A UK subsidiary of an unnamed US company has agreed to pay more than £6m for corruption and bribery offences in the Serious Fraud Office’s second deferred prosecution agreement.
The deal struck between the company and the SFO was approved today by Lord Justice Leveson at Southwark Crown Court, sitting at the Royal Courts of Justice. The counterparty to the DPA is identified as 'a UK SME' which cannot be named due to ongoing, related legal proceedings.
The indictment alleged conspiracy to corrupt, contrary to section 1 of the Criminal Law Act 1977, conspiracy to bribe, contrary to section 1 of the same act, and failure to prevent bribery, contrary to section 7 of the Bribery Act 2010, all in connection with contracts to supply its products to customers in a number of foreign jurisdictions.
In line with DPA proceedings the indictment was immediately suspended.
The company will pay financial orders of £6,553,085, which includes a £6,201,085 disgorgement of gross profits and a £352,000 financial penalty. £1,953,085 of the disgorgement will be paid by the SME’s US registered parent company as repayment of a significant proportion of the dividends that it received from the SME over the indictment period.
Leveson stated: ‘[This conclusion] provides an example of the value of self-report and co-operation along with the introduction of appropriate compliance mechanisms, all of which can only improve corporate attitudes to bribery and corruption.’
SFO director David Green said: ‘This case raised the issue about how the interests of justice are served in circumstances where the company accused of criminality has limited financial means with which to fulfil the terms of a DPA but demonstrates exemplary co-operation.’
The charges, now suspended, covered events in June 2004 to June 2012, in which a number of the company’s employees and agents were involved in the systematic offer and/or payment of bribes to secure contracts in foreign jurisdictions. The SFO investigation took two years to conclude.
The SFO said that the SME’s parent company implemented a global compliance programme in late 2011. In August 2012, this compliance programme resulted in concerns being raised within the business about the way in which a number of contracts had been secured.
The SME took immediate action, retaining a law firm that undertook an independent internal investigation. The law firm delivered a report to the SFO on 31 January 2013, after which the SFO conducted its own investigation.
Christopher David, counsel in WilmerHale’s white collar crime team, told the Gazette: ‘The judgment may well give comfort to lawyers and companies that the DPA regime is going to provide a meaningful alternative to a guilty plea in cases of corporate misconduct – not least because the penalty has been carefully designed to remove the benefit of the criminality but not force the company into insolvency.’
The judgment, David noted, ‘does… reinforce the SFO’s stated view that companies that self-report and provide full co-operation will be see this co-operation recognised by a favourable resolution’.