Embraer paid $5.76 million to shell company for Indian Air Force Plane Deal

Embraer paid $5.76 million to shell company for Indian Air Force Plane Deal :- Washington On Tuesday, the US Department of Justice said that Embraer which is the Brazilian aircraft manufacturer,  paid US $ 5.76 million to a shell company in connection with a contract it secured to sell the Indian Air Force (IAF) three aircraft for about US $  208 million.

As per the Justice Department announcement that Embraer entered into a resolution and agreed to pay US $ 205 million to resolve charges of corruption and making bribe payments to foreign nations, including to an agent in India for the IAF deal.


The Brazilian Aircraft Manufacturer – Embraer will pay a penalty of over US $ 107 million in connection with schemes involving bribery of government officials in the Mozambique, Saudi Arabia, Dominican Republic, and millions more over falsely recorded payments in India through a sham agency agreement.

The Justice Department said that Embraer earned profits nearly US $ 84 million on the aircraft sale to India. Embraer paid an agent US $ 5.76 million in the year 2009 pursuant to a false agency agreement with a shell company in connection with a contract it secured to sell the IAF three aircraft for approximately US $ 208 million.

Asst. Attorney General – Leslie R Caldwell said that Embraer paid millions of dollars in bribes to win government aircraft contracts in three different continents.

Asst. Special Agent in Charge – William J Maddalena said that Embraer tried to bribe their way into several profitable aircraft contracts around the world.

As per the court documents, on 3rd July, 2008, Embraer executed a contract to provide 3 highly specialised military aircraft to the Indian Air Force for nearly US $ 208 million.

Federal prosecutors said that Embraer, in January 2005, executed an agency agreement with a shell company domiciled in the UK and affiliated with Agent D (although the name never appeared in the agreement).

Embraer agreed to pay the shell company a commission of nine per cent of the value of any defence contracts under the agency agreement.

Federal Prosecutors said that Embraer personnel thought the agreement with Agent D was illegal under Indian law and thus took steps to conceal its existence, including secreting the sole fully-executed version of the agreement in a safe deposit box in London that could be opened only when both an Embraer employee and Agent D or an associate of Agent D were present.

US Federal prosecutors alleged that the Singaporean shell company never performed any services related to that sale or to the sale to the IAF.

The same day that the agency agreement was executed, the Singaporean shell company delivered three invoices to ECC, each for US $ 1.92 million. Through ECC, Embraer remitted three payments to the shell company shortly thereafter.

The Justice Department alleged that the books and the record of Embraer did not reflect that this transaction was related to its arrangement with Agent D.