Discussion purposes only Foreign Corrupt Practices Act Overview Jurisdiction Corrupt Payments Foreign Officials Case study Jurisdiction IssuersA company with any class of stock traded in the US ID: 461458
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Slide1Slide2
This presentation is for
Discussion purposes only.
Foreign Corrupt
Practices ActSlide3
Overview
Jurisdiction
Corrupt Payments
Foreign Officials
Case studySlide4
Jurisdiction
Issuers—A company with any class of stock traded in the US
Domestic Concerns—US persons or companies organized under US laws
Territorial Jurisdiction—Persons and companies acting on behalf of others subject to the FCPASlide5
Corrupt Payments
Obtain or retain business
Offer, promise, or actual payment
Induce the official to misuse his position
Value vs. intent
Corrupt vs. LegitimateSlide6
Foreign Officials
Any officers of a government department or agencySlide7
BAE Case StudySlide8
BAE Systems, plc
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Formerly known as British Aerospace
Subsidiaries throughout world (BAE Systems Inc.)
One of largest defense contractors in the worldSlide9
Primary Focus
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Series of long-term contracts between the U.K. and the Kingdom of Saudi Arabia
BAE served as the prime contractor
Reported that total value of contracts to BAE was in excess of £43,000,000,000 Slide10
Primary Focus
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To investigate the corrupt nature of direct and indirect payments to KSA officials from BAE
Jurisdiction over the corrupt actsSlide11
Typical FCPA Investigation
BAE Investigation
Company under investigation cooperates
Documents are collected from company or individuals
Foreign law enforcement partners provide assistance in the collection of evidence
BAE Systems, plc was not cooperative
BAE would not produce any documents
SFO investigation had been closed. Within the U.S., aspects of the case touched on various levels of the U.S. Government
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HurdlesSlide12
Findings – Marketing Advisors
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Contracts were in legal trusts in offshore locations to avoid detection
Marketing advisors were companies formed to protect the identity of the true advisor
BAE made payments to these advisors via offshore companies
Money from some of the known marketing advisors foreign bank accounts has been deposited into the U.S.Slide13
Findings – Travel Agents
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BAE funded travel for government officials
The travel agents fulfilled any requests the officials had and then bill the expenses back to BAE
Expenses included cars, boats, houses, shopping sprees, shipping
Communications between BAE and the agents were coded
A large portion of expenses originated in the U.S.Slide14
Findings – U.S. Deposits
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BAE also directly funded bank accounts within the U.S. were held by officials affiliated with the contract Slide15
Findings – Non KSA
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Found scheme to use marketing advisers and offshore accounts was not limited to the Al
Yamamah
contract
Examined contracts awarded in the Czech Republic and Hungary for the lease of
Gripen
Fighter Jets
The
Gripens
contained U.S. controlled defense materialsSlide16
Information Filed
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Pleads guilty to conspiracy
BAE Systems plc pleads guilty
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BAE Debarred and Fined
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Civil settlement with
DoS
for alleged violations of AECA and ITAR
BAE Systems debarred and rescinded on same day
Civil penalty of $79,000,000, the largest in Department historySlide19
Questions?
Peter Y. Spohn
Supervisory Special Agent
Washington Field Office
Squad CR-22
703-686-6188
Peter.Spohn@ic.fbi.gov