Articles Posted in Foreign bribes

 

Ericsson, the Swedish multinational networking and telecommunications company has reserved $1.23 billion to cover fines associated with foreign bribes made by the company in China, Djibouti, Indonesia, Kuwait, Saudi Arabia and Vietnam, based on an investigation. Ericson has a 35% share in the 2-5G mobile market network and is the major competitor to Huaweri, the Chinese telecom company. The $1.23 billion reserve provision covers $1 billion in estimated combined penalties from forthcoming settlements with the Justice Department and SEC. The remainder accounts for costs related to other investigation. Ericsson Chief Legal Officer Xavier Dedullen said the company had so far disciplined 65 employees in relation to the FCPA violations, 49 of whom were no longer with the company.  Ericsson’s settlements could include the imposition of an independent monitor to oversee the company’s compliance reforms.

If you are aware of any foreign bribes by companies traded on the US stock exchanges, you may be able to become a whistleblower under the False Claims Act (FCA) and recover up to 30% of what the Government recovers in any investigation of such bribes. US laws prevent making bribes to foreign officials or their families in order to get business in other countries. Jeffrey Newman represents whistleblowers. His email is  Jeffrey.Newman1@gmail.com

 

 

 

 

 

 

 

 

Microsoft’s subsidiary inHungary,  has agreed to pay a criminal penalty of more than $8.7 million to resolve the government’s investigation into violations of the Foreign Corrupt Practices Act (FCPA) arising out of a bid rigging and bribery scheme in connection with the sale of Microsoft software licenses to Hungarian government agencies.

According to Microsoft Hungary’s admissions, beginning by at least 2013 and continuing until at least 2015, a senior executive and other employees of Microsoft Hungary participated in a scheme to inflate margins in the Microsoft sales channel in connection with the sale of Microsoft software licenses to Hungarian government agencies.  In furtherance of that scheme, Microsoft Hungary executives and employees falsely represented to Microsoft that steep discounts were necessary to conclude deals with resellers who bid for the opportunity to sell Microsoft licenses to government customers.  In actuality, the savings were not passed on to the government customers, but instead were used for corrupt purposes and were falsely recorded as “discounts” and stored in various tools and databases on Microsoft servers in the United States in violation of the Foreign Corrupt Practices Act. Microsoft Hungary entered into a nonprosecution agreement and agreed to pay a criminal penalty of $8,751,795 to resolve the matter.  The Department reached this resolution based on several factors.  Although Microsoft Hungary did not voluntarily self-disclose the misconduct, Microsoft Hungary received credit for its and Microsoft Corporation’s substantial cooperation with the Department’s investigation and for taking extensive remedial measures.  For example, Microsoft Hungary terminated four licensing partners and Microsoft Corporation has implemented an enhanced system of compliance and internal controls, company-wide, to address and mitigate corruption risks.  Accordingly, the criminal penalty reflects a 25 percent reduction off the bottom of the applicable U.S. Sentencing Guidelines fine range for the company’s full cooperation and remediation.

In a related matter with the Securities and Exchange Commission (SEC), Microsoft Corporation agreed to pay to the SEC disgorgement and prejudgment interest totaling approximately $16,565,151 for conduct in Hungary.

Walmart Inc. (Walmart), a U.S.-based multinational retailer and its wholly owned Brazilian subsidiary, WMT Brasilia S.a.r.l. (WMT Brasilia), will pau pay a criminal penalty of $137 million to resolve the government’s investigation into violations of the Foreign Corrupt Practices Act (FCPA).  WMT Brasilia pleaded guilty today in connection with the resolution.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney G. Zachary Terwilliger of the Eastern District of Virginia, Assistant Director Robert Johnson of the FBI’s Criminal Investigative Division and Special Agent in Charge Kelly Jackson of IRS Criminal Investigation’s (IRS-CI) Washington, D.C. office made the announcement.

“Walmart violated the Foreign Corrupt Practices Act because it failed to implement the internal controls necessary to ferret out corrupt conduct,” said U.S. Attorney Terwilliger.  “For more than a decade, Walmart experienced exponential international growth but failed to create safeguards to protect against corruption risks in various countries.  This resolution is the result of several years of steadfast work by the prosecutors and our law enforcement partners at the FBI and IRS-CI.”

Foreign-bribes-venezuela-300x194The president of a company based in Miami, as well as one of its former sales representatives, hoped to gain access to more work and receive payment of past due invoices by bribing officials at Venezuela’s state energy company.

The two men involved are Rafael Enrique Pinto Franceschi, referred to as Pinto, and Franz Herman Muller Huber, referred to as Muller. Pinto lives in Miami and is the president of the company in question at the age of 40, while Muller was a former sales representative for that company and is currently living in Weston, Florida at the age of 68.

Pinto and Muller were charged with two counts of wire fraud, one count of conspiracy to commit wire fraud, one count of conspiracy to launder money, and one count of conspiracy to violate the Foreign Corrupt Act. Altogether these two were charged in a five-count indictment in the Southern District of Texas on February 21, 2019.

oil-company-bribes-300x200In a U.S. Securities and Exchange Commission filing, the company, TechnipFMC plc, stated that they have set aside $280 million in possible settlement funds involving bribery-related offenses. The payment would be delivered to authorities in the United States as well as Brazil and France.

TechnipFMC plc is a company based in London that is often found engaging in projects involving oil and gas. They were formed through a merger in 2017, including the UK-based FMC Technologies Inc. and French oil-services giant Technip SA. In 2010, Technip SA paid $338 million to resolve its own issue involving FCPA offenses in Nigeria that involved using massive bribes to win contracts worth $6 billion. They then used these bribery-won contracts to build massive liquefied natural gas (LNG) facilities on Bonny Island in Nigeria.

Moving back to the present, this current reserve of settlement funds is related to an investigation involving a number of factors. TechnipFMC states in a summary of their financial statement for the fourth quarter in 2018 that, “We are cooperating with the U.S., Brazilian, and French authorities in their investigations of potential violations of anti-corruption laws relating to historical projects in Brazil, Equatorial Guinea, and Ghana, and Unaoil contracts. We have been informed that these authorities have been coordinating their investigations, which could result in a global resolution.”.

foreign bribesHempel A/S, a coating supplier based in Denmark, has decided to settle allegations of bribery with a payment of $33.4 million to enforcement agencies in Denmark and Germany.

In April of 2017, Hempel A/S self-reported a number of illegal sales practices that were discovered in Germany, as well as other countries in Europe and parts of Asia. A statement involving this situation with Hempel A/S has stated for the record, “The unlawful practices were stopped immediately and the people responsible were replaced. Hempel has completed internal remediation, invested heavily, and established a robust compliance framework.”

Bribery, when it comes to the law, is the act of giving or receiving something of value in exchange of influence that one would not normally have influence over. While in some rare legal situations this may be a possibly acceptable action to take, in most cases bribery is a highly punishable offense in the corporate world. That being said, according to the International Monetary Fund, an estimated $1.5 to $2 trillion changes hands every year when it comes to bribes.

Australia whistleblower lawsThose looking to report corruption, fraud, tax evasion, and other forms of misconduct in the corporate world can finally get the protection they deserve as new whistleblower laws in Australia clear federal parliament.

Corporate whistleblower laws introduced in late 2017 have managed to pass the lower house in early 2019. These laws put into place offer greater protection for anyone wishing to voice concerns about fraudulent activities within a division of the corporate world.

Corporate crime is an illegal act that is committed by a company or business with the goal of giving the company a boost or advantage they normally would be unable to receive. Examples of this are all over the world and are committed by even some of the best-known brands. Many in the U.S. may even recall back in 2014 when Rite Aid, one of the largest drug stores, was required to pay almost 3 billion for violating the False Claims Act by allegedly using gift cards to sway those on Medicare and Medicaid to switch their prescriptions to their pharmacies. This would be considered an act of bribery, and one of the many types of corporate crime. Corporate crime has cost many countries a considerable amount, and so whistleblowers, those who have set out to inform others about illicit activity, are one of the best defenses we have to fight against this type of crime.

United Technologies Corporation of Connecticut will pay the Securities and Exchange Commission $13.9 million to end charges that it violated federal law by bribing Azerbaijani officials to get public housing elevator businesses in Baku. The company also bribed a Chinese sales agent in an attempt to obtain confidential information from a Chinese official to help win engine sales to state-owned Air China, through a joint venture. The SEC also said that United Technologies improperly provided trips and gifts to various foreign officials in China, Kuwait, South Korea, Pakistan, Thailand, and Indonesia through its Pratt & Whitney division and Otis subsidiary. Azerbaijan is located just north of Iran on the Caspian Sea.

In Azerbaijan, the Otis Elevator unit hired agents from Russia without doing any due diligence.”None of [the agents] had local experience in Azerbaijan or reliable experience in either import/export or the elevator industry,” the SEC order said.

In China, an agent for a joint venture that included Pratt & Whitney asked for and received “a commission advance of $2 million purportedly for an office expansion,” the SEC said. The agent didn’t provide any documentation to support its need for the advance. The joint venture paid the China agent $55 million in commissions from 2009 to 2013.

Legg Mason a publicly traded American investment management firm will pay $34.5 million to settle charges that its Permal Group hedge fund business bribed Libyan officials to win investment contracts, the Securities and Exchange Commission announced Monday.

The settlement is like one announced June 4 by the U.S. Justice Department, with Legg Mason agreeing to pay $64 million including a $32.6 million penalty and $31.6 million disgorgement. The SEC order said that because of that criminal penalty, it was not imposing a civil fine.

The money manager holding company admitted that from 2004 to 2010, Permal was a partner with Societe Generale in seeking business from Libyan state-owned companies and paying bribes through a Libyan broker in connection with 14 investments. In the non-prosecutorial agreement, the Justice Department said Legg Mason cooperated in the federal investigation, and that its misconduct “involved only mid-to-lower-level employees” of Permal. Societe Generale pleaded guilty in U.S. District Court in New York to bribery charges earlier this year and agreed to pay $292.5 million each to the U.S. and French governments.

Suisse-bribe-allegations-300x200An investigation under the Foreign Corrupt Practices Act (FCPA) leads Credit Suisse, a business based in Zurich which offers financial services and counsel, to pay $47 million to the Department of Justice (DOJ). The Swiss financial giant was being investigated due to the employment methods of their Hong Kong unit, Credit Suisse Hong Kong Ltd., and paid the $47 million as a penalty to end the FCPA investigation by the DOJ and the SEC.

First disclosed by Credit Suisse in February of 2018, the reason for the investigation was their recruitment practices in Asia between the years of 2007 to 2013. The Securities and Exchange Commission (SEC) along with the DOJ was also involved in this investigation. Credit Suisse stated that the focus was on whether those hired were referred by government agencies or state-owned entities for investment approval. The latter would go against the FCPA which strictly prohibits business assistance as a bribe to foreign officials.

Credit Suisse and the DOJ have now reached a non-prosecution agreement in regards to this investigation with no criminal charges according to a statement from Credit Suisse’s Hong Kong unit posted on the company’s website.