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$48 Million in Penalties for Bribery of Foreign Officials

Thursday, October 24, 2013
Sandler, Travis & Rosenberg Trade Report

The Department of Justice announced Oct. 22 that an Ohio company has agreed to pay a $25.2 million criminal penalty to resolve allegations that it bribed government officials in China and Indonesia and falsified records in Russia to obtain and retain contracts to provide ATMs to state-owned and private banks in those countries. The company has also agreed to pay about $23 million in disgorgement and prejudgment interest to the Securities and Exchange Commission concerning the same charges.

The criminal fine is part of a three-year deferred prosecution agreement under which the company will also implement rigorous internal controls, cooperate fully with the DOJ and retain a compliance monitor for at least 18 months. The department states that this agreement acknowledges the company’s voluntary disclosure of the Foreign Corrupt Practices Act violations as well as its extensive internal investigation and cooperation.

According to the SEC, the company’s subsidiaries in China and Indonesia allegedly spent approximately $1.8 million on travel, entertainment, cash and other improper gifts for senior officials of state-owned and –controlled banks with the ability to influence the banks’ purchasing decisions. These expenditures were falsely recorded in the company’s books and records as legitimate training expenses. The SEC further alleges that the company falsified books and records to hide approximately $1.2 million in bribes paid to employees at privately owned banks in Russia.

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