Tyco Pays at Least $26M to Settle Bribery Charges

     (CN) – Tyco International agreed to pay more than $26 million in penalties to resolve federal charges that it bribed foreign officials in exchange for contracts, the Justice Department announced.
     Tyco, a Swiss-based manufacturer of security, fire protection and energy products, and a subsidiary pleaded guilty to a criminal charge for conspiring to violate the Foreign Corrupt Practices Act (FCPA).
     As part of the $26 million-plus agreement with the Justice Department and the U.S. Securities and Exchange Commission Tyco agreed to pay a $13,68 million penalty for falsifying books and records in connection with bribes its subsidiaries paid to foreign officials around the world to win contracts.
     In the parallel civil proceedings, Tyco consented with the SEC to a proposed final judgment that orders the company to pay $10,564,992 in disgorgement and $2,566,517 in prejudgment interest – which, together with the Department of Justice penalty, totals more than $26 million.
     “Today, a Tyco subsidiary pleaded guilty to bribing officials of state-owned entities in various countries to score valuable petroleum contracts and, with Tyco International, agreed to pay nearly $14 million in penalties,” said Assistant Attorney General Breuer. “Together with the SEC, we are leading a fight against corruption around the globe.”
     In a related matter, Tyco Valves & Controls Middle East Inc., pleaded guilty before U.S. District Judge Claude M. Hilton for conspiring to violate the anti-bribery provisions of the FCPA.
     According to the Justice Department, the company paid bribes to officials employed by Saudi Aramco, an oil and gas company controlled and managed by the government of the Kingdom of Saudi Arabia, in order to obtain contracts.
     At the conclusion of the plea proceeding, the court sentenced TVC ME to pay a $2.1 million fine, which is included as part of the $13.68 million penalty, the agency said.
     “For more than 10 years, various Tyco entities bribed foreign officials and cooked the books to hide the payments,” said U.S. Attorney MacBride. “The Eastern District of Virginia has a strong partnership working with the Criminal Division’s Fraud Section on FCPA cases and is aggressively using venue provisions to hold FCPA violators accountable for their conduct.”
     As part of the settlement, the department entered into a non-prosecution agreement (NPA) with Tyco. According to the NPA, a number of Tyco’s subsidiaries made payments, both directly and indirectly, to government officials in order to obtain and retain business with private and state-owned entities, and falsely described the payments in Tyco’s corporate books, records and accounts as legitimate charges.
     Federal prosecutors said that from 1999 to 2009, Tyco knowingly conspired to falsify its books and records in connection with these payments.
     In addition to the monetary penalty, Tyco and TVC ME also agreed to cooperate with the department, to report periodically to the department concerning the companies’ compliance efforts, and to continue to implement an enhanced compliance program and internal controls designed to prevent and detect FCPA violations.

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