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Senator Robert Menendez and Spouse Charged with Bribery, Fraud, and Extortion

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Spokespersons for the Southern District of New York and the Federal Bureau of Investigations (FBI) have announced multiple corruption-related charges against Senator Robert Menendez (Menendez), his spouse Nadine Menendez (Nadine), and three others. The unsealed indictment alleged that Menendez offered accomplices his political influence over several years in exchange for various types of payment in valuable items.

“The alleged conduct in this conspiracy damages the public’s faith in our system of government and brings undue scorn to the honest and dedicated public servants who carry out their duties on a daily basis,” commented James Smith, New York Field Office Assistant Director in Charge for the FBI.  “To those inclined to use the status of their public office for personal benefit, or those willing to provide bribes in an attempt to gain influence from a public official, the FBI will ensure that you face the consequences in the criminal justice system for your underhanded dealings.”

Influence Peddling and Conspiracy to Commit Bribery

According to the indictment, Robert and Nadine Menendez accepted bribes worth hundreds of thousands of dollars from three New Jersey businessmen connected with Nadine:

  • Wael Hana – A longtime friend of Nadine’s, Hana lived in New Jersey and was originally from Egypt. He remained closely connected with Egyptian officials.
  • Fred Daibes – A business associate of Hana’s, real estate developer Daibes was also one of Menendez’s longstanding donors.
  • Jose Uribe – Another of Hana’s associates, Uribe did business in the New Jersey trucking and insurance sectors.

Between 2018 and 2022, Menendez allegedly agreed to take multiple actions in response to the bribes offered. The indictment alleges acts including:

  • Seeking to benefit Hana and the Egyptian government – In 2018, Nadine and Hana allegedly helped Menendez secretly pass sensitive information to an Egyptian official on people serving at the US Embassy in Cairo. The indictment also says he promised or claimed to use his leadership position at the Senate Foreign Relations Committee (SFRC) multiple times to approve billions worth of weapons sales to Egypt between 2018 and 2022. In 2019, Menendez also allegedly tried to pressure a US Department of Agriculture (USDA) official not to oppose a monopoly Egypt had granted to a company operated and financed by Hana and Daibes. The indictment says that Nadine received funds from the company that same year to cover her mortgage.
  • Trying to interfere with two criminal cases connected to Uribe and Daibes – In exchange for a luxury car worth more than $60,000, Menendez allegedly attempted to interfere with criminal cases the Navy Judge Advocate General’s Corps (NJAG) was pursuing against two of Uribe’s business connections, one involving insurance fraud. Both cases were resolved in the defendants’ favor in 2019. 
  • Recommending a US Attorney candidate to the President – In 2018, the United States Attorney’s Office (USAO) sought to prosecute Daibes for fraudulently obtaining loans from a bank he had founded. In exchange for gifts of gold, cash, and furniture, Menendez allegedly sought to interfere with the case, including by recommending a New Jersey US Attorney candidate to the President that he believed he could influence in the case.

When the FBI executed a search warrant on the Menendez home in 2022, they found wads of cash worth more than $480,000, some of which were stuffed into jackets bearing Menendez’s name. They also found a luxury car, furniture, and gold bars.

Menendez pled not guilty during the September 27 hearing.

Key Takeaways

To curb the use of customer accounts for corruption, firms may choose to take a closer look at their politically exposed person (PEP) definitions and screening processes. While global definitions of PEPs vary, the Financial Action Task Force (FATF) definition is a reliable starting point. 

Yet the risks PEPs face involve networks of relationships, not just individual activity. Therefore, a holistic approach to screening and monitoring PEPs involves not just looking at individuals but at their complex networks. When evaluating accountholders, firms should also consider relatives and close associates (RCAs) in their definition of PEP. 

A politician like Menendez might be the most obvious candidate for PEP status. But relationships with friends, business partners – or, in some cases, business entities – are what make PEPs so vulnerable. They can be exploited and involved in corruption (wittingly or not.) Firms should analyze these relational networks within their organization’s risk appetite and policies.

The Cost of Ineffective PEP Categorization

Listen to our expert panel discuss strategies for enhancing PEP screening and ongoing monitoring.

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Originally published 28 September 2023, updated 28 September 2023

Disclaimer: This is for general information only. The information presented does not constitute legal advice. ComplyAdvantage accepts no responsibility for any information contained herein and disclaims and excludes any liability in respect of the contents or for action taken based on this information.

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