We have now seen our second Foreign Corrupt Practices Act settlement involving vendor payments over the past three weeks as Johnson Controls settled its SEC investigation for $14 million and Analogic previously agreed to pay nearly $15 million to the SEC and DOJ.
Johnson Controls released a press release today concerning the settlement of its FCPA investigation. According to media reports, the company’s Chinese subsidiary used “sham” vendors to pay $4.9 million to employees of government-owned shipyards in China over the course of six years. The Justice Department declined to bring criminal charges under its new FCPA Pilot Program to reward cooperation in FCPA investigations.
A few weeks ago, medical device manufacturer Analogic settled a civil action with the SEC and a criminal action with the DOJ for nearly $15 million. The DOJ investigation concluded with a non-prosecution agreement and a $3.4 million fine. The SEC charged the company with failing to keep accurate books and records as well as the failure to maintain adequate internal accounting controls. The SEC settlement took into account the company’s self-reporting, cooperation with the investigation and acts to remedy the problem.
The investigation centered upon sham transactions with distributors to funnel millions to third parties. The subsidiary would issue inflated invoices to distributors and send the overpayment to third parties identified by the distributors. The SEC press release identified at least 260 suspicious payments totaling nearly $20 million.
To speak to one of our SEC whistleblower attorneys about reporting a violation of the FCPA, please call 1-800-590-4116.