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$22 Million to Settle Criminal and Civil Bribery Charges

Tuesday, July 26, 2016
Sandler, Travis & Rosenberg Trade Report

The Securities and Exchange Commission announced July 25 that a South America-based airline has agreed to pay more than $22 million to settle parallel civil and criminal cases related to improper payments it authorized during a dispute with union employees. To settle the SEC’s charges that it failed to keep accurate books and records and maintain adequate internal accounting controls, the airline agreed to pay $9.4 million in disgorgement and prejudgment interest. In a non-prosecution agreement with the Department of Justice, the airline agreed to pay a $12.75 million penalty. The airline must also retain an independent compliance monitor for at least 27 months.

According to an SEC press release, the airline’s CEO approved $1.15 million in payments to a consultant through a sham contract for a purported study of existing air routes. The CEO knew that no actual study would be performed, the press release states, and that it was possible the consultant would pass some portion of the money to union officials in Argentina to settle the wage dispute. The CEO settled associated SEC charges against him earlier this year.

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