Deep Dive into the Telefonica DOJ Enforcement Action

Corruption Crime & Compliance

What does it take for a global telecom giant to get caught up in a bribery scheme involving over $85 million—and what can we learn from their mistakes? How do companies like Telefónica Venezolana manage to conceal millions in bribes through inflated contracts and shell companies, and why do these schemes so often fly under the radar?

This episode dives into Telefónica Venezolana's $85.2 million settlement with the DOJ for bribery violations under the FCPA. Michael Volkov unpacks how the Venezuelan subsidiary exploited a government-controlled currency auction system, paid nearly $29 million in bribes, and concealed it through inflated equipment purchases. The case reveals systemic flaws and offers essential lessons on preventing corporate misconduct.

You’ll hear him discuss:

• How Telefónica Venezuela used inflated supplier contracts to fund $28.9 million in bribes
• The role of shell companies and intermediaries in concealing bribery schemes
• How bribery enabled access to $110 million in undervalued U.S. currency
• DOJ's assessment of cooperation, compliance efforts, and penalty reductions
• Telefónica’s failure to address red flags in its financial controls and due diligence processes
• The importance of vetting third parties and managing high-risk transactions
• How Telefónica implemented compliance reforms, including anti-corruption measures and internal audits
• Lessons for compliance professionals on detecting and preventing similar schemes

Resources

Michael Volkov on LinkedIn | Twitter

The Volkov Law Group