Top Menu

In Connection With 2019 Ericsson Enforcement Action, DOJ Criminally Charges Former Ericsson Employee

Bereket

As highlighted in this prior post, in late 2019 Swedish telecom company Ericsson (a company with American Depositary Shares traded in the U.S.) resolved a $1.06 billion net FCPA enforcement action concerning conduct in Djibouti, China, Vietnam, Kuwait, Indonesia, and Saudi Arabia.

Regarding Djibouti, the enforcement action alleged that Ericsson (through certain subsidiaries and agents) provided approximately $2,100,000 in bribe payments to, and for the benefit of, foreign officials in Djibouti, including a high-ranking government official in the executive branch of the Djibouti government who had influence over decisions made by a state-owned telecommunications company and the CEO of the state-owned telecom company, in order to secure an improper advantage in order to obtain and retain business with the Telecom Company and to win a contract valued at approximately €20,300,000 with the Telecom Company.”

In connection with this prong of the Ericsson enforcement action, the DOJ announced yesterday that Afework “Affe” Bereket (pictured – a dual citizen of Ethiopia and Sweden) was criminally charged with one count of conspiracy to violate the FCPA’s anti-bribery provisions and one count of conspiracy to commit money laundering “for his alleged role in a scheme to pay approximately $2.1 million in bribes to high-level government officials in the Republic of Djibouti and conspiring to launder funds to promote the scheme.”

Continue Reading

Disconnected – The Many FCPA Enforcement Actions Against Telecom Companies

Telecomscandal

Not all industry sectors have the same Foreign Corrupt Practices Act risk.

At its most basic level, FCPA risk is a function of real company employees or agents having real points of contact with real alleged “foreign officials” in the global marketplace. The more regulated a foreign marketplace is, the more points of contact there are likely to be.

In many countries, the telecom sector is heavily regulated and thus not surprisingly many FCPA enforcement actions have occurred in this sector.

As highlighted below, since 2010 there have been eleven FCPA enforcement actions against telecom companies resulting in approximately $3.1 billion in settlements. Seven of these enforcement actions were against non-U.S. telecom companies and four of these enforcement actions are in the Top Ten of FCPA settlements.

Continue Reading

Swedish Company Bribes Foreign Officials, U.S. Collects $1.06 Billion In Record-Setting FCPA Enforcement Action

ericsson

Late last Friday, the DOJ and SEC announced (here and here) a record-setting Foreign Corrupt Practices Act action Swedish telecom company Ericsson (a company with American Depositary Shares traded in the U.S.). The $1.06 billion settlement amount is the largest net FCPA settlement amount in history surpassing the $850 million FCPA enforcement action against Russian telecom company MTS in March 2019 (see here).

The enforcement action concerned conduct in Djibouti, China, Vietnam, Kuwait, Indonesia, and Saudi Arabia.

Continue Reading

Next Up – MTS Resolves $850 Million FCPA Enforcement Action

mts

First it was Netherlands-based VimpelCom which resolved a net $398 million FCPA enforcement action in February 2016 for bribing an alleged Uzbekistan telecom official (see here and here for prior posts).

Then it was Sweden-based Telia which resolved a net $483 million FCPA enforcement action in September 2017 based on the same alleged core conduct. (see here and here for prior posts).

Recently, the SEC and DOJ announced (see here and here) that Russia-based Mobile TeleSystems PJSC (MTS) agreed to resolve an $850 million DOJ/SEC FCPA enforcement action based on the same alleged core conduct. This is the largest settlement amount in an FCPA enforcement action in history. (See here for a list of the top ten corporate enforcement actions).

Continue Reading

Polycom Resolves A $36.6 Million Enforcement Action – SEC Believes That The FCPA Is A Strict Liability Statute And Just What Viable Criminal Charges Did The DOJ Decline?

shrug

Earlier this week, Polycom (up until 2016 an issuer which was then acquired by a private equity firm and is now a wholly-owned subsidiary of Plantronics) resolved a $36.6 million Foreign Corrupt Practices Act enforcement action ($16.3 million pursuant to an SEC administrative order and $20.3 million pursuant to a so-called DOJ declination with disgorgement letter).

The conduct at issue concerned a Chinese subsidiary which created “a separate, parallel sales management system outside of Polycom’s company-approved systems, which was orchestrated by Polycom’s Vice President of China” and whose employees used “non-Polycom e-mail addresses when discussing deals with Polycom’s distributor.” According to the SEC, “Polycom personnel outside China were unaware of the existence of this parallel system.”

Yet, in another example of the SEC believing that the FCPA is a strict liability statute, the SEC found that Polycom violated the FCPA’s books and records and internal controls provisions. Moreover, without highlighting any additional substantive information the DOJ “declined prosecution … despite the bribery committed by employees of the Company’s subsidiaries in China, and these subsidiaries’ knowing and willful causing of false books and records at Polycom.” However, based on the information in the public domain (that is the SEC’s order) it remains an open question just what viable criminal charges the DOJ actually declined.

Continue Reading

Powered by WordPress. Designed by WooThemes