The Department of Justice reports that a European global technology company has agreed to pay more than $315 million to resolve an investigation into violations of the Foreign Corrupt Practices Act.
The company was charged with bribing a high-ranking official at a South African state-owned company to corruptly obtain confidential information and win lucrative contracts. As part of this scheme the company conducted sham negotiations to obtain contracts at inflated prices that it had prearranged with the official, all on the condition that the company employ a particular subcontractor associated with that official. The company also falsely recorded payments to its subcontractors as legitimate business expenses when, in fact, a portion of the payments were intended as bribes for the official.
The DOJ states that the criminal penalty reflects a 25 percent discount off the mid-point between the middle and high ends of the otherwise applicable U.S. Sentencing Guidelines fine range. The DOJ has agreed to credit up to half of the penalty against amounts the company pays to authorities in South Africa in related proceedings, along with other credits for amounts the company pays to resolve investigations conducted by the Securities and Exchange Commission (which reached an agreement under which the company will pay a $75 million civil penalty) and authorities in Switzerland and Germany.
According to an agency press release, the DOJ entered into a three-year deferred prosecution agreement with the company based on a number of factors. Aggravating factors included the nature and seriousness of the misconduct and the company’s decade-old criminal history, which includes two prior criminal resolutions for FCPA violations in 2004 and 2010. Mitigating factors included the company’s extensive remediation (e.g., carrying out a root-cause analysis of the misconduct and making significant investments in compliance personnel, compliance testing, and monitoring) and its commitment to further enhance its compliance program and internal controls (e.g., enhanced reporting provisions that require the company to meet with the DOJ at least quarterly and to submit yearly reports regarding the status of its remediation efforts, the results of its compliance program testing, and its proposals to ensure that its compliance program is reasonably designed, implemented, and enforced).
For more information on the FCPA and how to ensure your company’s compliance, please contact attorney Kristine Pirnia at (202) 730-4964 or via email.
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