”—all the U.S. 

dollars—that it had applied for through the SICAD auction.  

33. Also on or about August 4, 2014, the Venezuelan government announced that 

Company-A had been awarded approximately $55,454,000 through the SICAD auction. On or 



10 
 

about August 6, 2014, the Central Bank of Venezuela debited approximately 609,994,000 bolívars 

from Company-A’s bank account, as the funds that would be exchanged for the U.S. dollars 

awarded.  

34. On or about October 27, 2014, the Central Bank of Venezuela transferred 

approximately $55,454,000 to Company-A’s parent company through a correspondent bank 

located in the Southern District of New York.  

35. Beginning on or about November 26, 2014, through at least on or about 

December 2, 2014, an affiliate of Company-A transferred a total of approximately $13,863,473, 

representing 25% of the $55,454,000 awarded to Company-A through the auction, to Shell 

Company-1’s bank account in Luxembourg. Several of the transactions comprising the 

$13,863,473 to Shell Company-1 transited through correspondent banks located in the Southern 

District of New York.  

36. Company-A used most of the $55,454,000 obtained from the SICAD auction as 

payment from TELEFÓNICA VENEZOLANA, the defendant, for network equipment. 

TELEFÓNICA VENEZOLANA reimbursed Company-A for the corrupt payments of 

$13,863,473 to Shell Company-1 by inflating the per-unit cost of the equipment that 

TELEFÓNICA VENEZOLANA purchased from Company-A. 

Company-B’s Involvement in the SICAD Auction 

37. In or around May or June 2014, Executive-1 coordinated with representatives of 

Company-B to use Intermediary-1 to facilitate Company-B’s participation in the upcoming SICAD 

auction.  

38. Between in or around May 2014 and July 2014, TELEFÓNICA VENEZOLANA, 

the defendant, and Company-B agreed, among other things, that TELEFÓNICA VENEZOLANA 



11 
 

would directly participate in the SICAD auction and that the auction proceeds awarded to 

TELEFÓNICA VENEZOLANA would be used to purchase network equipment from Company-

B.  

39. In or around June and July 2014, Company-B Employee exchanged emails with 

Intermediary-1 and Intermediary-2 concerning, in part, TELEFÓNICA VENEZOLANA, the 

defendant, purchasing equipment from Company-B with the SICAD auction proceeds. 

Attachments to these emails indicate, in substance and in part, that Company-B’s prices were 

inflated such that TELEFÓNICA VENEZOLANA would bear the cost of the bribes. In or around 

July 2014, Company-B Employee shared versions of these attachments with TELEFÓNICA 

VENEZOLANA employees. 

40. On or about August 4, 2014, the Venezuelan government announced that 

TELEFÓNICA VENEZOLANA, the defendant, had been awarded approximately $60,027,000 

through the auction. In or around August 2014, the Central Bank of Venezuela debited 

approximately 660,291,563 bolívars from TELEFÓNICA VENEZOLANA’s bank account, as the 

funds that would be exchanged for the U.S. dollars awarded. 

41. On or about August 18, 2014, TELEFÓNICA VENEZOLANA, the defendant, 

entered a contract with Company-C—acting on behalf of Company-B as its purported network 

integrator—for the purchase of network equipment. In fact, Company-C never performed any 

services for Company-B. 

42. On or about September 3, 2014, the Central Bank of Venezuela transferred 

approximately $60,026,505.73 to Company-C through a correspondent bank located in the 

Southern District of New York.  



12 
 

43. On or about September 24, 2014, Company-C and Shell Company-1 entered into a 

purported “Commission Agreement” according to which Shell Company-1 would act as a 

“consultant” for the “Procurement of Communications Equipment for TELEFONICA 

VENEZOLANA, C.A. [the defendant].”  

44. On or about September 30, 2014, Shell Company-1 issued an invoice to Company-

C for “fees” for approximately $15,006,750. 

45. On or about October 28, 2014, Company-C transferred approximately $15,006,626, 

representing 25% of the funds awarded to TELEFÓNICA VENEZOLANA, the defendant, in the 

SICAD auction, to Shell Company-1’s bank account in Luxembourg. This transaction went 

through a correspondent bank located in the Southern District of New York.  

46. Company-B and Company-C used the $60,027,000 in SICAD auction proceeds as 

payment from TELEFÓNICA VENEZOLANA, the defendant, for network equipment. 

TELEFÓNICA VENEZOLANA bore the cost of the $15,006,626 payment to Shell Company-1 

by inflating the costs of the network equipment that TELEFÓNICA VENEZOLANA purchased 

from Company-B through Company-C. 

Benefits to Foreign Officials 

47. During the Relevant Period, Intermediary-1, Intermediary-2, and others known and 

unknown, comingled the bribes related to the purchase of TELEFÓNICA VENEZOLANA’s, the 

defendant’s, telecommunications equipment with other funds and then paid for the lavish expenses 

of Foreign Official-1 and Foreign Official-1’s family.  

48. For example, beginning in or around December 2014 through at least January 2015, 

soon after Shell Company-1 received the payments that were intended, at least in part, as bribes, 



13 
 

Intermediary-1 spent more than $500,000 on a lavish vacation in Saint Barthélemy for 

Intermediary-1, Foreign Official-1, and members of their respective families.  

49. Additionally, in or around January 2015, using some of the corrupt proceeds 

received through Shell Company-1, Intermediary-1 spent approximately $605,000 on luxury 

watches and jewelry in Saint Barthélemy, including for the benefit of Foreign Official-1 and 

Foreign Official-1’s spouse. 

STATUTORY ALLEGATIONS 

COUNT ONE 
(Conspiracy to Bribe a Foreign Official) 

50. Paragraphs 1 through 49 of this Information are repeated and realleged as if fully 

set forth herein. 

51. From in or around 2014 through at least 2015, in the Southern District of New York 

and elsewhere, TELEFÓNICA VENEZOLANA, the defendant, together with others known and 

unknown, willfully and knowingly combined, conspired, confederated, and agreed together and 

with each other to commit an offense against the United States, to wit, to violate the anti-bribery 

provisions of the FCPA, in violation of Title 15, United States Code, Section 78dd-1.   

52. It was a part and object of the conspiracy that TELEFÓNICA VENEZOLANA, the 

defendant, being the agent of an issuer acting on behalf of that issuer, would and did make use of 

the mails and any means and instrumentalities of interstate commerce corruptly in furtherance of 

an offer, payment, promise to pay, and authorization of the payment of any money, and offer, gift, 

promise to give, and authorization of the giving of anything of value to a foreign official, and to 

any person, while knowing that all or a portion of such money and thing of value will be offered, 

given, and promised, directly and indirectly, to any foreign official, to any foreign political party 

or official thereof, and to any candidate for foreign political office, for purposes of 



14 
 

(A)(i) influencing any act and decision of such foreign official in that foreign official’s official 

capacity; (ii) inducing such foreign official to do and omit to do any act in violation of the lawful 

duty of such foreign official; and (iii) securing any improper advantage; and (B) inducing such 

foreign official to use that foreign official’s influence with a foreign government and agencies and 

instrumentalities thereof to affect and influence any act and decision of such government and 

agencies and instrumentalities, in order to assist TELEFÓNICA VENEZOLANA in obtaining and 

retaining business for and with, and directing business to, TELEFÓNICA VENEZOLANA and 

others, in violation of Title 15, United States Code, Section 78dd-1, to wit, TELEFÓNICA 

VENEZOLANA and others agreed to pay Shell Company-1, Intermediary-1, and others known 

and unknown, approximately 25% of any U.S. currency awarded in the SICAD auction in order to 

influence and induce Venezuelan officials to ensure successful bids for a total of $115,481,000 in 

the SICAD auction, in order to assist TELEFÓNICA VENEZOLANA in obtaining and retaining 

business for, and directing business to, TELEFÓNICA VENEZOLANA and others. 

Overt Acts 

53. In furtherance of the conspiracy and to achieve the object thereof, at least one of 

the co-conspirators committed or caused to be committed, in the Southern District of New York 

and elsewhere, at least one of the following overt acts, among others:   

a. On or about October 27, 2014, the Central Bank of Venezuela transferred 

approximately $55,454,000 to Company-A’s parent company through a correspondent bank 

located in the Southern District of New York. 

b. Beginning on or about November 26, 2014, through at least on or about 

December 2, 2014, an affiliate of Company-A transferred a total of approximately $13,863,473, 

representing 25% of the $55,454,000 awarded to Company-A through the auction, to Shell 



15 
 

Company-1’s bank account in Luxembourg. Several of the transactions comprising the 

$13,863,473 to Shell Company-1 transited through correspondent banks located in the Southern 

District of New York. 

c. On or about September 3, 2014, the Central Bank of Venezuela transferred 

approximately $60,026,505.73 to Company-C through a correspondent bank located in the 

Southern District of New York.  

d. On or about October 28, 2014, Company-C transferred approximately 

$15,006,626, representing 25% of the funds awarded to TELEFÓNICA VENEZOLANA in the 

SICAD auction, to Shell Company-1’s bank account in Luxembourg. This transaction transited 

through a correspondent bank located in the Southern District of New York. 

(Title 18, United States Code, Section 371.) 
 

FORFEITURE ALLEGATION 

54. As a result of committing the offense alleged in Count One of this Information, 

TELEFÓNICA VENEZOLANA, the defendant, shall forfeit to the United States, pursuant to Title 

18, United States Code, Section 981(a)(1)(C) and Title 28, United States Code, Section 2461(c), 

any and all property, real and personal, that constitutes or is derived from proceeds traceable to the 

commission of said offense, including but not limited to a sum of money in United States currency 

representing the amount of proceeds traceable to the commission of said offense.   

Substitute Assets Provision 

55. If any of the above-described forfeitable property, as a result of any act or omission 

of the defendant: 

a. cannot be located upon the exercise of due diligence;  

b. has been transferred or sold to, or deposited with, a third person; 

c. has bene place beyond the jurisdiction of the Court; 



16 
 

d. has been substantially diminished in value; or 

e. has been commingled with other property, which cannot be subdivided 

without difficulty;  

it is the intent of the United States, pursuant to Title 21, United States Code, Section 853(p) and 

Title 28, United States Code, Section 2461(c), to seek forfeiture of any other property of the 

defendant up to the value of the forfeitable property described above.   

(Title 18, United States Code, Section 981(a)(1)(C); Title 21 United States Code, Section  
853(p); and Title 28, United States Code, Section 2461(c).) 

 
 

       
 
________________________   ________________________ 

 GLENN S. LEON     DAMIAN WILLIAMS 
 Chief, Fraud Section     United States Attorney

A-1 

ATTACHMENT A 

STATEMENT OF FACTS 

The following Statement of Facts is incorporated by reference as part of the Deferred 

Prosecution Agreement (the “Agreement”) between the United States Department of Justice, 

Criminal Division, Fraud Section, the United States Attorney’s Office for the Southern District of 

New York, (collectively, the “United States”), and Telefónica Venezolana, C.A. (“Telefónica 

Venezolana”). Telefónica Venezolana hereby agrees and stipulates that the following information 

is true and accurate. Telefónica Venezolana admits, accepts, and acknowledges that it is 

responsible for the acts of its officers, directors, employees, and agents as set forth below. Should 

the United States pursue the prosecution that is deferred by this Agreement, Telefónica Venezolana 

agrees that it will neither contest the admissibility of, nor contradict, this Statement of Facts in any 

such proceeding. The following facts establish beyond a reasonable doubt the charges set forth in 

the criminal Information attached to this Agreement: 

Telefónica Venezolana and Relevant Entities and Individuals 

1. From in or around 2014 to in or around 2015 (the “Relevant Period”), Telefónica 

Venezolana was a telecommunications operator headquartered in Caracas, Venezuela that 

provided mobile phone services in Venezuela. During the Relevant Period, through multiple 

holding companies, Telefónica Venezolana was a wholly owned subsidiary of Telefónica, S.A. 

(“Telefónica”), a global telecommunications operator headquartered in Madrid, Spain. Since in or 

around 1987, Telefónica has traded its American Depositary Receipts (“ADRs”) on the New York 

Stock Exchange. Telefónica is therefore an “issuer,” as that term is defined in the Foreign Corrupt 

Practices Act (“FCPA”), Title 15, United States Code, Section 78dd-1(a).  

2. During the Relevant Period, Telefónica controlled, oversaw, and managed 



 

A-2 

Telefónica Venezolana’s operations, including the selection and employment of its senior officers. 

As such, Telefónica Venezolana was an “agent” of Telefónica in Venezuela, as that term is used 

in the FCPA, Title 15, United States Code, Section 78dd-1(a).  

3. “Executive-1,” whose identity is known to the United States and Telefónica 

Venezolana, served as a senior executive of Telefónica Venezolana, at the control and direction of 

Telefónica, during the Relevant Period. Executive-1 was therefore an “agent” of Telefónica, in 

Venezuela, as that term is used in the FCPA, Title 15, United States Code, Section 78dd-1(a).  

4. “Company-A” is the wholly owned Venezuelan subsidiary of a multinational 

telecommunications equipment and systems company, whose identity is known to the United 

States and Telefónica Venezolana. During the Relevant Period, Company-A was one of Telefónica 

Venezolana’s main suppliers of telecommunications infrastructure components and related 

equipment.  

5. “Company-A Executive,” whose identity is known to the United States and 

Telefónica Venezolana, had senior managerial responsibility for Company-A during the Relevant 

Period.  

6. “Company-A Employee,” whose identity is known to the United States and 

Telefónica Venezolana, served as an account manager for Company-A during the Relevant Period.  

7. “Company-B” is the wholly-owned Venezuelan subsidiary of another multinational 

telecommunications equipment and systems company, whose identity is known to the United 

States and Telefónica Venezolana. During the Relevant Period, Company-B was one of Telefónica 

Venezolana’s main suppliers of telecommunications infrastructure components and related 

equipment. 

8. “Company-B Employee,” whose identity is known to the United States and 



 

A-3 

Telefónica Venezolana, was an employee of Company-B. Company-B Employee served as an 

account manager for Company-B during the Relevant Period. 

9. “Company-C” is the United Arab Emirates-based subsidiary of a technology 

import-export company, whose identity is known to the United States and Telefónica Venezolana. 

Company-B designated Company-C as Company-B’s “integrator” for a series of sales from 

Company-B to Telefónica Venezolana during the Relevant Period. As the purported “integrator,” 

Company-C was responsible for configuring the hardware and software that Company-B sold for 

use in Telefónica Venezolana’s telecommunications network, to ensure that all components 

worked together.  

Foreign Government Entities and Officials 

10. “Foreign Official-1,” whose identity is known to the United States and Telefónica 

Venezolana, is a Venezuelan national who served as a high-ranking Venezuelan government 

official during the Relevant Period. Foreign Official-1 was therefore a “foreign official,” as that 

term is used in the FCPA, Title 15, United States Code, Section 78dd-1(f)(1). 

11. “Foreign Official-2,” whose identity is known to the United States and Telefónica 

Venezolana, is a Venezuelan national who served as a high-ranking Venezuelan government 

official during the Relevant Period. Foreign Official-2 was therefore a “foreign official,” as that 

term is used in the FCPA, Title 15, United States Code, Section 78dd-1(f)(1). 

Third Party Agents and Consultants 

12. “Intermediary-1,” whose identity is known to the United States and Telefónica 

Venezolana, is a Venezuelan national who solicited and received bribe payments from Telefónica 

Venezolana during the Relevant Period on behalf of, among others, Foreign Official-1 and Foreign 

Official-2.  



 

A-4 

13. “Shell Company-1,” whose identity is known to the United States and Telefónica 

Venezolana, was a shell company incorporated in Panama that was owned and controlled by 

Intermediary-1 during the Relevant Period and used, at least in part, for the benefit of Venezuelan 

government officials, including Foreign Official-1.  

14. “Intermediary-2,” whose identity is known to the United States and Telefónica 

Venezolana, is a Venezuelan national and a relative of Intermediary-1. During the Relevant Period, 

Intermediary-2 assisted Intermediary-1 in providing things of value to Foreign Official-1 and 

others.  

Overview of the Bribery Scheme 

15. During the Relevant Period, Telefónica Venezolana, through certain of its officers, 

employees, and agents, and while acting as an agent of Telefónica, together with its co-

conspirators, knowingly and willfully conspired and agreed with others to corruptly provide 

payments to, and for the benefit of, foreign officials in Venezuela, including Foreign Official-1 

and Foreign Official-2, to secure an improper advantage and to influence those foreign officials in 

order to obtain and retain business by receiving preferential access to U.S. dollars in a government-

sponsored currency auction that allowed Telefónica Venezolana to purchase equipment for its 

telecommunications network.  

16. Specifically, in or around 2014, Telefónica Venezolana participated in a currency 

auction in Venezuela that allowed Telefónica Venezolana to exchange its Venezuelan bolívars for 

U.S. dollars. To ensure its success in the auction, Telefónica Venezolana recruited two suppliers, 

Company-A and Company-B, to make approximately $28,870,099 in corrupt payments to 

Intermediary-1 and Shell Company-1 that were intended, at least in part, to benefit Venezuelan 

government officials, including Foreign Official-1 and Foreign Official-2. To conceal the bribe 



 

A-5 

payments, Telefónica Venezolana covered the cost of the bribes by agreeing to purchase 

equipment from Company-A and Company-B at inflated prices, using the U.S. currency obtained 

in the auction. 

17. Telefónica Venezolana knew that a significant portion of the approximately 

$28,870,099 would be paid as a “commission” that was intended, at least in part, for the benefit of 

Venezuelan government officials to influence the results of the currency auction. As a result of its 

corrupt payments, Telefónica Venezolana was permitted to exchange and subsequently received 

over $110 million through the currency auction, which it used to purchase equipment from 

Company-A and Company-B. 

18. In furtherance of the scheme, Telefónica Venezolana, together with others, utilized 

and caused the use of means and instrumentalities of interstate commerce to communicate with 

each other and other individuals regarding the scheme. The conspirators also routed corrupt 

payments totaling more than $22 million into and out of correspondent bank accounts at financial 

institutions in New York, New York.  

19. In total, in or around August 2014, the Venezuelan government awarded 

approximately $172,046,000 to 16 telecommunications companies as part of the currency auction. 

Between the two bids it corruptly orchestrated, Telefónica Venezolana received approximately 

65% of the total currency awarded in the auction. Telefónica Venezolana was able to deploy those 

funds (less the $28,870,099 paid to Intermediary-1 through Shell Company-1) to buy network 

equipment from Company-A and Company-B and thereby continue providing telecommunications 

services to customers in Venezuela. 



 

A-6 

Background on 2014 Currency Auction 

20. During the Relevant Period, Telefónica Venezolana was a major provider of 

telecommunications services to businesses and consumers in Venezuela. To provide such services, 

Telefónica Venezolana operated and maintained a telecommunications network throughout the 

country, which included towers, receivers, cables, and other infrastructure and equipment. 

Telefónica Venezolana relied on multinational companies, primarily Company-A and Company-

B, to supply the necessary equipment for its network. 

21. Since in or around the mid-2000s, the Venezuelan government, through the Banco 

Central de Venezuela (“Central Bank of Venezuela”), has maintained strict currency controls, 

including fixed official exchange rates for limited quantities of bolívars, to limit capital flight and 

support the value of the Venezuelan bolívar.  

22. Owing to the instability of the Venezuelan bolívar, Company-A and Company-B 

generally did not accept payment from Telefónica Venezolana in bolívars and instead required 

payment in stable currencies such as the U.S. dollar. By contrast, Telefónica Venezolana 

overwhelmingly collected payments from its customers in bolívars and developed significant 

bolívar reserves. Due to strict currency controls, however, Telefónica Venezolana was unable to 

exchange its bolívar reserves for stable currencies. This undermined Telefónica Venezolana’s 

ability to purchase necessary equipment from Company-A and Company-B to operate and 

maintain its telecommunications network. Starting at least in or around the early 2010s, Telefónica 

Venezolana’s network was aging and in disrepair.  

23. In or around 2013, the Venezuelan government began to sponsor currency 

exchanges (or “auctions”) that allowed domestic companies in critical industries to apply to 

exchange Venezuelan bolívars for U.S. dollars at favorable rates and in significant quantities. 



 

A-7 

These exchanges enabled domestic companies to import necessary goods and equipment from 

suppliers that would not accept payment in Venezuelan bolívars. 

24. In or around 2014, the Venezuelan government held a national currency exchange 

auction specifically for the telecommunications industry. The auction, administered through the 

Central Bank of Venezuela, was called the Sistema Complementario de Administración de Divisas 

(“SICAD”). Although called an “auction,” SICAD was in fact a selective government program 

through which the Venezuelan government chose: (i) which companies would receive access to 

foreign currency at favorable exchange rates; (ii) for which purposes or goods; and (iii) if awarded, 

how much currency a company would be permitted to exchange. To place a “bid” in the auction, 

a company had to submit an application that identified, among other things, which goods a 

company sought to purchase with the foreign currency, from which suppliers, using which customs 

codes, and at what cost. A company participating in the auction was also required to place in 

escrow bolívars corresponding to the cost of the goods they sought to import, at the favorable 

exchange rate designated by the SICAD. If successful, the Central Bank of Venezuela would wire 

the awarded U.S. dollars (or other stable currency) directly to the “winning” company’s suppliers 

and would debit corresponding amounts of escrowed bolívars from the winning company’s 

escrowed account. 

Telefónica Venezolana’s Corrupt Participation in the SICAD Auction 

Executive-1’s Meetings with  
Venezuelan Government Officials and Intermediary-1 

25. In or around May 2014, shortly before the SICAD auction was publicly announced, 

Executive-1 was summoned to an impromptu meeting with, among others, Foreign Official-1 and 

Foreign Official-2. In that meeting, Foreign Official-1 and Foreign Official-2 informed Executive-



 

A-8 

1, in substance and in part, that: (i) the Venezuelan government would soon be announcing a 

currency auction for the telecommunications industry (i.e., the SICAD auction); and (ii) Telefónica 

Venezolana would only be awarded U.S dollars through the auction if it paid a “commission” on 

any funds awarded, implying that the commission would personally benefit Foreign Official-1 and 

Foreign Official-2 (the “SICAD Meeting with Foreign Officials”). 

26. Shortly thereafter, at a social gathering, Intermediary-1 informed Executive-1, in 

substance and in part, that Intermediary-1 had spoken with Foreign Official-1 about the SICAD 

Meeting with Foreign Officials. Intermediary-1 reiterated to Executive-1, in substance and in part, 

that Telefónica Venezolana needed to pay “fees” if it wanted to succeed in the forthcoming SICAD 

auction. Intermediary-1 asked who Telefónica Venezolana’s largest suppliers were, and 

Executive-1 identified Company-A and Company-B.  

Company-A’s Participation in the Scheme at Telefónica Venezolana’s Direction  

27. In or around May or June 2014, shortly after the encounter with Intermediary-1, 

Executive-1 met with Company-A Executive, Company-A Employee, and others, and stated, in 

substance and in part, that the SICAD auction would soon be announced and requested Company-

A’s participation in the auction for the benefit of Telefónica Venezolana. In particular, Executive-

1 directed Company-A Executive and Company-A Employee to contact Intermediary-1 to 

facilitate Company-A’s participation in the auction.  

28. Shortly thereafter, Company-A Employee contacted Intermediary-1. After several 

meetings between Company-A employees and Intermediary-1 and Intermediary-1’s 

representatives, Company-A Employee provided Intermediary-1 with the necessary customs codes 

for the equipment that Telefónica Venezolana planned to buy from Company-A with the SICAD 

auction proceeds.  



 

A-9 

29. In or around July 2014, using their personal, U.S.-based email accounts, Company-

A Executive and Company-A Employee exchanged drafts of a “consultancy agreement” between 

Company-A’s parent company and an as-yet-unnamed counterparty, to be identified by 

Intermediary-1 once Telefónica Venezolana and Company-A’s “bid” in the SICAD auction was 

successful.  

30. In or around August 2014, Intermediary-1 informed Company-A Employee, in 

substance and in part, that the counterparty for the consultancy agreement would be Shell 

Company-1. At no time did Shell Company-1 or Intermediary-1 in fact perform any consultancy 

services for Telefónica Venezolana. 

31. On or about August 4, 2014, Intermediary-1 contacted Company-A Employee to 

relay, in substance and in part, that Company-A had been awarded “everything”—all the U.S. 

dollars—that it had applied for through the SICAD auction.  

32. Also on or about August 4, 2014, the Venezuelan government announced that 

Company-A had been awarded approximately $55,454,000 through the auction. On or about 

August 6, 2014, the Central Bank of Venezuela debited approximately 609,994,000 bolívars from 

Company-A’s bank account, as the funds that would be exchanged for the U.S. dollars awarded.  

33. On or about October 27, 2014, the Central Bank of Venezuela transferred 

approximately $55,454,000 to Company-A’s parent company through a correspondent bank 

located in the Southern District of New York.  

34. Beginning on or about November 26, 2014, through at least on or about 

December 2, 2014, an affiliate of Company-A transferred a total of approximately $13,863,473, 

representing 25% of the $55,454,000 awarded to Company-A through the auction, to Shell 

Company-1’s bank account in Luxembourg. Several of the transactions comprising the 



 

A-10 

$13,863,473 to Shell Company-1 transited through correspondent banks located in the Southern 

District of New York.  

35. Company-A used most of the $55,454,000 obtained from the SICAD auction as 

payment from Telefónica Venezolana for network equipment. Telefónica Venezolana reimbursed 

Company-A for the corrupt payments of $13,863,473 to Shell Company-1 by inflating the per-unit 

cost of the equipment that Telefónica Venezolana purchased from Company-A. 

Company-B’s Involvement in the SICAD Auction 

36. In or around May or June 2014, Executive-1 coordinated with representatives of 

Company-B to use Intermediary-1 to facilitate Company-B’s participation in the upcoming SICAD 

auction.  

37. Between in or around May 2014 and July 2014, Telefónica Venezolana and 

Company-B agreed, among other things, that Telefónica Venezolana would directly participate in 

the SICAD auction and that the auction proceeds awarded to Telefónica Venezolana would be 

used to purchase network equipment from Company-B.  

38. In or around June and July 2014, Company-B Employee exchanged emails with 

Intermediary-1 and Intermediary-2 concerning, in part, Telefónica Venezolana purchasing 

equipment from Company-B with the SICAD auction proceeds. Attachments to these emails 

indicate, in substance and in part, that Company-B’s prices were inflated such that Telefónica 

Venezolana would bear the cost of the bribes. In or around July 2014, Company-B Employee 

shared versions of these attachments with Telefónica Venezolana employees. 

39. On or about August 4, 2014, the Venezuelan government announced that 

Telefónica Venezolana had been awarded approximately $60,027,000 through the auction. In or 

around August 2014, the Central Bank of Venezuela debited approximately 660,291,563 bolívars 



 

A-11 

from Telefónica Venezolana’s bank account, as the funds that would be exchanged for the U.S. 

dollars awarded. 

40. On or about August 18, 2014, Telefónica Venezolana entered a contract with 

Company-C—acting on behalf of Company-B as its purported network integrator—for the 

purchase of network equipment. In fact, Company-C never performed any services for Company-

B. 

41. On or about September 3, 2014, the Central Bank of Venezuela transferred 

approximately $60,026,505.73 to Company-C through a correspondent bank located in the 

Southern District of New York.  

42. On or about September 24, 2014, Company-C and Shell Company-1 entered into a 

purported “Commission Agreement” according to which Shell Company-1 would act as a 

“consultant” for the “Procurement of Communications Equipment for TELEFONICA 

VENEZOLANA, C.A.”  

43. On or about September 30, 2014, Shell Company-1 issued an invoice to Company-

C for “fees” for $15,006,750. 

44. On or about October 28, 2014, Company-C transferred approximately $15,006,626, 

representing 25% of the funds awarded to Telefónica Venezolana in the SICAD auction, to Shell 

Company-1’s bank account in Luxembourg. This transaction went through a correspondent bank 

located in the Southern District of New York.  

45. Company-B and Company-C used the $60,027,000 in auction proceeds as payment 

from Telefónica Venezolana for network equipment. Telefónica Venezolana bore the cost of the 

$15,006,626 payment to Shell Company-1 by inflating the costs of the network equipment that 

Telefónica Venezolana purchased from Company-B through Company-C. 



 

A-12 

Benefits to Foreign Officials 

46. During the Relevant Period, Intermediary-1, Intermediary-2, and others, known and 

unknown, comingled the bribes related to the purchase of Telefónica Venezolana’s 

telecommunications equipment with other funds and then paid for the lavish expenses of Foreign 

Official-1 and Foreign Official-1’s family.  

47. For example, beginning in or around December 2014 through at least January 2015, 

soon after Shell Company-1 received the payments that were intended, at least in part, as bribes, 

Intermediary-1 spent more than $500,000 on a lavish vacation in Saint Barthélemy for 

Intermediary-1, Foreign Official-1, and members of their respective families.  

48. Additionally, in or around January 2015, using some of the corrupt proceeds 

received through Shell Company-1, Intermediary-1 spent approximately $605,000 on luxury 

watches and jewelry in Saint Barthélemy, including for the benefit of Foreign Official-1 and 

Foreign Official-1’s spouse.10-21-2024







10-21-2024



 

C-1 

ATTACHMENT C 

CORPORATE COMPLIANCE PROGRAM 

 In order to address any deficiencies in their internal controls, compliance code, policies, 

and procedures regarding compliance with the Foreign Corrupt Practices Act (“FCPA”), 15 U.S.C. 

§§ 78dd-1, et seq., and other applicable anti-corruption laws, Telefónica Venezolana, C.A. and 

Telefónica, S.A. (the “Companies”) agree to continue to conduct, in a manner consistent with all 

of their obligations under this Agreement, appropriate reviews of their existing internal controls, 

policies, and procedures.   

 Where necessary and appropriate, the Companies agree to modify their compliance 

program, including internal controls, compliance policies, and procedures in order to ensure that 

they maintain: (a) an effective system of internal accounting controls designed to ensure the 

making and keeping of fair and accurate books, records, and accounts; and (b) a rigorous 

compliance program that incorporates relevant internal accounting controls, as well as policies and 

procedures designed to effectively detect and deter violations of the FCPA and other applicable 

anti-corruption laws (collectively, the “anti-corruption laws,”).  At a minimum, this should include, 

but not be limited to, the following elements to the extent they are not already part of the 

Companies’ existing internal controls, compliance code, policies, and procedures: 

Commitment to Compliance 

1. The Companies will ensure that their directors and senior management provide 

strong, explicit, and visible support and commitment to compliance with their corporate policy 

against violations of the anti-corruption laws, their compliance policies, and their Code of 

Conduct, and demonstrate rigorous support for compliance principles via their actions and words. 



 

C-2 
 

2. The Companies will ensure that mid-level management throughout their 

organization reinforce leadership’s commitment to compliance policies and principles and 

encourage employees to abide by them.  The Companies will create and foster a culture of ethics 

and compliance with the law in their day-to-day operations at all levels of the Companies.   

Periodic Risk Assessment and Review 

3. The Companies will implement a risk management process to identify, analyze, 

and address the individual circumstances of the Companies, in particular the foreign bribery risks 

facing the Companies.   

4. On the basis of their periodic risk assessment, the Companies shall take appropriate 

steps to design, implement, or modify each element of their compliance program to reduce the risk 

of violations of the anti-corruption laws, their compliance policies, and their Code of Conduct.    

Policies and Procedures 

5. The Companies will develop and promulgate a clearly articulated and visible 

corporate policy against violations of the anti-corruption laws, which shall be memorialized in a 

written compliance policy or policies. 

6. The Companies will develop and promulgate compliance policies and procedures 

designed to reduce the prospect of violations of the anti-corruption laws and the Companies’ 

compliance policies and Code of Conduct, and the Companies will take appropriate measures to 

encourage and support the observance of ethics and compliance policies and procedures against 

violation of the anti-corruption laws by personnel at all levels of the Companies.  These anti-

corruption policies and procedures shall apply to all directors, officers, and employees and, where 

necessary and appropriate, outside parties acting on behalf of the Companies in a foreign 



 

C-3 
 

jurisdiction, including all agents and business partners.  The Companies shall notify all employees 

that compliance with the policies and procedures is the duty of individuals at all levels of the 

Companies.  Such policies and procedures shall address: 

a. gifts; 

b. hospitality, entertainment, and expenses; 

c. customer travel; 

d. political contributions; 

e. charitable donations and sponsorships; 

f. facilitation payments; and 

g. solicitation and extortion. 

7. The Companies will ensure that they have a system of financial and accounting 

procedures, including a system of internal controls, reasonably designed to ensure the maintenance 

of fair and accurate books, records, and accounts.  This system should be designed to provide 

reasonable assurances that:  

a. transactions are executed in accordance with management’s general or 

specific authorization; 

b. transactions are recorded as necessary to permit preparation of financial 

statements in conformity with generally accepted accounting principles or any other criteria 

applicable to such statements, and to maintain accountability for assets;  

c. access to assets is permitted only in accordance with management’s general 

or specific authorization; and 



 

C-4 
 

d. the recorded accountability for assets is compared with the existing assets 

at reasonable intervals and appropriate action is taken with respect to any differences.    

8. The Companies shall review their anti-corruption compliance policies and 

procedures as necessary to address changing and emerging risks and update them as appropriate 

to ensure their continued effectiveness, taking into account relevant developments in the field and 

evolving international and industry standards. 

Independent, Autonomous, and Empowered Oversight 

9. The Companies will assign responsibility to one or more senior corporate 

executives of the Companies for the implementation and oversight of the Companies’ anti-

corruption compliance policies and procedures.  Such corporate official(s) shall have the authority 

to report directly to independent monitoring bodies, including internal audit, the Companies’ 

Board of Directors, or any appropriate committee of the Companies’ Board of Directors, and shall 

have an adequate level of autonomy from management as well as sufficient resources, authority, 

and support from senior leadership to maintain such autonomy. 

Training and Guidance 

10. The Companies will implement mechanisms designed to ensure that their Code of 

Conduct and anti-corruption compliance policies and procedures are effectively communicated to 

all directors, officers, employees, and, where necessary and appropriate, agents and business 

partners.  These mechanisms shall include: (a) periodic training for all directors and officers, all 

employees in positions of leadership or trust, positions that require such training (e.g., internal 

audit, sales, legal, compliance, finance), or positions that otherwise pose a corruption risk to the 

Companies, and, where necessary and appropriate, agents and business partners; and (b) metrics 



 

C-5 
 

for measuring knowledge retention and effectiveness of the training.  The Companies will conduct 

training in a manner tailored to the audience’s size, sophistication, or subject matter expertise and, 

where appropriate, will discuss prior compliance incidents. 

11. The Companies will maintain, or where necessary establish, an effective system 

for providing guidance and advice to directors, officers, employees, and, where necessary and 

appropriate, agents and business partners, on complying with the Companies’ anti-corruption 

compliance policies and procedures, including when they need advice on an urgent basis or in any 

foreign jurisdiction in which the Companies operate. 

Confidential Reporting Structure and Investigation of Misconduct 

12. The Companies will maintain, or where necessary establish, an effective system 

for internal and, where possible, confidential reporting by, and protection of, directors, officers, 

employees, and, where appropriate, agents and business partners concerning violations of the 

Companies’ Code of Conduct or anti-corruption compliance policies and procedures and 

protection of directors, officers, employees, and, where appropriate, agents and business partners 

who make such reports. To ensure effectiveness, the Companies commit to following applicable 

anti-retaliation and whistleblower protection laws, and to appropriately training employees on such 

laws. 

13. The Companies will maintain, or where necessary establish, an effective and 

reliable process with sufficient resources for responding to, investigating, and documenting 

allegations of violations of the anti-corruption laws or the Companies’ anti-corruption compliance 

policies and procedures. 



 

C-6 
 

Compensation Structures and Consequence Management 

14. The Companies will implement clear mechanisms to incentivize behavior amongst 

all directors, officers, employees, and, where necessary and appropriate, parties acting on behalf 

of the Companies, in compliance with their corporate policy against violations of the anti-

corruption laws, their compliance policies, and their Code of Conduct.  These incentives shall 

include, but shall not be limited to, the implementation of criteria related to compliance in the 

Companies’ compensation and bonus system. 

15. The Companies will institute appropriate disciplinary procedures to address, 

among other things, violations of the anti-corruption laws and the Companies’ Code of Conduct 

and anti-corruption compliance policies and procedures by the Companies’ directors, officers, and 

employees.  Such procedures should be applied consistently and fairly, regardless of the position 

held by, or perceived importance of, the director, officer, or employee.  The Companies shall 

implement procedures to ensure that, where misconduct is discovered, reasonable steps are taken 

to remedy the harm resulting from such misconduct, and to ensure that appropriate steps are taken 

to prevent further similar misconduct, including assessing the internal controls, Code of Conduct, 

and compliance policies and procedures and making modifications necessary to ensure the overall 

anti-corruption compliance program is effective. 

Third-Party Management 

16. The Companies will institute appropriate risk-based due diligence and compliance 

requirements pertaining to the retention and oversight of all agents and business partners, 

including: 



 

C-7 
 

a. properly documented due diligence pertaining to the hiring and appropriate 

and regular oversight of agents and business partners; 

b. informing agents and business partners of the Companies’ commitment to 

abiding by anti-corruption laws, and of the Companies’ Code of Conduct and anti-corruption 

compliance policies and procedures; and 

c. seeking a reciprocal commitment from agents and business partners. 

17. The Companies will understand and record the business rationale for using a third 

party in a transaction, and will conduct adequate due diligence with respect to the risks posed by 

a third-party partner such as a third-party partner’s reputations and relationships, if any, with 

foreign officials. The Companies will ensure that contract terms with third parties specifically 

describe the services to be performed, that the third party is actually performing the described 

work, and that its compensation is commensurate with the work being provided in that industry 

and geographical region. The Companies will engage in ongoing monitoring and risk management 

of third-party relationships through updated due diligence, training, audits, and/or annual 

compliance certifications by the third party. 

18. Where necessary and appropriate, the Companies will include standard provisions 

in agreements, contracts, and renewals thereof with all agents and business partners that are 

reasonably calculated to prevent violations of the anti-corruption laws, which may, depending 

upon the circumstances, include:  (a) anti-corruption representations and undertakings relating to 

compliance with the anti-corruption laws; (b) rights to conduct audits of the books and records of 

the agent or business partner to ensure compliance with the foregoing; and (c) rights to terminate 

an agent or business partner as a result of any breach of the anti-corruption laws, the Companies’ 



 

C-8 
 

Code of Conduct or compliance policies, or procedures, or the representations and undertakings 

related to such matters. 

Mergers and Acquisitions 

19. The Companies will develop and implement policies and procedures for mergers 

and acquisitions requiring that the Companies conduct appropriate risk-based due diligence on 

potential new business entities, including appropriate FCPA and anti-corruption due diligence by 

legal, accounting, and compliance personnel.   

20. The Companies will ensure that the Companies’ Code of Conduct and compliance 

policies and procedures regarding the anti-corruption laws apply as quickly as is practicable to 

newly acquired businesses or entities merged with the Companies and will promptly: 

a. train the directors, officers, employees, agents, and business partners 

consistent with Paragraph 10 above on the anti-corruption laws and the Companies’ compliance 

policies and procedures regarding anti-corruption laws;  

b. where warranted, conduct an FCPA-specific audit of all newly acquired or 

merged businesses as quickly as practicable; 

c. where warranted, establish a plan to integrate the acquired businesses or 

entities into the Companies’ enterprise resource planning systems as quickly as practicable.  

Monitoring and Testing 

21. The Companies will conduct periodic reviews and testing of all elements of their 

compliance programs to evaluate and improve their effectiveness in preventing and detecting 

violations of anti-corruption laws and the Companies’ Code of Conduct and anti-corruption 



 

C-9 
 

compliance policies and procedures, taking into account relevant developments in the field and 

evolving international and industry standards.  

22. The Companies will ensure that compliance and control personnel have sufficient 

direct or indirect access to relevant sources of data to allow for timely and effective monitoring 

and/or testing of transactions.  

Analysis and Remediation of Misconduct 

23. The Companies will conduct a root cause analysis of misconduct, including prior 

misconduct, to identify any systemic issues and/or any control failures.  The Companies will timely 

and appropriately remediate the root causes of misconduct.  The Companies will ensure that root 

causes, including systemic issues and controls failures, and relevant remediation are shared with 

management as appropriate.  

 

 



D-1 

ATTACHMENT D 

COMPLIANCE REPORTING REQUIREMENTS 

Telefónica Venezolana, C.A. and Telefónica, S.A. (the “Companies”) agree that they will 

report to the United States Department of Justice, Criminal Division, Fraud Section and the United 

States Attorney’s Office for the Southern District of New York (the “Fraud Section and the 

Office”) periodically.  During the Term, the Companies shall review, test, and update their 

compliance program and internal controls, policies, and procedures described in Attachment C.  

The Companies shall be required to: (i) conduct an initial (“first”) review and submit a first report 

and (ii) conduct and prepare at least two follow-up reviews and reports, as described below.  Prior 

to conducting each review, the Companies shall be required to prepare and submit a workplan for 

the review.   

In conducting the reviews, the Companies shall undertake the following activities, among 

others: (a) inspection of relevant documents, including the Companies’ current policies,  

procedures, and training materials concerning compliance with the FCPA and other applicable 

anti-corruption laws; (b) inspection and testing of the Companies’ systems procedures, and internal 

controls,  including record-keeping and internal audit procedures at sample sites; (c) meetings with, 

and interviews of, relevant current and, where appropriate, former directors, officers, employees, 

business partners, agents, and other persons; and (d) analyses, studies, and comprehensive testing 

of the Companies’ compliance program.    

Written Work Plans, Reviews and Reports 

1. The Companies shall conduct a first review and prepare a first report, followed by 

at least two follow-up reviews and reports.   



D-2 

2. Within sixty (60) calendar days of the date this Agreement is executed, the 

Companies shall, after consultation with the Fraud Section and the Office, prepare and submit a 

written work plan to address the Companies’ first review.  The Fraud Section and the Office shall 

have thirty (30) calendar days after receipt of the written work plan to provide comments.   

3. With respect to each follow-up review and report, after consultation with the Fraud 

Section and the Office, the Companies shall prepare a written work plan within forty-five (45) 

calendar days of the submission of the prior report, and the Fraud Section and the Office shall 

provide comments within thirty (30) calendar days after receipt of the written work plan. 

4. All written work plans shall identify with reasonable specificity the activities the 

Companies plans to undertake to review and test each element of their compliance program, as 

described in Attachment C.     

5. Any disputes between the Companies and the Fraud Section and the Office with 

respect to any written work plan shall be decided by the Fraud Section and the Office in their sole 

discretion.   

6. No later than one year from the date this Agreement is executed, the Companies 

shall submit to the Fraud Section and the Office a written report setting forth: (1) a complete 

description of their remediation efforts to date; (2) a complete description of the testing conducted 

to evaluate the effectiveness of the compliance program and the results of that testing; and (3) their 

proposals to ensure that their compliance program is reasonably designed, implemented, and 

enforced so that the program is effective in deterring and detecting violations of the FCPA and 

other applicable anti-corruption laws.  The report shall be transmitted to:  

Deputy Chief – FCPA Unit 

Deputy Chief – CECP Unit  

Criminal Division, Fraud Section 



D-3 

U.S. Department of Justice  

1400 New York Avenue, NW  

Bond Building, Eleventh Floor  

Washington, DC 20005  

 

Chief, Complex Frauds & Cybercrime Section,  

United States Attorney’s Office for the Southern District of New York,  

26 Federal Plaza, 37th Floor  

New York, NY 10278 

 

The Companies may extend the time period for issuance of the first report with prior written 

approval of the Fraud Section and the Office. 

Follow-up Reviews and Reports 

7. The Companies shall undertake at least two follow-up reviews and reports, 

incorporating the views of the Fraud Section and the Office on the Companies’ prior reviews and 

reports, to further monitor and assess whether the Companies’ compliance program is reasonably 

designed, implemented, and enforced so that it is effective at deterring and detecting violations of 

the FCPA and other applicable anti-corruption laws. 

8. The first follow-up (“second”) review and report shall be completed by no later 

than one year after the first report is submitted to the Fraud Section and the Office.   

9.  The second follow-up (“third”) report shall be completed and delivered to the 

Fraud Section and the Office no later than thirty (30) days before the end of the Term. 

10. The Companies may extend the time period for submission of any of the follow-up 

reports with prior written approval of the Fraud Section and the Office. 

Confidentiality of Submissions 

11. Submissions by the Companies, including the work plans and reports, will likely 

include proprietary, financial, confidential, and competitive business information.  Moreover, 

public disclosure of the submissions could discourage cooperation, impede pending or potential 



D-4 

government investigations and thus undermine the objectives of the reporting requirement. For 

these reasons, among others, the submissions and the contents thereof are intended to remain and 

shall remain non-public, except as otherwise agreed to by the parties in writing, or except to the 

extent the Fraud Section and the Office determine in their sole discretion that disclosure would be 

in furtherance of the Fraud Section’s and the Office’s discharge of their duties and responsibilities 

or is otherwise required by law. 

   

 



E-1 

ATTACHMENT E 

CERTIFICATION 

 

To: United States Department of Justice 

 Criminal Division, Fraud Section 

 Attention: Chief of the Fraud Section 

 

 

          United States Department of Justice 

          United States Attorney’s Office for the Southern District of New York  

          Attention: United States Attorney for the Southern District of New York 

      

 
 

Re:   Deferred Prosecution Agreement Disclosure Certification 

 

The undersigned certify, pursuant to Paragraph 21 of the Deferred Prosecution Agreement 

(“the Agreement”) filed on [DATE] in the United States District Court for the Southern District of 

New York, by and between the United States of America, Telefónica Venezolana, C.A., and 

Telefónica, S.A. (the “Companies”), that the undersigned are aware of the Companies’ disclosure 

obligations under Paragraphs 5 and 6 of the Agreement, and that the Companies have disclosed to 

the United States Department of Justice, Criminal Division, Fraud Section and the United States 

Attorney’s Office for the Southern District of New York (collectively, the “Offices”) any and all 

evidence or allegations of conduct required pursuant to Paragraphs 5 and 6 of the Agreement, 

which includes evidence or allegations of any violation of the anti-bribery or accounting provisions 

of the Foreign Corrupt Practices Act of 1977 (“FCPA”), as amended, Title 15, United States Code, 

Section 78dd-1, or the Foreign Extortion Prevention Act (“FEPA”) had the conduct occurred 

within the jurisdiction of the United States, committed by the Companies’ employees or agents 

(“Disclosable Information”).  This obligation to disclose information extends to any and all 

Disclosable Information that has been identified through the Companies’ compliance and controls 

program, whistleblower channel, internal audit reports, due diligence procedures, investigation 



E-2 

process, or other processes.  The undersigned further acknowledge and agree that the reporting 

requirements contained in Paragraphs 5 and 6 and the representations contained in this certification 

constitute a significant and important component of the Agreement and of the Offices’ 

determination whether the Companies have satisfied their obligations under the Agreement. 

The undersigned hereby certify that they are respectively the Chief Executive Officer and 

Chief Finance Officer of Telefónica, S.A. and the Chief Executive Officer and Chief Finance 

Officer of Telefónica Venezolana, C.A., and that each has been duly authorized by the Companies 

to sign this Certification on behalf of the Companies.  

This Certification shall constitute a material statement and representation by the 

undersigned and by, on behalf of, and for the benefit of, the Companies to the executive branch of 

the United States for purposes of 18 U.S.C. § 1001, and such material statement and representation 

shall be deemed to have been made in the Southern District of New York.  This Certification shall 

also constitute a record, document, or tangible object in connection with a matter within the 

jurisdiction of a department and agency of the United States for purposes of 18 U.S.C. § 1519, and 

such record, document, or tangible object shall be deemed to have been made in the Southern 

District of New York. 

 

 

  



E-3 

Date: _____________________ Name (Printed): __________________________________ 

      

 

Name (Signed): __________________________________

 Chief Executive Officer 

     Telefónica, S.A. 

 

 

Date: _____________________ Name (Printed): __________________________________ 

      

 

Name (Signed): __________________________________

 Chief Financial Officer 

     Telefónica, S.A. 

 

 

Date: _____________________ Name (Printed): __________________________________ 

      

 

Name (Signed): __________________________________

 Chief Executive Officer 

     Telefónica Venezolana, C.A. 

 

 

Date: _____________________ Name (Printed): __________________________________ 

      

 

Name (Signed): __________________________________

 Chief Financial Officer 

     Telefónica Venezolana, C.A.UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 

UNITED STATES OF AMERICA 

v. 

TELEFÓNICA VENEZOLANA, C.A., 

                           Defendant. 

SEALED NOTICE OF INTENT TO  

FILE AN INFORMATION  

Please take notice that the United States Attorney’s Office will file an Information upon 

the defendant’s waiver of Indictment, pursuant to Rule 7(b) of the Federal Rules of Criminal 

Procedure.  

Furthermore, I have reviewed Judge Garnett’s Individual Rules for matters involving the 

U.S. Attorney’s Office, and the relevant records, and Judge Garnett is recused from this matter. 

Dated: New York, New York 
October 29, 2024 

DAMIAN WILLIAMS 
United States Attorney  

By: _____________________________ 
Jilan J. Kamal 
Assistant United States Attorney 

AGREED AND CONSENTED TO: 

By: _____________________________ 
Berge Setrakian, Esq. 
Eric Christofferson, Esq. 
John Hillebrecht, Esq. 
Attorneys for Telefónica Venezolana, C.A. 



UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 
 
UNITED STATES OF AMERICA 
 

v. 
 
TELEFÓNICA VENEZOLANA, C.A., 
 
                                       Defendant. 
 

        
      INFORMATION 
 
       24 Cr. 
  

 
The United States charges: 

GENERAL ALLEGATIONS 

Relevant Statutory Background 

1. The Foreign Corrupt Practices Act of 1977, as amended, Title 15, United States 

Code, Sections 78dd-1, et seq. (“FCPA”), was enacted by Congress for the purpose of, among 

other things, making it unlawful to act corruptly in furtherance of an offer, promise, authorization, 

or payment of money or anything of value, directly or indirectly, to a foreign official for the 

purpose of obtaining or retaining business for, or directing any business to, any person. 

TELEFÓNICA VENEZOLANA and Relevant Entities and Individuals 

2. From in or around 2014 to in or around 2015 (the “Relevant Period”), 

TELEFÓNICA VENEZOLANA, C.A. (“TELEFÓNICA VENEZOLANA”), the defendant, was a 

telecommunications operator headquartered in Caracas, Venezuela, that provided mobile phone 

services in Venezuela. During the Relevant Period, through multiple holding companies, 

TELEFÓNICA VENEZOLANA was a wholly owned subsidiary of Telefónica, S.A. 

(“Telefónica”), a global telecommunications operator headquartered in Madrid, Spain. Since in or 

around 1987, Telefónica has traded its American Depositary Receipts (“ADRs”) on the New York 



2 
 

Stock Exchange. Telefónica is therefore an “issuer,” as that term is defined in the FCPA, Title 15, 

United States Code, Section 78dd-1(a).  

3. During the Relevant Period, Telefónica controlled, oversaw, and managed 

TELEFÓNICA VENEZOLANA, the defendant, including the selection and employment of its 

senior officers. As such, TELEFÓNICA VENEZOLANA was an “agent” of Telefónica in 

Venezuela, as that term is used in the FCPA, Title 15, United States Code, Section 78dd-1(a).  

4. “Executive-1,” whose identity is known to the United States and TELEFÓNICA 

VENEZOLANA, the defendant, served as a senior executive of TELEFÓNICA VENEZOLANA, 

at the control and direction of Telefónica, during the Relevant Period. Executive-1 was therefore 

an “agent” of Telefónica, in Venezuela, as that term is used in the FCPA, Title 15, United States 

Code, Section 78dd-1(a).  

5. “Company-A,” is the wholly owned Venezuelan subsidiary of a multinational 

telecommunications equipment and systems company, whose identity is known to the United 

States and TELEFÓNICA VENEZOLANA, the defendant. During the Relevant Period, 

Company-A was one of TELEFÓNICA VENEZOLANA’s main suppliers of telecommunications 

infrastructure components and related equipment.  

6. “Company-A Executive,” whose identity is known to the United States and 

TELEFÓNICA VENEZOLANA, the defendant, had senior managerial responsibility for 

Company-A during the Relevant Period.  

7. “Company-A Employee,” whose identity is known to the United States and 

TELEFÓNICA VENEZOLANA, the defendant, served as an account manager for Company-A 

during the Relevant Period.  



3 
 

8. “Company-B,” is the wholly owned Venezuelan subsidiary of another 

multinational telecommunications equipment and systems company, whose identity is known to 

the United States and TELEFÓNICA VENEZOLANA, the defendant. During the Relevant Period, 

Company-B was one of TELEFÓNICA VENEZOLANA’s main suppliers of telecommunications 

infrastructure components and related equipment. 

9. “Company-B Employee,” whose identity is known to the United States and 

TELEFÓNICA VENEZOLANA, the defendant, was an employee of Company-B. Company-B 

Employee served as an account manager for Company-B during the Relevant Period. 

10. “Company-C,” is the United Arab Emirates-based subsidiary of a technology 

import-export company, whose identity is known to the United States and TELEFÓNICA 

VENEZOLANA, the defendant. Company-B designated Company-C as Company-B’s 

“integrator” for a series of sales from Company-B to TELEFÓNICA VENEZOLANA during the 

Relevant Period. As the purported “integrator,” Company-C was responsible for configuring the 

hardware and software that Company-B sold for use in TELEFÓNICA VENEZOLANA’s 

telecommunications network, to ensure that all components worked together.  

Foreign Government Entities and Officials 

11. “Foreign Official-1,” whose identity is known to the United States and 

TELEFÓNICA VENEZOLANA, the defendant, is a Venezuelan national who served as a high-

ranking Venezuelan government official during the Relevant Period. Foreign Official-1 was 

therefore a “foreign official,” as that term is used in the FCPA, Title 15, United States Code, 

Section 78dd-1(f)(1). 

12. “Foreign Official-2,” whose identity is known to the United States and 

TELEFÓNICA VENEZOLANA, the defendant, is a Venezuelan national who served as a high-



4 
 

ranking Venezuelan government official during the Relevant Period. Foreign Official-2 was 

therefore a “foreign official,” as that term is used in the FCPA, Title 15, United States Code, 

Section 78dd-1(f)(1). 

Third Party Agents and Consultants 

13. “Intermediary-1,” whose identity is known to the United States and TELEFÓNICA 

VENEZOLANA, the defendant, is a Venezuelan national who solicited and received bribe 

payments from TELEFÓNICA VENEZOLANA during the Relevant Period on behalf of, among 

others, Foreign Official-1 and Foreign Official-2.  

14. “Shell Company-1,” whose identity is known to the United States and 

TELEFÓNICA VENEZOLANA, the defendant, was a shell company incorporated in Panama that 

was owned and controlled by Intermediary-1 during the Relevant Period and was used, at least in 

part, for the benefit of Venezuelan government officials, including Foreign Official-1.  

15. “Intermediary-2,” whose identity is known to the United States and TELEFÓNICA 

VENEZOLANA, the defendant, is a Venezuelan national and a relative of Intermediary-1. During 

the Relevant Period, Intermediary-2 assisted Intermediary-1 in providing things of value to Foreign 

Official-1 and others.  

Overview of the Bribery Scheme 

16. During the Relevant Period, TELEFÓNICA VENEZOLANA, the defendant, 

through certain of its officers, employees, and agents, and while acting as an agent of Telefónica, 

together with its co-conspirators, knowingly and willfully conspired and agreed with others to 

corruptly provide payments to, and for the benefit of, foreign officials in Venezuela, including 

Foreign Official-1 and Foreign Official-2, to secure an improper advantage and to influence those 

foreign officials in order to obtain and retain business by receiving preferential access to U.S. 



5 
 

dollars in a government-sponsored currency auction that allowed TELEFÓNICA VENEZOLANA 

to purchase equipment for its telecommunications network.  

17. Specifically, in or around 2014, TELEFÓNICA VENEZOLANA, the defendant, 

participated in a currency auction in Venezuela that allowed TELEFÓNICA VENEZOLANA to 

exchange its Venezuelan bolívars for U.S. dollars. To ensure its success in the auction, 

TELEFÓNICA VENEZOLANA recruited two suppliers, Company-A and Company-B, to make 

approximately $28,870,099 in corrupt payments to Intermediary-1 and Shell Company-1 that were 

intended, at least in part, to benefit Venezuelan government officials, including Foreign Official-

1 and Foreign Official-2. To conceal the bribe payments, TELEFÓNICA VENEZOLANA covered 

the cost of the bribes by agreeing to purchase equipment from Company-A and Company-B at 

inflated prices, using the U.S. currency obtained in the auction. 

18. TELEFÓNICA VENEZOLANA, the defendant, knew that a significant portion of 

the approximately $28,870,099 would be paid as a “commission” that was intended, at least in 

part, for the benefit of Venezuelan government officials to influence the results of the currency 

auction. As a result of its corrupt payments, TELEFÓNICA VENEZOLANA was permitted to 

exchange and subsequently received over $110 million through the currency auction, which it used 

to purchase equipment from Company-A and Company-B. 

19. In furtherance of the scheme, TELEFÓNICA VENEZOLANA, the defendant, 

together with others, utilized and caused the use of means and instrumentalities of interstate 

commerce to communicate with each other and other individuals regarding the scheme. The 

conspirators also routed corrupt payments totaling more than $22 million into and out of 

correspondent bank accounts at financial institutions in New York, New York.  



6 
 

20. In total, in or around August 2014, the Venezuelan government awarded 

approximately $172,046,000 to 16 telecommunications companies as part of the currency auction. 

Between the two bids it corruptly orchestrated, TELEFÓNICA VENEZOLANA, the defendant, 

received approximately 65% of the total currency awarded in the auction. TELEFÓNICA 

VENEZOLANA was able to deploy those funds (less the $28,870,099 paid to Intermediary-1 

through Shell Company-1) to buy network equipment from Company-A and Company-B and 

thereby continue providing telecommunications services to customers in Venezuela. 

Background on the 2014 Currency Auction 

21. During the Relevant Period, TELEFÓNICA VENEZOLANA, the defendant, was 

a major provider of telecommunications services to businesses and consumers in Venezuela. To 

provide such services, TELEFÓNICA VENEZOLANA operated and maintained a 

telecommunications network throughout the country, which included towers, receivers, cables, and 

other infrastructure and equipment. TELEFÓNICA VENEZOLANA relied on multinational 

companies, primarily Company-A and Company-B, to supply the necessary equipment for its 

network. 

22. Since in or around the mid-2000s, the Venezuelan government, through the Banco 

Central de Venezuela (“Central Bank of Venezuela”), has maintained strict currency controls, 

including fixed official exchange rates for limited quantities of bolívars, to limit capital flight and 

support the value of the Venezuelan bolívar.  

23. Owing to the instability of the Venezuelan bolívar, Company-A and Company-B 

generally did not accept payment from TELEFÓNICA VENEZOLANA, the defendant, in 

bolívars, and instead required payment in stable currencies such as the U.S. dollar. By contrast, 

TELEFÓNICA VENEZOLANA overwhelmingly collected payments from its customers in 



7 
 

bolívars and developed significant bolívar reserves. Due to strict currency controls, however, 

TELEFÓNICA VENEZOLANA was unable to exchange its bolívar reserves for stable currencies. 

This undermined TELEFÓNICA VENEZOLANA’s ability to purchase necessary equipment from 

Company-A and Company-B to operate and maintain its telecommunications network. Starting at 

least in or around the early 2010s, TELEFÓNICA VENEZOLANA’s network was aging and in 

disrepair.  

24. In or around 2013, the Venezuelan government began to sponsor currency 

exchanges (or “auctions”) that allowed domestic companies in critical industries to apply to 

exchange Venezuelan bolívars for U.S. dollars at favorable rates and in significant quantities. 

These exchanges enabled domestic companies to import necessary goods and equipment from 

suppliers that would not accept payment in Venezuelan bolívars. 

25. In or around 2014, the Venezuelan government held a national currency exchange 

auction specifically for the telecommunications industry. The auction, administered through the 

Central Bank of Venezuela, was called the Sistema Complementario de Administración de Divisas 

(“SICAD”). Although called an “auction,” SICAD was in fact a selective government program 

through which the Venezuelan government chose: (i) which companies would receive access to 

foreign currency at favorable exchange rates; (ii) for which purposes or goods; and (iii) if awarded, 

how much currency a company would be permitted to exchange. To place a “bid” in the auction, 

a company had to submit an application that identified, among other things, which goods a 

company sought to purchase with the foreign currency, from which suppliers, using which customs 

codes, and at what cost. A company participating in the auction was also required to place in 

escrow bolívars corresponding to the cost of the goods they sought to import, at the favorable 

exchange rate designated by the SICAD. If successful, the Central Bank of Venezuela would wire 



8 
 

the awarded U.S. dollars (or other stable currency) directly to the “winning” company’s suppliers 

and would debit corresponding amounts of escrowed bolívars from the winning company’s 

escrowed account. 

TELEFÓNICA VENEZOLANA’s Corrupt Participation in the SICAD Auction 

Executive-1’s Meetings with  
Venezuelan Government Officials and Intermediary-1 

26. In or around May 2014, shortly before the SICAD auction was publicly announced, 

Executive-1 was summoned to an impromptu meeting with, among others, Foreign Official-1 and 

Foreign Official-2. In that meeting, Foreign Official-1 and Foreign Official-2 informed Executive-

1, in substance and in part, that: (i) the Venezuelan government would soon be announcing a 

currency auction for the telecommunications industry (i.e., the SICAD auction); and 

(ii) TELEFÓNICA VENEZOLANA, the defendant, would only be awarded U.S dollars through 

the auction if it paid a “commission” on any funds awarded, implying that the commission would 

personally benefit Foreign Official-1 and Foreign Official-2 (the “SICAD Meeting with Foreign 

Officials”). 

27. Shortly thereafter, at a social gathering, Intermediary-1 informed Executive-1, in 

substance and in part, that Intermediary-1 had spoken with Foreign Official-1 about the SICAD 

Meeting with Foreign Officials. Intermediary-1 reiterated to Executive-1, in substance and in part, 

that TELEFÓNICA VENEZOLANA, the defendant, needed to pay “fees” if it wanted to succeed 

in the forthcoming SICAD auction. Intermediary-1 asked who TELEFÓNICA VENEZOLANA’s 

largest suppliers were, and Executive-1 identified Company-A and Company-B.  

Company-A’s Participation in the Scheme at TELEFÓNICA VENEZOLANA’s Direction  

28. In or around May or June 2014, shortly after the encounter with Intermediary-1, 

Executive-1 met with Company-A Executive, Company-A Employee, and others, and stated, in 



9 
 

substance and in part, that the SICAD auction would soon be announced, and requested Company-

A’s participation in the auction for the benefit of TELEFÓNICA VENEZOLANA, the defendant. 

In particular, Executive-1 directed Company-A Executive and Company-A Employee to contact 

Intermediary-1 to facilitate Company-A’s participation in the auction.  

29. Shortly thereafter, Company-A Employee contacted Intermediary-1. After several 

meetings between Company-A employees and Intermediary-1 and Intermediary-1’s 

representatives, Company-A Employee provided Intermediary-1 with the necessary customs codes 

for the equipment that TELEFÓNICA VENEZOLANA, the defendant, planned to buy from 

Company-A with the SICAD auction proceeds.  

30. In or around July 2014, using their personal, U.S.-based email accounts, Company-

A Executive and Company-A Employee exchanged drafts of a “consultancy agreement” between 

Company-A’s parent company and an as-yet-unnamed counterparty, to be identified by 

Intermediary-1 once TELEFÓNICA VENEZOLANA, the defendant, and Company-A’s “bid” in 

the SICAD auction was successful.  

31. In or around August 2014, Intermediary-1 informed Company-A Employee, in 

substance and in part, that the counterparty for the consultancy agreement would be Shell 

Company-1. At no time did Shell Company-1 or Intermediary-1 in fact perform any consultancy 

services for TELEFÓNICA VENEZOLANA, the defendant. 

32. On or about August 4, 2014, Intermediary-1 contacted Company-A Employee to 

relay, in substance and in part, that Company-A had been awarded “everything”—all the U.S. 

dollars—that it had applied for through the SICAD auction.  

33. Also on or about August 4, 2014, the Venezuelan government announced that 

Company-A had been awarded approximately $55,454,000 through the SICAD auction. On or 



10 
 

about August 6, 2014, the Central Bank of Venezuela debited approximately 609,994,000 bolívars 

from Company-A’s bank account, as the funds that would be exchanged for the U.S. dollars 

awarded.  

34. On or about October 27, 2014, the Central Bank of Venezuela transferred 

approximately $55,454,000 to Company-A’s parent company through a correspondent bank 

located in the Southern District of New York.  

35. Beginning on or about November 26, 2014, through at least on or about 

December 2, 2014, an affiliate of Company-A transferred a total of approximately $13,863,473, 

representing 25% of the $55,454,000 awarded to Company-A through the auction, to Shell 

Company-1’s bank account in Luxembourg. Several of the transactions comprising the 

$13,863,473 to Shell Company-1 transited through correspondent banks located in the Southern 

District of New York.  

36. Company-A used most of the $55,454,000 obtained from the SICAD auction as 

payment from TELEFÓNICA VENEZOLANA, the defendant, for network equipment. 

TELEFÓNICA VENEZOLANA reimbursed Company-A for the corrupt payments of 

$13,863,473 to Shell Company-1 by inflating the per-unit cost of the equipment that 

TELEFÓNICA VENEZOLANA purchased from Company-A. 

Company-B’s Involvement in the SICAD Auction 

37. In or around May or June 2014, Executive-1 coordinated with representatives of 

Company-B to use Intermediary-1 to facilitate Company-B’s participation in the upcoming SICAD 

auction.  

38. Between in or around May 2014 and July 2014, TELEFÓNICA VENEZOLANA, 

the defendant, and Company-B agreed, among other things, that TELEFÓNICA VENEZOLANA 



11 
 

would directly participate in the SICAD auction and that the auction proceeds awarded to 

TELEFÓNICA VENEZOLANA would be used to purchase network equipment from Company-

B.  

39. In or around June and July 2014, Company-B Employee exchanged emails with 

Intermediary-1 and Intermediary-2 concerning, in part, TELEFÓNICA VENEZOLANA, the 

defendant, purchasing equipment from Company-B with the SICAD auction proceeds. 

Attachments to these emails indicate, in substance and in part, that Company-B’s prices were 

inflated such that TELEFÓNICA VENEZOLANA would bear the cost of the bribes. In or around 

July 2014, Company-B Employee shared versions of these attachments with TELEFÓNICA 

VENEZOLANA employees. 

40. On or about August 4, 2014, the Venezuelan government announced that 

TELEFÓNICA VENEZOLANA, the defendant, had been awarded approximately $60,027,000 

through the auction. In or around August 2014, the Central Bank of Venezuela debited 

approximately 660,291,563 bolívars from TELEFÓNICA VENEZOLANA’s bank account, as the 

funds that would be exchanged for the U.S. dollars awarded. 

41. On or about August 18, 2014, TELEFÓNICA VENEZOLANA, the defendant, 

entered a contract with Company-C—acting on behalf of Company-B as its purported network 

integrator—for the purchase of network equipment. In fact, Company-C never performed any 

services for Company-B. 

42. On or about September 3, 2014, the Central Bank of Venezuela transferred 

approximately $60,026,505.73 to Company-C through a correspondent bank located in the 

Southern District of New York.  



12 
 

43. On or about September 24, 2014, Company-C and Shell Company-1 entered into a 

purported “Commission Agreement” according to which Shell Company-1 would act as a 

“consultant” for the “Procurement of Communications Equipment for TELEFONICA 

VENEZOLANA, C.A. [the defendant].”  

44. On or about September 30, 2014, Shell Company-1 issued an invoice to Company-

C for “fees” for approximately $15,006,750. 

45. On or about October 28, 2014, Company-C transferred approximately $15,006,626, 

representing 25% of the funds awarded to TELEFÓNICA VENEZOLANA, the defendant, in the 

SICAD auction, to Shell Company-1’s bank account in Luxembourg. This transaction went 

through a correspondent bank located in the Southern District of New York.  

46. Company-B and Company-C used the $60,027,000 in SICAD auction proceeds as 

payment from TELEFÓNICA VENEZOLANA, the defendant, for network equipment. 

TELEFÓNICA VENEZOLANA bore the cost of the $15,006,626 payment to Shell Company-1 

by inflating the costs of the network equipment that TELEFÓNICA VENEZOLANA purchased 

from Company-B through Company-C. 

Benefits to Foreign Officials 

47. During the Relevant Period, Intermediary-1, Intermediary-2, and others known and 

unknown, comingled the bribes related to the purchase of TELEFÓNICA VENEZOLANA’s, the 

defendant’s, telecommunications equipment with other funds and then paid for the lavish expenses 

of Foreign Official-1 and Foreign Official-1’s family.  

48. For example, beginning in or around December 2014 through at least January 2015, 

soon after Shell Company-1 received the payments that were intended, at least in part, as bribes, 



13 
 

Intermediary-1 spent more than $500,000 on a lavish vacation in Saint Barthélemy for 

Intermediary-1, Foreign Official-1, and members of their respective families.  

49. Additionally, in or around January 2015, using some of the corrupt proceeds 

received through Shell Company-1, Intermediary-1 spent approximately $605,000 on luxury 

watches and jewelry in Saint Barthélemy, including for the benefit of Foreign Official-1 and 

Foreign Official-1’s spouse. 

STATUTORY ALLEGATIONS 

COUNT ONE 
(Conspiracy to Bribe a Foreign Official) 

50. Paragraphs 1 through 49 of this Information are repeated and realleged as if fully 

set forth herein. 

51. From in or around 2014 through at least 2015, in the Southern District of New York 

and elsewhere, TELEFÓNICA VENEZOLANA, the defendant, together with others known and 

unknown, willfully and knowingly combined, conspired, confederated, and agreed together and 

with each other to commit an offense against the United States, to wit, to violate the anti-bribery 

provisions of the FCPA, in violation of Title 15, United States Code, Section 78dd-1.   

52. It was a part and object of the conspiracy that TELEFÓNICA VENEZOLANA, the 

defendant, being the agent of an issuer acting on behalf of that issuer, would and did make use of 

the mails and any means and instrumentalities of interstate commerce corruptly in furtherance of 

an offer, payment, promise to pay, and authorization of the payment of any money, and offer, gift, 

promise to give, and authorization of the giving of anything of value to a foreign official, and to 

any person, while knowing that all or a portion of such money and thing of value will be offered, 

given, and promised, directly and indirectly, to any foreign official, to any foreign political party 

or official thereof, and to any candidate for foreign political office, for purposes of 



14 
 

(A)(i) influencing any act and decision of such foreign official in that foreign official’s official 

capacity; (ii) inducing such foreign official to do and omit to do any act in violation of the lawful 

duty of such foreign official; and (iii) securing any improper advantage; and (B) inducing such 

foreign official to use that foreign official’s influence with a foreign government and agencies and 

instrumentalities thereof to affect and influence any act and decision of such government and 

agencies and instrumentalities, in order to assist TELEFÓNICA VENEZOLANA in obtaining and 

retaining business for and with, and directing business to, TELEFÓNICA VENEZOLANA and 

others, in violation of Title 15, United States Code, Section 78dd-1, to wit, TELEFÓNICA 

VENEZOLANA and others agreed to pay Shell Company-1, Intermediary-1, and others known 

and unknown, approximately 25% of any U.S. currency awarded in the SICAD auction in order to 

influence and induce Venezuelan officials to ensure successful bids for a total of $115,481,000 in 

the SICAD auction, in order to assist TELEFÓNICA VENEZOLANA in obtaining and retaining 

business for, and directing business to, TELEFÓNICA VENEZOLANA and others. 

Overt Acts 

53. In furtherance of the conspiracy and to achieve the object thereof, at least one of 

the co-conspirators committed or caused to be committed, in the Southern District of New York 

and elsewhere, at least one of the following overt acts, among others:   

a. On or about October 27, 2014, the Central Bank of Venezuela transferred 

approximately $55,454,000 to Company-A’s parent company through a correspondent bank 

located in the Southern District of New York. 

b. Beginning on or about November 26, 2014, through at least on or about 

December 2, 2014, an affiliate of Company-A transferred a total of approximately $13,863,473, 

representing 25% of the $55,454,000 awarded to Company-A through the auction, to Shell 



15 
 

Company-1’s bank account in Luxembourg. Several of the transactions comprising the 

$13,863,473 to Shell Company-1 transited through correspondent banks located in the Southern 

District of New York. 

c. On or about September 3, 2014, the Central Bank of Venezuela transferred 

approximately $60,026,505.73 to Company-C through a correspondent bank located in the 

Southern District of New York.  

d. On or about October 28, 2014, Company-C transferred approximately 

$15,006,626, representing 25% of the funds awarded to TELEFÓNICA VENEZOLANA in the 

SICAD auction, to Shell Company-1’s bank account in Luxembourg. This transaction transited 

through a correspondent bank located in the Southern District of New York. 

(Title 18, United States Code, Section 371.) 
 

FORFEITURE ALLEGATION 

54. As a result of committing the offense alleged in Count One of this Information, 

TELEFÓNICA VENEZOLANA, the defendant, shall forfeit to the United States, pursuant to Title 

18, United States Code, Section 981(a)(1)(C) and Title 28, United States Code, Section 2461(c), 

any and all property, real and personal, that constitutes or is derived from proceeds traceable to the 

commission of said offense, including but not limited to a sum of money in United States currency 

representing the amount of proceeds traceable to the commission of said offense.   

Substitute Assets Provision 

55. If any of the above-described forfeitable property, as a result of any act or omission 

of the defendant: 

a. cannot be located upon the exercise of due diligence;  

b. has been transferred or sold to, or deposited with, a third person; 

c. has bene place beyond the jurisdiction of the Court; 



16 
 

d. has been substantially diminished in value; or 

e. has been commingled with other property, which cannot be subdivided 

without difficulty;  

it is the intent of the United States, pursuant to Title 21, United States Code, Section 853(p) and 

Title 28, United States Code, Section 2461(c), to seek forfeiture of any other property of the 

defendant up to the value of the forfeitable property described above.   

(Title 18, United States Code, Section 981(a)(1)(C); Title 21 United States Code, Section  
853(p); and Title 28, United States Code, Section 2461(c).) 

 
 

       
 
________________________   ________________________ 

 GLENN S. LEON     DAMIAN WILLIAMS 
 Chief, Fraud Section     United States Attorney