Archive

December 17, 2014

New York-based cosmetics giant Avon Products Inc.and its wholly owned subsidiary Avon Products (China) Co. Ltd. pleaded guilty to violating the Foreign Corrupt Practices Act (FCPA) by making and concealing illicit payments to Chinese government officials to secure business there. The company agreed to pay more than $135M in criminal and regulatory penalties to resolve the charges. According to the government, from at least 2004 through 2008, Avon and Avon China conspired to falsify Avon’s books and records by falsely describing the nature and purpose of certain Avon China transactions. Specifically, the companies sought to disguise more than $8 million worth of gifts, travel, meals and entertainment that Avon China executives gave to Chinese officials. The Avon entities will pay $68M in criminal penalties and another $67M in related FCPA matter it settled with the SEC. Whistleblower Insider

December 17, 2014

Former CEO Benito Chinea and former managing director Joseph De Meneses of a US broker-dealer which established a group called Global Markets Group pleaded guilty to violating the Foreign Corrupt Practices Act (FPCA) and the Travel Act by bribing senior official in Venezuela’s state economic development bank in return for trading business that generated more than $60M. Chinea and De Meneses also agreed to pay $3.6M and $2.7M, respectively. DOJ

December 10, 2014

Dallas Airmotive Inc., a provider of aircraft engine maintenance, repair and overhaul services, admitted to violating the Foreign Corrupt Practices Act (FCPA) and agreed to pay a $14M criminal penalty to resolve charges it bribed Latin American government officials in order to secure lucrative government contracts there. According to Dallas Airmotive’s admissions, between 2008 and 2012, the company bribed officials of the Brazilian Air Force, the Peruvian Air Force, the Office of the Governor of the Brazilian State of Roraima, and the Office of the Governor of the San Juan Province in Argentina. DOJ

December 4, 2014

Asem Elgawhary, former Principal Vice President of Bechtel Corporation and General Manager of the Power Generation Engineering and Services Company (PGESCo), pleaded guilty in connection with a $5.2M kickback scheme intended to manipulate the competitive bidding process for state-run power contracts in Egypt. In his plea agreement, Elgawhary admitted that, from 1996 to 2011, he was assigned by Bechtel to be the general manager at PGESCo, a joint venture between Bechtel and Egypt’s state-owned and state-controlled electricity company (EEHC) and that he accepted a total of $5.2M from three power companies, which they paid to secure a competitive and unfair advantage in the bidding process. DOJ

November 3, 2014

California-based medical diagnostics and life sciences manufacturing company Bio-Rad Laboratories Inc. agreed to pay $55M million to settle allegations it violated the Foreign Corrupt Practices Act (FCPA) by falsifying its books and records and failing to implement adequate internal controls in connection with sales it made in Russia and for making illegal bribes in connection with sales it made in Russia, Thailand and Vietnam. The company will pay $14.35M to the DOJ and $40.7M to the SEC.Whistleblower Insider

September 11, 2014

Hewlett-Packard subsidiary Hewlett-Packard Russia pleaded guilty to felony violations of the Foreign Corrupt Practices Act (FCPA) for bribing Russian government officials to secure a large technology contract with the Office of the Prosecutor General of the Russian Federation. According to the plea agreement, HP Russia executives created a multimillion dollar secret slush fund, at least part of which was used to bribe Russian government officials who awarded the company a contract valued at more than 35 million euros. HP Russia will pay a $58.8 million fine. DOJ

September 9, 2014

Don Langford, former chief credit officer and senior vice president of Nebraska-based TierOne Bank, pleaded guilty for his role in a scheme to defraud TierOne’s shareholders and regulators. Specifically, Langford conspired with others to hide losses at the bank by cooking the bank’s books and reporting falsified information to stakeholders, regulators, external auditors, and the investing public. The bank even made an unsuccessful attempt to get taxpayer TARP funds in November 2008. TierOne filed for bankruptcy shortly after the Office of Thrift Supervision shut the bank down in June 2010. DOJ

August 29, 2014

Former CEO of ArthroCare Corporation Michael Baker and former ArthroCare CFO Michael Gluk were sentenced to serve 20 years and 10 years in prison, respectively, for their leading roles in a $750 million securities fraud scheme. On June 2, 2014, they were convicted by a jury of wire fraud, securities fraud, and conspiracy to commit wire and securities fraud in connection with their scheme to artificially inflate the share price of ArthroCare stock through sham transactions. DOJ

August 25, 2014

Former Hanover Corporation CFO Robert Haley and former Hanover salesman Daryl Bornstein were sentenced to serve 60 months and 70 months in prison, respectively, and ordered to pay $14.5 million in restitution for their roles in an $18 million Ponzi scheme. Hanover’s former CEO was previously sentenced to 14 years in prison and ordered to pay $14.7 million in restitution in this case. DOJ

August 21, 2014

Bank of America agreed to pay $16.65 billion to resolve federal and state mortgage fraud claims against the bank and its former and current subsidiaries, including Countrywide Financial Corporation andMerrill Lynch. It is the largest civil settlement with a single entity in American history. And it includes a $5 billion penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), the largest FIRREA penalty ever. As part of the settlement, BofA acknowledged misrepresenting the quality of billions of dollars worth of risky mortgage loans. Whistleblower Insider