Ericsson Agrees To Pay More Than $1 Billion To Resolve Foreign Corrupt Practices Act Case

[TexasTowelie]

Geoffrey S. Berman, the United States Attorney for the Southern District of New York (“SDNY”), Brian A. Benczkowski, the Assistant Attorney General for the Criminal Division of the Department of Justice (“DOJ”), and Don Fort, Chief of the Criminal Investigation Division, Internal Revenue Service (“IRS-CI”), announced today the filing of criminal charges against TELEFONAKTIEBOLAGET LM ERICSSON (“ERICSSON”), a multinational telecommunications company headquartered in Sweden, and its subsidiary ERICSSON EGYPT LTD. (“ERICSSON EGYPT”) for conspiring to violate the Foreign Corrupt Practices Act (“FCPA”) by bribing government officials, falsifying books and records, and failing to implement reasonable internal accounting controls. The resolutions cover criminal conduct in Djibouti, China, Vietnam, Indonesia, and Kuwait.

Mr. Berman also announced that in connection with the filed charges, ERICSSON EGYPT pled guilty today before United States District Judge Alison J. Nathan, and SDNY and DOJ entered into a deferred prosecution agreement (“DPA”) with ERICSSON. Pursuant to the DPA, ERICSSON admitted to participating in the charged conspiracy. ERICSSON will pay a total criminal penalty of $520,650,432 to the United States, which includes a $9,520,000 criminal fine that ERICSSON agreed to pay on behalf of ERICSSON EGYPT. ERICSSON also agreed to implement rigorous internal controls, retain an independent compliance monitor for a term of three years, and cooperate fully with the Government in any ongoing investigations.

In related proceedings, ERICSSON reached a settlement with the U.S. Securities and Exchange Commission (“SEC”). Under the terms of its civil resolution with the SEC, ERICSSON agreed to pay $539,920,000 in disgorgement of profits and prejudgment interest, which, together with the criminal penalty paid to the United States, yields total criminal and regulatory penalties to be paid by ERICSSON of $1,060,570,432.

U.S. Attorney Geoffrey S. Berman said: “Today Swedish telecom giant Ericsson has admitted to a years-long campaign of corruption in five countries to solidify its grip on telecommunications business. Through slush funds, bribes, gifts, and graft, Ericsson conducted telecom business with the guiding principle that ‘money talks.’ Today’s guilty plea and surrender of over a billion dollars in combined penalties should communicate clearly to all corporate actors that doing business this way will not be tolerated.”

Read more: https://www.justice.gov/usao-sdny/pr/ericsson-agrees-pay-more-1-billion-resolve-foreign-corrupt-practices-act-case

[OldBaldy1701E]

1. Yeah...

"Today’s guilty plea and surrender of over a billion dollars in combined penalties should communicate clearly to all corporate actors that doing business this way will not be tolerated.”

Like most American businesses don't do this to some degree every day... like ANY business would pass up the chance to secure their profits and remove competition. As with most white collar crime, the public could care less as it has been drilled into their heads that profit takes precedence over everything and such acts are just 'business'... the saying used most often to excuse corporate evils perpetrated against the general public. Also, if their fines came to over a billion... you can be assured they made nine billion for that fiscal year... otherwise, their attorneys would be fighting a hell of a lot harder to get it reduced. (Of course, it will get reduced to a more manageable fine as the appeals go forth, so any figure released now is suspect and used more for placation than 'punishment')

[TexasTowelie]

2. The title of the thread says that Erisson agrees to the fine.

There will be no appeal or reduction of the fine amount.

While the government does have an interest into coming into a settlement agreement and it is possible that Ericsson will still profit from the criminal activity, I doubt that the feds are going to let them get away with keeping 90% of the proceeds.