ATM manufacturer agrees to pay $48.1 mn for FCPA breach
US ATM manufacturer Diebold has been charged under the Foreign Corrupt Practices Act for paying for trips to Disneyland and elsewhere for bank officials in China and Indonesia, according to the SEC.
Diebold has agreed to give up $22.9 mn in illegal profits and pay a fine of $25.2 mn in a related criminal case, the SEC says. The Ohio-based company has also agreed to appoint an independent compliance monitor as part of the settlement.
Diebold spent about $1.8 mn on travel, entertainment and other gifts for banking officials who had the power to influence their bank’s purchasing policies, the SEC says in a press release. The commission further alleges that Diebold falsified records to hide around $1.2 bn in bribes paid to employees of privately owned banks in Russia.
‘A bribe is a bribe, whether it’s a stack of cash or an all-expenses-paid trip to Europe,’ says Scott Friestad, an associate director in the SEC’s division of enforcement, in the press statement. ‘Public companies must be held accountable when they break the law to influence government officials with improper payments or gifts.’
The SEC says Diebold’s bribery took place from 2005 to 2010 in the form of trips to popular US destinations, including Napa Valley, Universal Studios, Disneyland, the Grand Canyon, Hawaii and Las Vegas. Other officials received paid-for vacations in Australia, New Zealand and Bali.
‘Officials were also treated to European vacations,’ the SEC says. ’For example, eight officials at a government-owned bank in China enjoyed a two-week trip at Diebold’s expense that included stays in Paris, Brussels, Amsterdam, Cologne, Frankfurt, Munich, Salzburg, Vienna, Klagenfurt, Venice, Florence and Rome.’
In all, the SEC says Diebold spent $1.6 mn on officials from state banks in China and more than $147,000 on officials at Indonesia’s government-owned banks. Diebold also gave yearly gifts of between $100 and $600 to ‘dozens of government bank officials’.
The commission says Diebold also paid bribes between 2005 and 2008 to Russian private banking officials, funneling the money through a distributor in Russia via fake service contracts to make them look like legitimate business expenses.
