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Business Crimes Hotline
Tyco Resolves DOJ and SEC FCPA Enforcement Action
On Sept. 24, Tyco International Ltd. (Tyco) resolved enforcement actions by the DOJ and the SEC for alleged violations of the FCPA. Fines and penalties totaled over $26 million ($13.68 in the DOJ enforcement action and over $13 million in the SEC enforcement action). As part of the resolution, Tyco Valves & Controls Middle East Inc. (TVC ME), an indirect wholly owned subsidiary of Tyco, plead guilty before U.S. District Judge Claude M. Hilton of conspiring to violate the FCPA in the Eastern District of Virginia, and Tyco entered into a related non prosecution agreement (NPA) with the DOJ.
TVC ME marketed and sold industrial equipment throughout the Middle East for various oil, gas, petrochemical, commercial construction, water treatment, and desalination industries. According to the criminal information, TVC ME, along with others, bribed employees of end-customers in Saudi Arabia, the U.A.E., and Iran, including employees of Saudi Aramco, Emirates National Oil Company, Vopak Horizon Fujairah, and the National Iranian Gas Company, in order to retain business. TVC ME improperly recorded bribe payments in its books, records and accounts, describing the payments as consultancy costs, commissions, or equipment costs. At sentencing, the court ordered TVC ME to pay $2.1 million, which was included in the overall $13.68 million penalty against Tyco.
According to the NPA, in addition to the $26 million payment, Tyco must continue to implement an enhanced compliance program and internal controls designed to prevent and detect future FCPA violations. Tyco must also report annually to the DOJ over the next three years, but is not required to retain an external compliance monitor.
Business Crimes Hotline and In the Courts were written by Christian E. Izaguirre and Associate Editor Jamie Schafer, respectively. Both are associates at Kirkland & Ellis LLP, Washington, DC.
Tyco Resolves DOJ and SEC FCPA Enforcement Action
On Sept. 24, Tyco International Ltd. (Tyco) resolved enforcement actions by the DOJ and the SEC for alleged violations of the FCPA. Fines and penalties totaled over $26 million ($13.68 in the DOJ enforcement action and over $13 million in the SEC enforcement action). As part of the resolution, Tyco Valves & Controls Middle East Inc. (TVC ME), an indirect wholly owned subsidiary of Tyco, plead guilty before U.S. District Judge
TVC ME marketed and sold industrial equipment throughout the Middle East for various oil, gas, petrochemical, commercial construction, water treatment, and desalination industries. According to the criminal information, TVC ME, along with others, bribed employees of end-customers in Saudi Arabia, the U.A.E., and Iran, including employees of Saudi Aramco, Emirates National Oil Company, Vopak Horizon Fujairah, and the National Iranian Gas Company, in order to retain business. TVC ME improperly recorded bribe payments in its books, records and accounts, describing the payments as consultancy costs, commissions, or equipment costs. At sentencing, the court ordered TVC ME to pay $2.1 million, which was included in the overall $13.68 million penalty against Tyco.
According to the NPA, in addition to the $26 million payment, Tyco must continue to implement an enhanced compliance program and internal controls designed to prevent and detect future FCPA violations. Tyco must also report annually to the DOJ over the next three years, but is not required to retain an external compliance monitor.
Business Crimes Hotline and In the Courts were written by Christian E. Izaguirre and Associate Editor Jamie Schafer, respectively. Both are associates at
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