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$25 Million Penalty but No Criminal Prosecution in Bribery Case

Tuesday, February 19, 2019
Sandler, Travis & Rosenberg Trade Report

A U.S. technology company has agreed to pay $25 million to settle charges that it violated the Foreign Corrupt Practices Act in connection with the bribery of an Indian government official. However, the Department of Justice has declined criminal prosecution in this case.

According to information from the DOJ and SEC, the company was charged with authorizing a third-party contractor to pay a $2 million bribe to a senior Indian government official in exchange for securing and obtaining a statutorily required planning permit in connection with the development of an office park in India. To conceal its involvement in this bribe the company allegedly reimbursed the contractor through construction invoices or change orders at the end of the development of the project. The SEC alleges that the company also authorized the contractor to make two more bribes totaling more than $1.6 million and used the same methods to conceal its reimbursement payments.

The company has agreed to pay a $6 million penalty and $19 million in disgorgement and prejudgment interest to the SEC to settle its charges. The DOJ has declined to criminally prosecute the company in light of this penalty and a number of other factors, including the company’s voluntary self-disclosure of the violations, thorough and comprehensive investigation, and full and proactive cooperation with the investigation. The DOJ also considered the company’s lack of prior criminal history, the existence and effectiveness of the company’s pre-existing compliance program and subsequent steps to enhance it, and the company’s full remediation, including terminating the employees and contractors involved.

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