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Technology Company to Pay $108 Million for Bribing Foreign Officials

Friday, April 11, 2014
Sandler, Travis & Rosenberg Trade Report

The Department of Justice and the Securities and Exchange Commission announced April 9 more than $108 million in penalties against a California technology company and some of its subsidiaries for bribery of government officials in Russia, Poland and Mexico. The DOJ said the subsidiaries “created a slush fund for bribe payments, set up an intricate web of shell companies and bank accounts to launder money, employed two sets of books to track bribe recipients, and used anonymous email accounts and prepaid mobile telephones to arrange covert meetings to hand over bags of cash.”

According to a DOJ press release, one subsidiary has agreed to plead guilty to felony violations of the Foreign Corrupt Practices Act and admit its role in bribing Russian government officials to secure a technology contract worth more than $100 million. The DOJ is also entering into a deferred prosecution agreement with the company’s subsidiary in Poland and a non-prosecution agreement with a subsidiary in Mexico relating to the use of gifts, cash bribes and inflated commissions to secure contracts with Poland’s national police agency and Mexico’s state-owned petroleum company, respectively. The total amount of bribery payments made in all three countries exceeded $3.5 million.

In total, the three entities will pay $76.8 million in criminal penalties and forfeiture. In a related settlement with the SEC, the parent company will pay an additional $31.5 million in disgorgement and prejudgment interest. The DOJ suggests that the penalty could have been more severe, noting that the parent company cooperated extensively with the investigation, including conducting a robust internal investigation, voluntarily making U.S. and foreign employees available for interviews, and collecting, analyzing and organizing voluminous evidence. The company has also undertaken extensive anti-corruption remedial efforts, including taking appropriate disciplinary action against culpable employees and enhancing its internal accounting, reporting and compliance functions.

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