In the past six months alone, five major international corporations have settled lawsuits filed by the SEC for similar offenses involving secret payoffs to government officials, fraudulent payments to nonexistent companies, and kickbacks to influential people in exchange for big money contracts.
In July, Orthofix International (NASDAQ:OFIX), a Texas-based international bio-medical corporation that focuses on spinal implant products and other regenerative orthopedic products, settled a lawsuit alleging the bribing of Mexican officials in exchange for contracts with government hospitals. The illegal pocket-lining lasted for more than seven years, from 2003-2010. Orthofix agreed to pay fines in excess of $5.2 million to squash the lawsuit.
In August, two more lawsuits were settled within a week of each other. Oracle Corporation (NYSE:ORCL) agreed to pay $2 million to stop charges that it knowingly hid profits and used some of the money to bribe Indian officials. The rest of the secret funds allegedly were funneled through shell corporations and phony vendors in a massive multi-million dollar embezzlement scheme that lasted from 2005-2007.
Similar charges were filed and subsequently settled in a case against Pfizer Inc. (NYSE:PFE) that alleged the company knowingly violated FCPA regulations for a period of 11 years by bribing officials in eight countries across Europe and Asia. Payoffs were concealed and listed as legitimate business expenses such as marketing, advertising, and training, when in fact the money had actually been handed over to foreign officials who pushed through drug approvals and government doctors who prescribed excessive amounts of Pfizer products. The company agreed to pay $45 million to settle the case.
In September, Tyco International (NYSE:TYC) settled a lawsuit with the SEC that alleged the company bribed officials throughout Asia and the Middle East in an effort to obtain and retain high-paying government contracts. These FCPA violations continued from 1999-2009, and involved more than 50 foreign countries. Secret payments and illegal deals were made with government officials and improperly listed as legitimate expenses or commissions in an effort to cover up the misconduct. Tyco settled for $26.8 million.
The pattern is all too clear – line the pockets of influential officials in exchange for government contracts, disguise the payments as legitimate business expenses, and make as much money as possible until the authorities catch on.
There’s no apparent fear of the law or of the consequences, either. These corporations rake in millions of dollars, sometimes tens of millions, over the course of many years as a result of successful illegal business practices. What actually happens when they get caught? Another payoff! Although structured as a fine for violating international regulations, offending companies simply make a deal with the U.S. government and continue doing business as usual.
Clearly, there is an advantage to bribing people of power in foreign countries, and multi-national corporations surely already account for bribes and secret payouts, as well as the potential fines and settlements for getting caught.
This article is a Twisted Nonsense Exclusive! (12/19/2012)
In September, Tyco International (NYSE:TYC) settled a lawsuit with the SEC that alleged the company bribed officials throughout Asia and the Middle East in an effort to obtain and retain high-paying government contracts. These FCPA violations continued from 1999-2009, and involved more than 50 foreign countries. Secret payments and illegal deals were made with government officials and improperly listed as legitimate expenses or commissions in an effort to cover up the misconduct. Tyco settled for $26.8 million.
The pattern is all too clear – line the pockets of influential officials in exchange for government contracts, disguise the payments as legitimate business expenses, and make as much money as possible until the authorities catch on.
There’s no apparent fear of the law or of the consequences, either. These corporations rake in millions of dollars, sometimes tens of millions, over the course of many years as a result of successful illegal business practices. What actually happens when they get caught? Another payoff! Although structured as a fine for violating international regulations, offending companies simply make a deal with the U.S. government and continue doing business as usual.
Clearly, there is an advantage to bribing people of power in foreign countries, and multi-national corporations surely already account for bribes and secret payouts, as well as the potential fines and settlements for getting caught.
This article is a Twisted Nonsense Exclusive! (12/19/2012)
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