PHILADELPHIA - Dmitrij Harder, 42, of Huntingdon Valley, PA, was charged today by indictment with violating the Foreign Corrupt Practices Act and money laundering.  Harder is the former owner and President of Chestnut Consulting Group, Inc. (“Chestnut”), a financial consulting firm that was located in Southampton, Pennsylvania.

            The charges were announced today by United States Attorney Zane David Memeger, FBI Special Agent-in-Charge Edward J. Hanko, and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.

            The indictment alleges that Harder participated in a scheme to pay bribes to a foreign government official and then laundered the proceeds of those crimes. Between 2007 and 2009, Harder allegedly paid approximately $3.5 million in bribes to corruptly influence a foreign official’s actions on applications submitted by clients of his and of the Chestnut Group, and to corruptly influence the foreign official to direct business to him, the Chestnut Group, and others.

            The European Bank for Reconstruction and Development (“EBRD”) was a multilateral development bank headquartered in London, England, and was owned by over 60 sovereign nations.  Among other things, the EBRD provided debt and equity financing for development projects in emerging economies, primarily in Eastern Europe.  According to the indictment, Harder knew a senior banker at the EBRD from prior business dealings.  The senior banker was responsible for leading the review of the applications for loans and equity investments, and also set the terms and conditions for that financing.  Harder allegedly paid bribes to the senior banker in order to gain a favorable outcome in the review of applications for financing submitted by his clients.  According to the indictment, the EBRD ultimately approved applications for financing from two of Chestnut’s corporate clients: an $85 million equity investment with a 90 million Euro loan; and a $40 million equity investment with a $60 million convertible loan.  Chestnut allegedly earned approximately $8 million in “success fees” as a result of the EBRD’s approval of these two applications.

            It is further alleged that the defendant made five payments, totaling more than $3.5 million, to the sister of the official at the EBRD in an effort to conceal the bribes.  These alleged payments were made purportedly for consulting and other services provided to Chestnut by the official’s sister, when, in fact, she did not provide such services.  According to the indictment, the defendant also participated in the creation of fake documents in an attempt to justify these payments to the official’s sister.

            “We will aggressively investigate and prosecute individuals in our district who use corrupt means like bribery to influence foreign officials,” said Memeger. “Our criminal statutes in this arena must be enforced to ensure fair dealing in a competitive global marketplace where foreign officials often hold significant decision-making authority. The alleged conduct here was particularly reprehensible because it undermined the legitimacy of a process designed to support businesses for the citizens of developing nations.”

            “This is a great example of the FBI’s ability to successfully coordinate with our international law enforcement partners to tackle corruption,” said Special Agent-in-Charge Hanko. “Bribery – foreign or domestic – cripples the notion of fair competition in the marketplace.”

            “We are committed to combating foreign corruption, across the globe and across all industries, through enforcement actions and prosecutions of companies and the individuals who run those companies,” said Assistant Attorney General Caldwell.  “As alleged, in this case, the owner and chief executive of a Pennsylvania financial consulting firm secured hundreds of millions of dollars in business by bribing a European banking official.  He now faces an indictment for corruption in federal court.  Bribery of foreign officials undermines the public trust in government and fair competition in business.  The charges returned today reflect the clear message that we will root out corruption and prosecute individuals who violate the Foreign Corrupt Practices Act.”

            Harder is charged with one count of conspiracy to violate the Foreign Corrupt Practices Act and Travel Act, five counts of violating the Foreign Corrupt Practices Act, five counts of violating the Travel Act, one count of conspiracy to commit international money laundering, and two counts of international money laundering. He faces a maximum possible statutory sentence of 190 years in prison, fines of up to $1.75 million, twice the value of the property involved in the transaction, or twice the value gained or lost.

            The case is being investigated by the FBI’s Philadelphia Division. Significant assistance was also provided by the Criminal Division’s Office of International Affairs. The case is being prosecuted by Assistant U.S. Attorney Michelle Morgan of the Eastern District of Pennsylvania and Assistant Chief Leo R. Tsao of the Criminal Division’s Fraud Section.

              An Indictment, Information or Criminal Complaint is an accusation.  A defendant is presumed innocent unless and until proven guilty.

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