PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGED ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP
MEMORANDUM
TO: Dimitra Karavelis-Stavrou, General Counsel & Chief Compliance Officer, Thalassa Shipping & Logistics SA
FROM: Victoria Chambers; Jasmine Thornton; Liam Donahue
DATE: August 1, 2022
RE: Preliminary Scoping Memorandum — FCPA Internal Review, Matter No. 1044-00007
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I. EXECUTIVE SUMMARY
Calderwood & Harkness LLP ("C&H") has completed a preliminary scoping review of available materials related to payments made by Thalassa West Africa SARL ("TWA"), a wholly owned subsidiary of Thalassa Shipping & Logistics SA ("TSL" or the "Company"), to Goldenshore Maritime Consultants Ltd. ("Goldenshore") under the Port Agency and Facilitation Services Agreement dated March 1, 2018 (the "Agency Agreement"). This memorandum was prepared at the direction of Dimitra Karavelis-Stavrou, General Counsel and Chief Compliance Officer of TSL, and is intended to be protected in its entirety by the attorney-client privilege and the work-product doctrine.
The purpose of this memorandum is threefold: (i) to summarize C&H's initial findings based on materials collected and reviewed to date; (ii) to identify key risk areas warranting further investigation; and (iii) to outline the additional investigation steps that we recommend the Company authorize in order to develop a complete factual record and assess the Company's legal exposure. The materials reviewed in connection with this scoping exercise include the Agency Agreement, a sample of twenty-three (23) Goldenshore invoices from a partial production of approximately 340 pages received on September 2, 2022, TWA operational logs covering calendar years 2018 through 2022, the whistleblower complaint letter dated June 3, 2022, TSL's "Global Anti-Bribery Policy" dated November 2016, and publicly available corporate registry and government personnel records.
Based on our preliminary review, we have identified several significant red flags suggesting that certain "expediting fees" paid by TWA to Goldenshore may have been used, in whole or in part, to make improper payments to officials at the Port Autonome d'Abidjan (the autonomous port authority of Côte d'Ivoire) and potentially the Nigeria Ports Authority. If the underlying facts are confirmed through further investigation, the payments at issue may constitute a violation of the anti-bribery provisions of the Foreign Corrupt Practices Act of 1977, as amended ("FCPA") (15 U.S.C. §§ 78dd-1 et seq.). While additional factual development is necessary before definitive conclusions can be reached, the preliminary evidence is sufficiently concerning to warrant immediate investigative action and certain interim protective measures, as detailed herein.
The aggregate amount of expediting fees paid to Goldenshore during the relevant period — from March 2018 through May 2022 — totals approximately €876,000. The Company's preliminary exposure, if a violation is ultimately established, may include Department of Justice ("DOJ") anti-bribery fines in the range of $920,000 to $1,840,000, Securities and Exchange Commission ("SEC") disgorgement of between $1,260,000 and $3,675,000, and potential cross-default exposure under the Company's $120 million revolving credit facility with Meridian Atlantic Bank NA. These estimates are subject to material revision as additional facts become available.
II. BACKGROUND
A. The Whistleblower Complaint
On or about May 15, 2022, an individual identified only as "WB-1" filed a tip with the SEC's Office of the Whistleblower. The tip was assigned SEC Tip, Complaint, or Referral Number 2022-WB-08341 (the "TCR"). The specific content of the SEC tip is not known to C&H, as TCR filings are confidential and are not disclosed to the subject company.
On June 3, 2022, counsel for WB-1 — Marcus Hartwell of Hartwell & Crane PLLC, located at 1225 Connecticut Avenue NW, Suite 800, Washington, DC 20036 — transmitted a letter (the "Hartwell Letter") to Dimitra Karavelis-Stavrou in her capacity as General Counsel of TSL. The Hartwell Letter was received at TSL's registered offices in Piraeus on June 7, 2022. The Hartwell Letter did not identify WB-1 by name, but it set forth a series of factual allegations in sufficient detail to indicate that WB-1 possesses first-hand or near-first-hand knowledge of TWA's operations in West Africa.
The substance of the allegations contained in the Hartwell Letter may be summarized as follows: Cédric Anouma, Managing Director of TWA (an Ivorian national, age 44, who has been employed by the Thalassa group since 2011), directed Goldenshore Maritime Consultants Ltd. to make cash payments to officials at the Port Autonome d'Abidjan and the Nigeria Ports Authority in exchange for the following benefits:
(i) priority berthing assignments for Thalassa vessels calling at the Port of Abidjan and, to a lesser extent, the Port of Lagos;
(ii) expedited customs clearance for cargo consignments handled by TWA and Thalassa Nigeria Ltd. ("TNL"); and
(iii) waiver or reduction of container-inspection fees that would otherwise be assessed by port authorities upon arrival and discharge of cargo.
The alleged period of improper conduct is March 2018 to the present, a timeframe that is coterminous with the term of the Goldenshore Agency Agreement. The Hartwell Letter states that WB-1 has "documentary and testimonial evidence" supporting the allegations, though no such evidence was enclosed with the letter or has been subsequently provided to TSL.
Based on the nature and specificity of the allegations, C&H believes that WB-1 is likely a former mid-level employee of TWA based in Abidjan, possibly within the finance or operations function. The identity of WB-1 remains unknown to C&H and to the Company. We note that the Hartwell Letter does not identify the SEC staff attorney assigned to the TCR, and C&H has not made any contact with the SEC regarding this matter. No formal inquiry, subpoena, voluntary request for documents, or enforcement action has been initiated by either the DOJ or the SEC as of the date of this memorandum.
B. The Agency Agreement
The agreement at the center of the investigation is titled "Port Agency and Facilitation Services Agreement" (the "Agency Agreement"). The Agency Agreement was executed with an effective date of March 1, 2018. The contracting parties are Thalassa West Africa SARL, a société à responsabilité limitée organized under the laws of Côte d'Ivoire (as "Principal"), and Goldenshore Maritime Consultants Ltd., a limited company registered in the Republic of Ghana (as "Agent").
Goldenshore Maritime Consultants Ltd. maintains its registered office at 12 Independence Avenue, Tema New Town, Tema, Ghana. Goldenshore's principal — and, until recently, its only known beneficial owner — is Kofi Mensah Asante, a Ghanaian national, age 48, who serves as Managing Director. As discussed in detail in Section III.1 below, C&H's preliminary due diligence has revealed a previously undisclosed 40% shareholder, Moussa Diallo, whose relationship to a senior Ivorian port official raises significant concerns.
The term of the Agency Agreement is three years from the effective date, with automatic renewal for successive one-year periods unless either party provides written notice of non-renewal at least ninety (90) days prior to the expiration of the then-current term. No notice of non-renewal has been delivered by either party. Accordingly, the Agency Agreement auto-renewed for a one-year term through February 28, 2022, and again through February 28, 2023.
The scope of services under the Agency Agreement encompasses port agency services at four West African ports: Abidjan and San Pedro in Côte d'Ivoire, Lagos (Apapa Terminal) in Nigeria, and Tema in Ghana. Goldenshore's responsibilities include, inter alia, coordinating vessel port calls, managing port disbursement accounts, liaising with port authorities and customs officials, and arranging pilotage, towage, and stevedoring services.
The Agency Agreement provides for two categories of compensation:
(1) Commission: A commission equal to 3.5% of total port disbursements handled by Goldenshore on behalf of TWA. This commission is invoiced monthly and has been paid consistently throughout the term of the agreement. Total commissions paid from March 2018 through May 2022 amount to approximately €2,140,000.
(2) Expediting Fees: Separately invoiced fees described in the Agency Agreement as "Port Expedition and Government Liaison Services." The Agency Agreement does not impose a cap on the aggregate amount of expediting fees, nor does it specify the types of services encompassed by this category. The invoicing and payment of expediting fees are approved at the sole discretion of Cédric Anouma, Managing Director of TWA, without any requirement for secondary approval from TSL headquarters in Piraeus or from the Company's Chief Financial Officer.
Of particular concern, Article 14 of the Agency Agreement contains an anti-corruption clause that is generic and materially deficient. The clause consists of a single paragraph in which the Agent represents that it will comply with "all applicable anti-bribery laws." However, Article 14 notably lacks:
(a) any specific reference to the FCPA or other named anti-corruption statutes (such as the U.K. Bribery Act 2010 or the OECD Anti-Bribery Convention);
(b) audit rights for the Principal, which would permit TSL or TWA to inspect Goldenshore's books, records, and accounts;
(c) any requirement for third-party due diligence on the Agent's beneficial owners, directors, officers, or key personnel; and
(d) a termination-for-cause provision specifically tied to anti-corruption violations or breach of the anti-corruption representation.
The absence of these standard protective provisions is itself a significant compliance deficiency. As discussed in Section III.7 below, the Agency Agreement's anti-corruption clause falls well below accepted best practices and the expectations articulated in the DOJ's Evaluation of Corporate Compliance Programs guidance (updated June 2020).
C. Payment Summary
Based on our review of available TWA financial records and Goldenshore invoices, total payments made by TWA to Goldenshore from March 2018 through May 2022 are as follows:
• Commissions (3.5% of port disbursements): €2,140,000
• Expediting fees ("Port Expedition and Government Liaison Services"): €876,000
• Total payments: €3,016,000
The expediting fees — which are the primary focus of this investigation — break down by year as follows:
Several observations regarding the fee pattern merit attention. First, the annualized 2022 run rate — calculated as €158,000 × (12 ÷ 5) — equals approximately €379,200, which would represent a further substantial escalation if the trajectory continues. Second, the annualized 2018 figure — calculated as €127,000 × (12 ÷ 10) — equals approximately €152,400. Third, there is a marked increase from the annualized 2018 figure (€152,400) to the full-year 2021 figure (€238,000), representing a 56.2% increase on an annualized basis and an 87.4% increase in nominal terms between the 2018 partial-year and 2021 full-year figures. The 2020 dip to €164,000 is plausibly attributable to COVID-19-related port slowdowns that affected West African ports during that year, but the subsequent rebound in 2021 and 2022 is notable.
Individual expediting-fee invoices range from €4,500 to €18,750 per invoice. TWA typically received between two and five such invoices per month from Goldenshore, though the frequency and amounts varied without any discernible pattern tied to operational volume. Many of the invoiced amounts are round numbers — a characteristic that, while not conclusive, is frequently cited in FCPA enforcement actions as indicative of fabricated or inflated invoices.
All payments — both commissions and expediting fees — were made by wire transfer from TWA's operating account at Banque Equatoriale de Commerce SA (Abidjan, Côte d'Ivoire) to Goldenshore's account at Ashanti Continental Bank (Tema, Ghana). As discussed in Section III.5 below, a subset of these wire transfers was routed through U.S. correspondent banking channels, establishing a jurisdictional nexus under the FCPA.
D. Thalassa Corporate Overview (Contextual)
To provide context for the analysis that follows, we briefly summarize the relevant features of the Thalassa corporate structure.
Thalassa Shipping & Logistics SA ("TSL") is a Société Anonyme organized under the laws of the Hellenic Republic, with its registered office at 14 Poseidonos Avenue, Piraeus 185 31, Greece. TSL was founded in 1997 by Nikolaos Karavelis, a Greek national, age 71, who remains the controlling shareholder with a 68% equity interest and serves as Chairman of the Board of Directors. Mr. Karavelis personally approved major agency contracts in West Africa until 2018, at which point approval authority for such arrangements was delegated to regional subsidiary management — a delegation that, as the present matter illustrates, may not have been accompanied by adequate oversight mechanisms.
TSL reported consolidated revenue of €487 million and EBITDA of €61.3 million for fiscal year 2021, per audited financial statements prepared by Kouvalis & Demopoulos SA, a Greek auditing firm. TSL operates a fleet of forty-six (46) vessels, consisting of thirty-four (34) dry-bulk and general-cargo vessels and twelve (12) container feeders. The Company employs approximately 2,400 personnel globally, across its headquarters in Piraeus and subsidiary operations in West Africa, Northern Europe, and Southeast Asia.
TSL's Chief Financial Officer is Alexandros Fitsakis, a Greek national, age 54, who was formerly employed in the audit practice of Kouvalis & Demopoulos SA and joined TSL in 2009. Mr. Fitsakis has overall responsibility for the Company's financial reporting, internal controls, and treasury functions.
Thalassa West Africa SARL ("TWA") is a société à responsabilité limitée organized under the laws of the Republic of Côte d'Ivoire, with its registered office at Rue des Lagunes 27, Zone Portuaire, Abidjan. TWA reported revenue of €38.2 million for fiscal year 2021 and employs approximately 145 persons. TWA is managed by Cédric Anouma, an Ivorian national, age 44, who has been with the Thalassa group since 2011 and who holds sole signatory authority over TWA's operating accounts at Banque Equatoriale de Commerce SA. Mr. Anouma is the individual who authorized all expediting-fee payments to Goldenshore.
Thalassa Nigeria Ltd. ("TNL") is a private limited company organized under the laws of the Federal Republic of Nigeria, with its registered office at 5B Apapa-Oshodi Expressway, Apapa, Lagos. TNL reported revenue of €22.7 million for fiscal year 2021 and employs approximately 90 persons. TNL is managed by Emeka Obiora, a Nigerian national, age 51, who has been with the Thalassa group since 2014. Mr. Obiora is a co-signatory with Mr. Anouma on certain inter-company fund transfers between TWA and TNL, a fact that may be relevant to the scope of the investigation depending on whether any improper payments were directed to Nigerian port officials.
III. KEY RED FLAGS
Our preliminary scoping review has identified seven (7) red flags that, individually and collectively, raise serious concerns regarding the legitimacy of the expediting fees paid to Goldenshore. Each red flag is discussed in detail below.
1. Undisclosed Government Affiliation of Beneficial Owner
Perhaps the most significant finding of our preliminary review concerns the beneficial ownership of Goldenshore Maritime Consultants Ltd. Based on our review of corporate registry filings obtained from the Ghana Registrar-General's Department and publicly available Ivorian government personnel records, C&H has identified that Moussa Diallo, an Ivorian national, age 42, holds a 40% equity interest in Goldenshore as a silent partner. Mr. Diallo's ownership interest was not reflected in any materials provided to TSL or TWA in connection with the execution of the Agency Agreement, nor has it been disclosed at any point during the four-year course of dealing between the parties.
The significance of Mr. Diallo's ownership is as follows: Mr. Diallo is the brother-in-law of Captain Ibrahim Touré, an Ivorian national, age 56, who serves as Director of Port Operations at the Port Autonome d'Abidjan. The Port Autonome d'Abidjan is an Ivorian governmental entity established by decree, and Captain Touré is a senior official within that entity. Captain Touré exercises direct authority over, among other matters, vessel berthing assignments, the scheduling and dispatch of port inspections, and the assessment and collection of port-related fees and charges.
The relationship between Mr. Diallo and Captain Touré was not disclosed to TSL or TWA at the time the Agency Agreement was executed or at any point thereafter. Mr. Diallo has no apparent maritime industry experience, background, or credentials that would explain his investment in a maritime consulting firm. His participation in Goldenshore's ownership structure, combined with his familial connection to the senior official alleged to be the ultimate beneficiary of the improper payments, is a classic FCPA red flag.
Captain Touré is the individual alleged by WB-1 to be the ultimate recipient of a portion of the expediting fees routed through Goldenshore. The undisclosed Diallo ownership stake provides a plausible conduit mechanism through which funds could flow from Goldenshore to Captain Touré, either through profit distributions, informal cash payments, or other means that C&H has not yet been able to trace.
2. Lack of Supporting Documentation
The twenty-three (23) expediting-fee invoices reviewed to date — drawn from the partial document production of approximately 340 pages — are remarkably devoid of substantive detail. Each invoice contains only a single-line description of the purported services, typically in a format such as "port expedition — Abidjan — vessel MV Aegean Horizon" or "government liaison services — Lagos — MV Thalassa Pioneer." No invoice reviewed to date contains any of the following:
• A description of the specific nature of the services rendered;
• The identity of the government officials, agencies, or third parties with whom Goldenshore interacted on behalf of TWA;
• An allocation or breakdown of how the invoiced amount was applied or disbursed;
• Work orders, service requests, or authorizations from TWA personnel;
• Receipts, vouchers, or other documentation of underlying costs or expenditures;
• Time records, activity logs, or other evidence of work performed; or
• Third-party payment breakdowns or evidence of sub-contracted services.
The absence of any supporting documentation is inconsistent with legitimate agency services, which would ordinarily be accompanied by at least basic records of the activities undertaken on the principal's behalf. The lack of documentation also frustrates any effort to verify whether the invoiced amounts bear any reasonable relationship to actual services rendered. This deficiency is a well-recognized red flag in FCPA enforcement actions and is frequently cited by the DOJ and SEC as evidence of a corrupt payment scheme.
3. Escalating Fee Pattern
The expediting fees paid to Goldenshore have increased substantially over the relevant period, in a manner that is disproportionate to any corresponding increase in TWA's operational activity. In nominal terms, expediting fees increased by 87.4% from 2018 (€127,000 for a ten-month period) to 2021 (€238,000 for a full year), calculated as (€238,000 − €127,000) ÷ €127,000 = 87.4%. On an annualized basis, the increase from 2018 (€152,400 annualized) to 2021 (€238,000) was 56.2%, calculated as (€238,000 − €152,400) ÷ €152,400 = 56.2%.
The 2022 year-to-date trajectory is even more pronounced. As noted above, the annualized 2022 run rate of approximately €379,200 would represent a 59.3% increase over the 2021 full-year figure and a 148.8% increase over the annualized 2018 figure.
Critically, there is no corresponding increase in TWA's vessel-call volume or port activity that would explain this escalation. TWA's vessel-call log shows a modest increase of approximately 12% over the same period — from 174 vessel calls in the ten-month period of 2018 (annualized to approximately 208.8 calls) to 234 vessel calls in 2021. The growth in expediting fees is thus dramatically disproportionate to the growth in operational volume. A 56.2% increase in fees against a 12% increase in vessel calls suggests that the fees are not driven by operational necessity but by other factors that warrant further investigation.
4. Temporal Correlation with Favorable Outcomes
C&H cross-referenced the twenty-three (23) sample expediting-fee invoices against TWA's operational logs — specifically, the vessel-call records, berthing assignment schedules, and customs-clearance timestamps maintained by TWA's operations staff in Abidjan. The results are striking: in seventeen of the twenty-three instances reviewed (73.9%), a favorable berthing assignment or expedited customs clearance event was recorded within forty-eight (48) hours of the corresponding Goldenshore invoice date.
This temporal correlation is significant because it suggests that the expediting-fee invoices are not for general, ongoing agency services but are instead linked to specific favorable outcomes — outcomes that, by their nature, involved the exercise of discretionary authority by port officials. The pattern is consistent with a pre-arranged or quid-pro-quo payment structure in which Goldenshore invoices TWA only after (or contemporaneously with) the delivery of a specific benefit, such as a priority berth or an expedited clearance. While the sample size is limited and additional data points are needed, the preliminary finding is concerning and warrants systematic analysis across the full population of invoices.
5. Payment Routing Through U.S. Correspondent Bank
Our review of TWA bank statements and wire transfer confirmation records has identified that at least fourteen (14) wire transfers from TWA's operating account at Banque Equatoriale de Commerce SA (Abidjan, Côte d'Ivoire) to Goldenshore's account at Ashanti Continental Bank (Tema, Ghana) were routed through the New York branch of Meridian Atlantic Bank NA, which served as the U.S. dollar correspondent bank for the transactions. The aggregate amount of these fourteen transfers is approximately $423,000 (United States Dollars).
This finding has critical jurisdictional implications. Under Section 78dd-3 of the FCPA, any person (including a non-U.S. company) who, "while in the territory of the United States," uses the mails or "any means or instrumentality of interstate commerce" in furtherance of a corrupt payment to a foreign official is subject to FCPA liability. Federal courts have consistently held that the routing of wire transfers through U.S. correspondent bank accounts constitutes use of instrumentalities of interstate commerce within the territory of the United States, even where neither the sender nor the recipient of the transfer is located in the United States. See, e.g., United States v. Hoskins, 902 F.3d 69 (2d Cir. 2018); SEC v. Straub, 921 F. Supp. 2d 244 (S.D.N.Y. 2013).
The routing of payments through Meridian Atlantic Bank NA's New York branch thus establishes a jurisdictional nexus sufficient to bring the payments within the reach of the FCPA's anti-bribery provisions. This nexus exists regardless of whether TSL, TWA, or Goldenshore specifically intended to route the payments through the United States; it is the use of the U.S. financial system, not the intent to create U.S. jurisdiction, that triggers liability.
6. Absence of Pre-Engagement Due Diligence
Our review has revealed that neither TSL nor TWA conducted any anti-corruption due diligence on Goldenshore Maritime Consultants Ltd. or its principals — including Kofi Mensah Asante and Moussa Diallo — prior to or after the execution of the Agency Agreement. Specifically, no evidence exists of any of the following:
• Know-Your-Customer ("KYC") screening or verification;
• Background checks on Goldenshore's directors, officers, or beneficial owners;
• Beneficial-ownership inquiries or verification against corporate registry records;
• Due-diligence questionnaires submitted to or completed by Goldenshore;
• Anti-corruption compliance certifications executed by Goldenshore or its principals;
• Reference checks with other shipping companies or industry contacts regarding Goldenshore's reputation;
• Screening against sanctions lists (OFAC SDN List, EU Consolidated List, UN Sanctions List); or
• Any assessment of Goldenshore's connections, if any, to government officials or politically exposed persons.
The complete absence of pre-engagement due diligence is a significant compliance failure. The DOJ's Evaluation of Corporate Compliance Programs guidance identifies third-party management as a core pillar of an effective compliance program, and it specifically asks whether the company has "appropriate risk-based due diligence on third-party partners" and whether that due diligence is "integrated into the relevant procurement and vendor management process." The failure to conduct any due diligence whatsoever on an agent operating in a high-risk region (West Africa) and providing services that involve interaction with government officials (port authorities and customs agencies) represents a serious departure from accepted compliance standards. Had even basic due diligence been performed, the Diallo ownership interest and the Touré connection might have been identified prior to or shortly after the commencement of the agency relationship.
7. Inadequate Compliance Infrastructure
TSL's anti-corruption compliance program is documented in a fourteen-page document titled "Global Anti-Bribery Policy," dated November 2016 (the "Policy"). Our review of the Policy has identified the following material deficiencies:
• The Policy does not address third-party agent due diligence in any respect. It contains no procedures, standards, or requirements for evaluating the anti-corruption risk profile of agents, consultants, intermediaries, or other third-party business partners.
• The Policy does not require FCPA-specific training for personnel operating in West Africa or any other high-risk jurisdiction. In fact, the Policy does not establish any training requirements at all, whether mandatory or voluntary.
• The Policy does not mention the FCPA by name. It refers only in general terms to "applicable anti-bribery and anti-corruption laws" without identifying any specific statute or regulatory framework.
• The Policy does not establish gift-and-hospitality thresholds or pre-approval requirements. There is no de minimis threshold, no aggregate annual limit, and no requirement for supervisor or compliance-officer approval of gifts, meals, entertainment, or travel provided to or received from government officials.
• The Policy does not provide a mechanism for reporting suspected violations. There is no whistleblower hotline, no anonymous reporting channel, and no designated compliance point of contact. The Policy states only that employees should "report concerns to their supervisor," without addressing the scenario in which the supervisor is the source of the concern.
• The Policy has not been updated, revised, or supplemented since its adoption in November 2016 — a period of nearly six years. During this period, significant developments have occurred in FCPA enforcement, including the issuance and revision of the DOJ's Evaluation of Corporate Compliance Programs guidance, updates to the DOJ Corporate Enforcement Policy, and numerous enforcement actions involving the shipping and maritime industry.
The cumulative effect of these deficiencies is that TSL's compliance infrastructure, at the time of the events under investigation, was materially inadequate to detect, prevent, or remediate corrupt payments by subsidiaries or their agents. This conclusion has implications both for the Company's potential exposure and for the remediation measures that will be necessary regardless of the ultimate outcome of the investigation.
IV. FCPA ANALYSIS — PRELIMINARY
A. Jurisdictional Basis
The FCPA's anti-bribery provisions reach three categories of persons and entities. First, Section 78dd-1 applies to "issuers" — that is, companies that have a class of securities registered under Section 12 of the Securities Exchange Act of 1934 or that are required to file periodic reports under Section 15(d) of that Act. Second, Section 78dd-2 applies to "domestic concerns," defined as any citizen, national, or resident of the United States, or any entity organized under the laws of a State of the United States or having its principal place of business in the United States. Third, Section 78dd-3 applies to "any person" — including a foreign national or foreign company — who, "while in the territory of the United States," directly or through an agent, makes use of "the mails or any means or instrumentality of interstate commerce or . . . any other act in furtherance of" a corrupt payment to a foreign official.
TSL is a Société Anonyme organized under the laws of the Hellenic Republic. It is not an "issuer" within the meaning of Section 78dd-1: TSL has no class of securities registered under Section 12 of the Exchange Act, no American Depositary Receipts listed on any U.S. exchange, and no obligation to file periodic reports with the SEC under Section 15(d). TSL is likewise not a "domestic concern" within the meaning of Section 78dd-2: it is not organized under the laws of any U.S. state, it does not have its principal place of business in the United States, and it is not a U.S. citizen, national, or resident.
However, the routing of at least fourteen (14) wire transfers through the New York branch of Meridian Atlantic Bank NA — aggregating approximately $423,000 — constitutes the use of "the mails or any means or instrumentality of interstate commerce" while "in the territory of the United States" within the meaning of Section 78dd-3. The clearing of U.S. dollar-denominated wire transfers through New York correspondent bank accounts has been repeatedly held by federal courts to satisfy the territorial jurisdiction requirement of Section 78dd-3, even where the transfer originates and terminates outside the United States. Accordingly, TSL and its subsidiaries are potentially subject to FCPA anti-bribery liability under the territorial jurisdiction provision.
Additional U.S. nexus points further strengthen the jurisdictional basis:
• Meridian Atlantic Credit Facility. TSL maintains a $120 million revolving credit facility with Meridian Atlantic Bank NA, pursuant to a Credit Agreement dated January 15, 2020. As of June 30, 2022, $74 million was drawn under this facility. Section 5.18 of the Credit Agreement contains anti-corruption representations and covenants pursuant to which TSL has represented and warranted that it and its subsidiaries are in compliance with all applicable anti-corruption laws, including the FCPA. The existence of this credit relationship with a U.S. financial institution provides an additional nexus to the United States and creates independent contractual exposure, as discussed in Section V.6 below.
• Charter Revenue from U.S.-Based Traders. TSL charters vessels to U.S.-based commodity traders, including Ironwood Commodity Trading LLC (Houston, Texas) and Cascadia Grain Exports Inc. (Portland, Oregon), generating approximately $34 million in annual charter revenue denominated in U.S. Dollars. While these charter arrangements do not, by themselves, make TSL an "issuer" or "domestic concern," they contribute to the Company's overall U.S. commercial footprint and may be relevant to the DOJ's assessment of the significance of the U.S. nexus.
• U.S. Dollar Clearing. Beyond the fourteen identified wire transfers to Goldenshore, certain other transactions in the ordinary course of TSL's business are cleared through U.S. correspondent banks, reflecting the broader use of U.S. Dollar-denominated commerce in the maritime industry. The full extent of U.S. dollar clearing activity remains to be determined through forensic analysis.
B. Elements of an FCPA Violation
To establish an FCPA anti-bribery violation, the government must prove five elements:
(1) A payment, offer, promise to pay, or authorization of the payment of "anything of value";
(2) To a "foreign official" (defined to include any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organization), or to any person while knowing that all or a portion of such payment will be offered, given, or promised, directly or indirectly, to a foreign official;
(3) With a "corrupt" intent — that is, an intent to wrongfully influence the recipient;
(4) For the purpose of (a) influencing any act or decision of such foreign official in his or her official capacity, (b) inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official, or (c) securing any improper advantage; and
(5) In order to assist in obtaining or retaining business for or with, or directing business to, any person.
We apply each element to the facts developed to date:
Element 1 — "Anything of Value." The expediting fees paid by TWA to Goldenshore — totaling €876,000 over the relevant period, with individual invoices ranging from €4,500 to €18,750 — plainly constitute "anything of value." Courts and the DOJ/SEC have interpreted this element broadly to encompass cash payments, wire transfers, gifts, travel, entertainment, charitable contributions, and any other item or benefit of pecuniary value. There is no minimum threshold amount.
Element 2 — "Foreign Official" or Third-Party Intermediary. Captain Ibrahim Touré, Director of Port Operations at the Port Autonome d'Abidjan, is an officer or employee of an instrumentality of the government of Côte d'Ivoire and is therefore a "foreign official" within the meaning of the FCPA. Goldenshore serves as a third-party intermediary through which the payments are channeled. The undisclosed 40% ownership interest held by Moussa Diallo — Captain Touré's brother-in-law — creates a direct conduit between Goldenshore and a foreign official. If the facts alleged by WB-1 are confirmed, the expediting fees were paid to Goldenshore with knowledge (or at least a high probability, consciously avoided) that all or a portion of the payments would be passed through to Captain Touré or other port officials. The FCPA's knowledge standard encompasses not only actual knowledge but also "conscious disregard" and "deliberate ignorance" of the circumstances. 15 U.S.C. § 78dd-3(f)(3). Allegations regarding the Nigeria Ports Authority may implicate additional foreign officials, but the factual record on the Nigerian dimension is less developed at this stage.
Element 3 — "Corrupt" Intent. Corrupt intent may be established through direct or circumstantial evidence. In the present matter, corrupt intent may reasonably be inferred from the following circumstances: (a) the complete absence of documentation supporting the expediting-fee invoices; (b) the escalating fee pattern that is disproportionate to operational volume growth; (c) the temporal correlation between invoice dates and favorable port outcomes; (d) the concealment of Moussa Diallo's ownership interest and his familial relationship to Captain Touré; and (e) the failure to conduct any pre-engagement due diligence on Goldenshore or its principals. While none of these facts, standing alone, is conclusive, their cumulative weight is substantial.
Element 4 — Purpose of the Payment. The alleged purposes of the payments — priority berthing assignments, expedited customs clearance, and waiver or reduction of container-inspection fees — each constitute either the influencing of an official act, the inducement of an official to act in violation of a lawful duty, or the securing of an improper advantage. Priority berthing, in particular, involves the exercise of discretionary authority by port officials and is not a ministerial or routine function.
Element 5 — Business Nexus. The favorable port treatment allegedly obtained through the improper payments enabled TWA to operate its West African logistics operations more efficiently — with shorter vessel turnaround times, reduced port charges, and expedited cargo clearance — all of which contributed directly to TWA's ability to retain existing business and obtain new business. TWA generated €38.2 million in revenue in fiscal year 2021. The business nexus element is readily satisfied.
Based on the foregoing analysis, there is a reasonable basis to believe that the expediting fees paid to Goldenshore may satisfy each element of an FCPA anti-bribery violation. We emphasize, however, that this analysis is preliminary and is based on an incomplete factual record. Further investigation is necessary to confirm or refute these preliminary conclusions.
C. "Facilitating Payments" Exception
The FCPA contains a narrow statutory exception for "facilitating or expediting payments" made to a foreign official, party official, or candidate for the purpose of securing the performance of a "routine governmental action." 15 U.S.C. § 78dd-1(b). "Routine governmental action" is defined to include actions that are "ordinarily and commonly performed by a foreign official" in connection with, among other things, obtaining permits, processing governmental papers such as visas and work orders, providing police protection, mail pick-up and delivery, scheduling inspections associated with contract performance or transit of goods, and providing utilities, loading and unloading cargo, and protecting perishable products from deterioration. 15 U.S.C. § 78dd-1(f)(3)(A).
It is conceivable that one could argue that certain port-related payments fall within this exception — for example, payments to expedite the routine processing of vessel-arrival documentation or the scheduling of standard cargo inspections. However, we believe that the facilitating-payments exception is unlikely to apply to the payments at issue here, for the following reasons:
• The exception is narrowly construed. Both the DOJ and the SEC have emphasized that the facilitating-payments exception is narrow and does not extend to payments intended to influence the exercise of discretion by a government official. Priority berthing assignments — the selection of which berth a vessel will occupy and when — are discretionary decisions that involve the allocation of a limited resource. The selective waiver or reduction of inspection fees likewise involves the exercise of official discretion rather than the performance of a routine function. These are precisely the types of actions that fall outside the scope of the exception.
• The magnitude and pattern of fees are inconsistent with facilitation. The aggregate amount of €876,000 in expediting fees over approximately four years, with individual invoices as high as €18,750, significantly exceeds what would reasonably be expected for routine facilitation payments. Facilitation payments are, by their nature, small-scale and incidental — tips or gratuities to minor functionaries to perform their ordinary duties. The scale and escalating trajectory of the payments at issue are inconsistent with this characterization.
• The lack of documentation is inconsistent with legitimate facilitation. Even if the facilitating-payments exception were otherwise applicable, the Company bears the burden of establishing that the exception applies. The complete absence of supporting documentation for the expediting-fee invoices — no descriptions of services, no identification of recipients, no allocation of funds — makes it effectively impossible to demonstrate that specific payments were for the performance of routine governmental actions.
• The round-number invoicing pattern is problematic. Many of the expediting-fee invoices are for round amounts (e.g., €5,000, €7,500, €10,000, €15,000), which is inconsistent with invoices that reflect actual costs incurred for specific routine services.
We recommend that further investigation be conducted to determine whether any individual payments may arguably qualify under the exception, but we caution that the overall pattern makes a facilitating-payments defense untenable for the program as a whole.
It is also worth noting that the facilitating-payments exception has been eliminated under the U.K. Bribery Act 2010 and under the anti-bribery legislation of most other OECD member states. While the U.K. Bribery Act may not directly apply to TSL, the trend in international anti-corruption enforcement is toward the elimination of this exception, and the DOJ and SEC have shown decreasing receptiveness to facilitating-payments arguments in recent years.
D. Books and Records / Internal Controls
The FCPA also includes books-and-records provisions (15 U.S.C. § 78m(b)(2)(A)) and internal-controls provisions (15 U.S.C. § 78m(b)(2)(B)), which require issuers to make and keep books, records, and accounts that accurately and fairly reflect the transactions and dispositions of the issuer's assets, and to devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that transactions are authorized and recorded in conformity with generally accepted accounting principles.
In the present matter, the books-and-records and internal-controls provisions are potentially implicated by TWA's treatment of the expediting fees. The single-line invoice descriptions ("port expedition — Abidjan — vessel MV Aegean Horizon") do not accurately reflect the nature, purpose, or ultimate disposition of the payments. If the payments were in fact used, in whole or in part, to make improper payments to foreign officials, the recording of those payments as legitimate "expediting fees" would constitute a failure to maintain accurate books and records. Similarly, the absence of any internal controls over the approval, documentation, and monitoring of expediting-fee payments — including the vesting of sole approval authority in Mr. Anouma without any secondary review or approval — represents a failure to maintain an adequate system of internal accounting controls.
There is, however, a critical limitation: the books-and-records and internal-controls provisions of the FCPA apply only to "issuers" — that is, companies with securities registered under Section 12 of the Exchange Act or companies required to file periodic reports under Section 15(d). As noted above, TSL is not an issuer. Its shares are not publicly traded, it has no ADRs listed on any exchange, and it is not subject to SEC reporting requirements. Accordingly, TSL's direct exposure under the books-and-records and internal-controls provisions may be limited.
Our analysis on this point is preliminary and requires further development. In particular, we will need to assess whether TSL could be deemed to have acted "in concert with" or as an "agent of" a covered issuer (for example, through its lending relationship with Meridian Atlantic Bank NA, which is itself an issuer), though we note that such theories have been invoked by the SEC only in limited circumstances.
Regardless of whether the books-and-records provisions apply directly to TSL, the poor recordkeeping practices documented above are highly relevant to the anti-bribery analysis. The absence of adequate documentation is powerful circumstantial evidence of corrupt intent, as it suggests that the payments were deliberately structured to avoid scrutiny and to conceal their ultimate purpose and recipients. In FCPA enforcement actions, the DOJ and SEC routinely cite deficient recordkeeping as evidence supporting both the substantive bribery charges and the derivative books-and-records charges, even in cases where the books-and-records charges are the primary basis for resolution.
V. RECOMMENDED NEXT STEPS
Based on the findings and analysis set forth above, C&H recommends that the Company authorize the following eight actions. These recommendations are presented in approximate order of priority, though several workstreams should proceed in parallel.
1. Complete Document Collection
The factual record developed to date is based on an incomplete set of documents. C&H has reviewed only twenty-three (23) expediting-fee invoices from a partial production of approximately 340 pages, which was received on September 2, 2022. We estimate that the total population of expediting-fee invoices generated during the relevant period (March 2018 through May 2022) is between 150 and 200 invoices. A complete document collection is essential to the integrity and credibility of the investigation.
C&H recommends that the Company direct the following document custodians and repositories to produce the following categories of documents:
• The full set of Goldenshore invoices — both commission invoices and expediting-fee invoices — for the entire term of the Agency Agreement (March 2018 to the present);
• TWA bank statements from Banque Equatoriale de Commerce SA covering all accounts for the period January 2018 through the present, including wire transfer confirmation records, debit and credit advices, and related correspondence with the bank;
• TWA petty-cash logs and cash-disbursement vouchers for all periods, including any records of cash withdrawals from operating accounts;
• TNL bank statements for all accounts and all periods, including wire transfer records and inter-company transfer documentation;
• Goldenshore corporate registry filings from the Ghana Registrar-General's Department, including the certificate of incorporation, annual returns, and any filings reflecting changes to the shareholding structure, directorship, or registered office;
• TWA and TNL operational logs, including vessel-call records, berthing assignment schedules, customs-clearance records, inspection reports, and any correspondence with port authorities or customs officials; and
• All electronic and hard-copy correspondence (including email, instant messaging, and text messages) between TWA/TNL personnel and Goldenshore representatives.
C&H will prepare and transmit a detailed document request letter to the Company, specifying custodians, date ranges, search terms, and production protocols. This letter is targeted for transmission on August 8, 2022.
2. Activate Northpoint Forensic Advisors
C&H recommends that the Company authorize the activation of Northpoint Forensic Advisors LLC ("Northpoint"), a forensic accounting and financial advisory firm located at 1700 K Street NW, Suite 600, Washington, DC 20006. Northpoint was retained by C&H at the direction of the Company upon opening this engagement; however, Northpoint has not yet been activated and remains on standby pending authorization to commence substantive work. The lead forensic accountant assigned to this matter is Sandra Bellingham, CPA, CFE, a partner at Northpoint with extensive experience in FCPA-related forensic investigations.
The proposed scope of Northpoint's engagement includes the following:
• Forensic analysis of TWA and TNL payment records, with a focus on all payments to Goldenshore and any other third-party agents, consultants, or intermediaries;
• Bank-account reconciliation for TWA and TNL operating accounts, including identification of any unexplained debits, cash withdrawals, or payments to unidentified payees;
• Cash-flow tracing to determine, to the extent possible, the ultimate disposition of funds paid to Goldenshore — specifically, whether any portion of those funds was distributed to Moussa Diallo, Captain Ibrahim Touré, or other individuals;
• Identification of any additional intermediaries, agents, or entities involved in the payment chain; and
• Preparation of a forensic accounting report suitable for use in connection with a potential voluntary self-disclosure to the DOJ and SEC.
Northpoint's estimated fee for this engagement is $175,000 to $300,000, based on a blended hourly rate of $475 per hour and an estimated 370 to 630 hours of work. These estimates are subject to revision depending on the volume and complexity of the documents produced and the need for any fieldwork in West Africa. Northpoint requires a two-week mobilization period following activation.
3. Conduct Key Witness Interviews
C&H recommends that the Company authorize the preparation and conduct of interviews with key witnesses. All interviews will be conducted by C&H attorneys, and each interviewee will receive an Upjohn warning — that is, a corporate-counsel warning explaining that C&H represents the Company (and not the individual), that the interview is being conducted at the direction of the Company, that the attorney-client privilege belongs to the Company and may be waived by the Company at its sole discretion, and that the individual is free to retain personal counsel at his or her own expense.
The following individuals have been identified as key witnesses for initial interviews:
• Cédric Anouma, Managing Director, TWA (Abidjan, Côte d'Ivoire). Mr. Anouma is the most critical witness. He approved all expediting-fee payments to Goldenshore, is the sole authorized signatory on TWA's operating accounts at Banque Equatoriale de Commerce SA, and is the individual identified in the whistleblower complaint as having directed the alleged improper payments.
• Emeka Obiora, Country Manager, TNL (Lagos, Nigeria). Mr. Obiora is a co-signatory with Mr. Anouma on certain inter-company fund transfers routed through Lagos. His knowledge of any payments directed to Nigerian port officials, or of any role played by TNL in the Goldenshore payment scheme, must be assessed.
• Yves Kouadio, Finance Manager, TWA (Abidjan, Côte d'Ivoire). Mr. Kouadio is responsible for processing invoices and payment instructions for TWA, including the Goldenshore expediting-fee invoices. He may have first-hand knowledge of the documentation (or lack thereof) supporting those invoices.
• Adama Coulibaly, Operations Coordinator, TWA (Abidjan, Côte d'Ivoire). Ms. Coulibaly coordinates vessel port calls, berthing assignments, and customs-clearance activities in Abidjan. She may have knowledge of the relationship between Goldenshore's activities and the favorable port outcomes identified in Section III.4 above.
C&H will develop an interview protocol for each witness, including a draft Upjohn warning script tailored to the Company's corporate structure and the jurisdictional considerations specific to each witness's location. We will coordinate with local counsel (see Section V.4 below) regarding any data-privacy or labor-law requirements applicable to the conduct of employee interviews in Côte d'Ivoire and Nigeria.
4. Engage Ivorian Local Counsel
The conduct of the investigation in Côte d'Ivoire will require the engagement of local counsel with expertise in data-privacy law, labor law, and anti-corruption law. C&H recommends that the Company authorize the retention of qualified Ivorian local counsel to advise on the following matters:
• Data-Privacy Compliance. The collection and cross-border transfer of documents and data from TWA's offices in Abidjan is subject to Loi n° 2013-450 relative à la protection des données à caractère personnel (the Ivorian Data Protection Law), which imposes restrictions on the processing and international transfer of personal data. Compliance with this law may require authorization from the Autorité de Régulation des Télécommunications/TIC de Côte d'Ivoire ("ARTCI") for cross-border data transfers. Failure to comply with these requirements could expose the Company to regulatory sanctions in Côte d'Ivoire and could potentially compromise the admissibility of documents in a U.S. proceeding.
• Labor-Law Considerations. The conduct of employee interviews and any subsequent disciplinary proceedings against TWA personnel must comply with the Ivorian Code du Travail (Loi n° 2015-532). Ivorian labor law imposes specific procedural requirements for disciplinary actions, including notice, hearing, and documentation obligations. In the event that the investigation reveals misconduct by Mr. Anouma or other TWA employees, any disciplinary measures must be implemented in accordance with local law to avoid wrongful-termination claims or related litigation.
• Ivorian Anti-Corruption Law. The conduct at issue may also constitute a violation of Ivorian domestic anti-corruption law, specifically Loi n° 2018-867 portant répression de la corruption et des infractions assimilées. Local counsel should advise on the Company's potential exposure under Ivorian law and on any implications of the investigation for ongoing or potential Ivorian proceedings.
C&H will coordinate the engagement of Ivorian local counsel with the Company's existing external counsel relationships. We note that the Company currently retains Papadakis & Lekkas LLP (lead: Stavros Lekkas) for Greek law matters and Okafor Bassey & Partners (lead: Ngozi Okafor, Lagos) for Nigerian law matters. Neither firm has expertise in Ivorian law, and a separate Ivorian engagement will be necessary.
5. Evaluate Goldenshore Agency Agreement
C&H recommends that the Company undertake a careful evaluation of its options with respect to the Goldenshore Agency Agreement, including suspension, amendment, or termination. The evaluation must balance several competing considerations:
• Risk of Continued Payments. Continued payment of expediting fees to Goldenshore, in light of the red flags identified herein, creates ongoing exposure under the FCPA. Each additional payment potentially constitutes an additional predicate act.
• Risk of Retaliatory Disclosure. Abrupt termination of the Agency Agreement may provoke retaliatory action by Goldenshore or by Kofi Mensah Asante — for example, disclosure of damaging information to competitors, port authorities, or regulators. The Company should assess the extent of Goldenshore's leverage and the potential consequences of termination before taking action.
• Contractual Constraints. The Agency Agreement is currently in an auto-renewed term running through February 28, 2023. Ninety (90) days' written notice is required to prevent further auto-renewal. The next notice deadline is therefore approximately November 30, 2022. Termination prior to the end of the current term may require the assertion of a breach or other basis, which must be evaluated in light of the Agency Agreement's terms and applicable Ghanaian and Ivorian law.
As an interim measure, C&H recommends that the Company immediately suspend all expediting-fee payments to Goldenshore pending the outcome of the investigation. Commission payments at the 3.5% rate may continue, subject to enhanced documentation requirements — specifically, each commission invoice should be accompanied by a detailed breakdown of the port disbursements to which the commission relates, and each payment should be reviewed and approved by Mr. Fitsakis or his designee in Piraeus prior to release. This approach balances the need to mitigate ongoing exposure against the practical necessity of maintaining port agency services during the investigation period.
6. Review Meridian Atlantic Credit Facility
The Company's $120 million revolving credit facility with Meridian Atlantic Bank NA presents a distinct and potentially significant source of risk. C&H recommends a thorough review of the Credit Agreement dated January 15, 2020, with particular attention to the following provisions:
• Section 5.18 (Anti-Corruption Representations and Covenants). This provision contains representations by TSL that it and its subsidiaries are in compliance with all applicable anti-corruption laws, including the FCPA. If the investigation confirms that improper payments were made, a breach of Section 5.18 may have occurred — or may be deemed to have been ongoing — at the time the representations were made and at the time of each subsequent borrowing request.
• Section 8.01(d) (Events of Default). This provision defines certain events of default, which may include a material breach of the representations and warranties set forth in Article V. A determination that the anti-corruption representation was inaccurate when made could trigger an Event of Default under this provision, potentially entitling Meridian Atlantic Bank NA to accelerate the outstanding indebtedness.
• Section 4.02(c) (Conditions to Each Borrowing). Each request for a borrowing under the facility constitutes a reaffirmation by TSL of the representations and warranties set forth in Article V, including the anti-corruption representation in Section 5.18. This provision means that each drawdown request made since the commencement of the alleged improper payments may have constituted a false reaffirmation.
As of June 30, 2022, $74 million was drawn on the $120 million facility. The facility matures on January 15, 2025. The potential acceleration of $74 million in outstanding borrowings, upon a determination that an Event of Default has occurred or is continuing, represents the single largest financial exposure identified in connection with this matter — exceeding by an order of magnitude the potential DOJ fines and SEC disgorgement amounts.
The relationship manager for the TSL account at Meridian Atlantic Bank NA is Gerald Fontaine, Managing Director, Shipping & Offshore Finance, located at 383 Madison Avenue, New York, NY 10179. C&H recommends that the Company carefully consider the timing and manner of any communication with Meridian Atlantic regarding this matter. Options include a proactive disclosure to the bank (which may engender goodwill and reduce the risk of acceleration), a reactive approach (responding only if and when the bank becomes aware of the issue through other channels), or a negotiated standstill or waiver arrangement. The appropriate strategy will depend in part on the outcome of the investigation and the Company's decision regarding voluntary self-disclosure to the DOJ and SEC.
7. Assess Voluntary Self-Disclosure
Once the factual record has been more fully developed through the investigative steps described above, C&H recommends that the Company carefully evaluate the costs and benefits of making a voluntary self-disclosure ("VSD") to the following enforcement authorities:
• DOJ FCPA Unit. The Criminal Division's Fraud Section maintains dedicated FCPA enforcement personnel. The DOJ's Corporate Enforcement Policy, most recently updated in January 2023, provides significant sentencing credit for companies that make voluntary self-disclosures, fully cooperate with the government's investigation, and undertake timely and appropriate remediation. Under the Policy, a company that satisfies all three criteria may receive a presumption of declination — that is, the DOJ may decline to prosecute the matter altogether. Even where a declination is not warranted, a qualifying VSD can result in a reduction of up to 50% below the low end of the applicable U.S. Sentencing Guidelines fine range.
• SEC Division of Enforcement. The SEC's Division of Enforcement separately investigates and brings civil enforcement actions for FCPA violations. The SEC has its own cooperation program, under which self-reporting, cooperation, and remediation are credited in determining the appropriate resolution.
The VSD analysis is particularly salient in this matter because the SEC whistleblower tip (TCR No. 2022-WB-08341) remains pending. While the SEC has not yet opened a formal investigation — and no for