Selected FCPA enforcement actions
- Details
- Category: FCPA - The Foreign Corrupt Practices Act of the US
the U.S. Securities and Exchange Commission (accounting provisions)
1. AGA Medical Corporation (2008)
Demonstrating how easy it is to commit a violation of the Foreign Corrupt Practices Act (FCPA), this case involves an alleged agreement by a high-ranking officer and some employees of Minnesota company AGA Medical to make payments to doctors in China for their choice of AGA Medical products over those of competitors. One may ask whether payments would have been appropriate even if the payments had been purely commercial, but in this case the doctors were employees of a government-owned hospitals, making the doctors "foreign officials" under the FCPA. Allegations also included payments to the Chinese national Intellectual Property Office to approve AGA Medical's patents. The Department of Justice summary includes the following note:
In recognition of AGA’s voluntary disclosure and thorough review of the improper payments, its cooperation with the Department’s investigation, the company’s implementation of enhanced compliance policies and procedures, and the company’s engagement of an independent corporate monitor, the Department has agreed to defer prosecution of AGA for three years. If AGA abides by the terms of the agreement, the Department will dismiss the criminal information when the term of the agreement ends.
2. Hewlett-Packard (2014)
In the case of Hewlett Packard, the bribes were more straightforward in character, although indirect in routing. The company paid a $600,000 bribe to a Polish government official in exchange for choosing the company's products, used a series of shell corporations to pay $2 million to a Russian official for business with the federal prosecutor's office, and gave inflated commissions to an agent in Mexico with close ties to officials in the government petroleum company, some of which commissions made their way to those officials. These would seem not to have been errors in determining who is a government official and who is not. Moreover, in this case, the books and records of the company did not adequately disclose the payments, and so there were violations in the jurisdiction of the Securities and Exchange Commission as well as the Justice Department. Total penalties, including fines, interest, administrative penalties, and "disgorgement" of profits, came to more than $108 million. http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370541453075#.U4vptvldXmc