b'The DOJ did not just focus on Sargeant; but it alsoof assets and funds allowed them to pay bribes to the brought FCPA charges against several of the individualsFinance Minister without having to report it on Pilgrims involved in the unlawful scheme. Including Sargeantspublic books and records. Additionally, the Batistas senior executive, Daniel Sargeant. Between Septemberconcealed their corrupt scheme to Pilgrims accountants 2017 and December 2019, the named individuals alland independent auditors.pleaded guilty to the FCPA charges for their roles in theTo facilitate their arrangement with the Minister, and scheme and are currently awaiting sentencing.to conceal the transfer of bribery funds from Pilgrims management, Joesley Batista created several shell In the Matter of J&F Investimentos, companies, opened bank accounts for the shell compa-S.A. et al., No. 3-20124 and nies at a U.S. investment bank, and then made deposits United States v. J&F Investimentos SA into the investment bank for the Minister. Between 2010 and 2012, the Batistas provided the Finance Minister (E.D. N.Y.) 20-CR-00365-MKB with $150 million in illicit payments via the U.S. invest-On October 14, 2020, U.S. regulators announcedment bank. The money came directly out of JBSs oper-resolutions with Brazilian nationals Joesley Batista andating accounts, which were comingled with Pilgrims Wesley Batista (the Batistas) and their two compa- operating accounts. The SEC found that the Batistas, in nies, J&F Investimentos, S.A. (J&F), a Brazilian privatetheir capacity as Pilgrim directors, signed Form 10-Ks investment holding company, and JBS S.A. (JBS), aon behalf of Pilgrim that omitted all of the transactions Brazilian global meat and protein producer, for viola- related to the bribery scheme. tions of the FCPA and the Securities Exchange Act ofRegulators noted that Pilgrim failed to enact a code of 1934.conduct until 2015, more than five years after being JBS, which J&F controls, is the largest meat and proteinacquired by the Batistas; never had a formal anti-producer in the world with net revenues in 2019 inbribery and compliance program; and completely excess of $50 billion. In 2009, the Batistas engaged inlacked compliance personnel. As a result, the Batistas efforts to expand their business into the United Stateswere able to successfully conceal their bribery scheme meat market by acquiring a variety of U.S. meat compa- from Pilgrims management until May 2017. By the time nies, which they structured as JBS USA. The majorityPilgrims management team learned of the bribery of the allegations stem from JBS December 2009scheme and the Batistas resigned from the Pilgrim acquisition of a Colorado chicken and pork producerboard in mid-2017, the Batistas had indirectly received and distributor, Pilgrims Pride Corporation (Pilgrim),approximately $800 million as a result of the dividends for $800 million. At the time of the acquisition in 2009,paid by Pilgrim to JBS USA. Pilgrims was under Chapter 11 bankruptcy protection.DOJ ResolutionAccording to the settlement agreement, the BatistasJ&F entered a guilty plea to one count of conspiracy to devised a bribery scheme to secure enough funds toviolate the anti-bribery provisions of the FCPA. It also have Pilgrim exit bankruptcy under their control.entered into a cooperation agreement with the Criminal To successfully secure the Pilgrim acquisition, theDivisions Fraud Section and the U.S. Attorneys Office Batistas and their companies admitted to making illicitfor the Eastern District of New York, agreeing to payments, totaling $150 million between 2009 andcontinue to cooperate with the U.S. government in any 2015, to Brazils then Finance Minister and variousongoing or future criminal investigations concerning Brazilian political parties and candidates. In return, theJ&F, its executives, employees, or agents; enhance its Finance Minister and the political parties helped thecompliance program; and report to the government Batistas and their companies obtain $2 billion in equityon the implementation of its enhanced compliance financing from the Brazilian National Developmentprogram. J&F agreed to pay over $256 million in Bank. That equity financing made the Baptistas acquisi- combined criminal penalties. While the DOJs resolution tion of Pilgrim through the bankruptcy process possible.with J&F considered J&Fs failure to voluntarily disclose Following the acquisition, Wesley Batista served as thethe conduct to the department and the nature, serious-CEO of JBS and Chairman of the Board for Pilgrim, andness, and pervasiveness of the offense, the criminal Joesley Batista served as CEO of J&F and a membermonetary penalty reflects a 10 percent reduction off the of the Board of Pilgrim. Unbeknownst to the rest ofbottom of the U.S. Sentencing Guidelines fine range Pilgrims management, the Batistas began to cominglebecause J&F received partial credit for its remediation JBSs operating accounts with Pilgrims operatingand cooperation with the departments investigation.accounts through intercompany transfers, special divi- SEC Resolutiondends, and other means. According to the settlementThe SEC charged violations of the books and records agreement, the Batistas admitted that the cominglingand internal accounting controls provisions of the 19'