A telecommunications company has agreed to pay more than $1 billion in penalties as part of a deferred prosecution agreement to resolve charges that it violated the Foreign Corrupt Practices Act by making and improperly recording tens of millions of dollars in improper payments around the world. The company also agreed to retain an independent compliance monitor for three years and to continue to cooperate with the Department of Justice’s investigations and prosecutions, including of individuals.
For more information about the FCPA and ensuring your company is in compliance, please contact export attorney Kristine Pirnia.
A DOJ press release states that beginning in 2000 and continuing until 2016 the company engaged in a scheme to pay bribes, falsify books and records, and fail to implement reasonable internal accounting controls. The company used third-party agents and consultants to make bribe payments to government officials in China, Vietnam, Indonesia, Kuwait, and Djibouti and/or to manage off-the-books slush funds to obtain business. The agents were often engaged through sham contracts and paid pursuant to false invoices, and the payments to them were improperly accounted for in the company’s books and records.
The total penalty amount, which includes a criminal penalty of more than $520 million and an approximately $540 million payment to the Securities and Exchange Commission, reflects a 15 percent reduction off the bottom of the applicable U.S. Sentencing Guidelines fine range. The company received partial credit for its cooperation with the DOJ investigation, which included conducting a thorough internal investigation, making regular factual presentations, voluntarily making foreign-based employees available for interviews in the U.S., producing extensive documentation, and disclosing some conduct of which the DOJ was previously unaware. However, the company did not receive full credit for cooperation and remediation because it did not disclose allegations of corruption with respect to two relevant matters, produced certain materials in an untimely manner, and did not fully remediate, including by failing to take adequate disciplinary measures with respect to certain employees.