Control Components Inc. pleaded guilty to violating the anti-bribery provisions of the Foreign Corrupt Practices Act and the Travel Act, admitting to bribing foreign officials in a decade-long scheme.
As part of the plea agreement, Control Components agreed to pay a criminal fine of $18.2 million; create, implement and maintain a comprehensive anti-bribery compliance program; retain an independent compliance monitor for a three-year period to review the design and implementation of Control Components’ anti-bribery compliance program and to make periodic reports to CCI and the Department of Justice; serve a three-year term of organizational probation; and continue to cooperate with the Department of Justice in its ongoing investigation.
A few months ago, two former executives of Control Components pleaded guilty to conspiring to bribe officers and employees of foreign state-owned companies on behalf of the company. Mario Covino was CCI’s former director of worldwide factory sales. He pleaded guilty to one count of conspiracy to violate the FCPA and admitted to causing the payment of $1 million in bribes to officers and employees of several foreign state-owned companies. Richard Morlok was CCI’s former finance director. He pleaded guilty to one count of conspiracy to violate the FCPA and admitted to causing the payment of $628,000 in bribes to officers and employees of several foreign state-owned companies.
These days, another FCPA case seems to be fairly routine. There are two aspects of this case that are worth noting.
First, the payments were made to officers of state-owned companies, not to government bureaucrats. This is the peril of working with state-owned enterprises. As far as the FCPA and the DOJ are concerned, there is no difference.
The second item to note is that the DOJ included not only the suitcases of cash, but also included vacations to Disneyland, Las Vegas and Hawaii. The Information also included lavish sales events to entertain current and potential customers.
When dealing with customers and hosting sales events, it is important to identify who may be a government official for purposes of the Foreign Corrupt Practices Act.
References:
- FCPA Enforcement … It’s More Than Just Suitcases Full of Cash to Government Officials by FCPA Professor
- Guilty Plea by Control Components by The FCPA Blog
- Criminal information against Control Components hosted on JD Supra
- Plea Agreement with Control Components hosted on JD Supra
- Indictment of Former Executives of Control Components hosted on JD Supra
- Plea Agreement with Mario Covino hosted on JD Supra
- Plea Agreement with Richard Morlok hosted on JD Supra
