Many telecommunications companies around the world have been investigated and charged for violating the FCPA. Typically, in these cases the U.S. Department of Justice will bring criminal charges and the U.S. Securities and Exchange Commission will bring civil charges.
Telecommunications companies have been caught paying bribes to foreign officials through off-the-books slush funds, sponsorships, and charitable donations. These companies also end up violating the FCPA’s books and records and internal control provisions by hiding the bribe payments using sham consulting agreements and other false transactions.
In the largest telecommunications FCPA settlement, the Swedish telecommunications company, Ericsson, paid a fine of more than $1 billion to settle a bribery scheme in which the company used third party “consultants” to bribe foreign officials in several countries, nearly $150MM in bribes, according to SEC charging documents. Ericsson obtained more than $458 million in profit using this scheme. The SEC charged Ericsson with violations of the anti-bribery, books and records, and internal control provisions of the FCPA. As a result, Ericsson paid more than $539 million in civil penalties and $520 million in criminal penalties.
In 2017, Sweden-based telecommunications provider Telia Company AB paid $965 million in a global settlement with the Securities and Exchange Commission, U.S. Department of Justice, and Dutch and Swedish law enforcement to resolve charges related to FCPA violations to win business in Uzbekistan.
According to the SEC’s order, Telia entered the Uzbek telecommunications market by offering and paying at least $330 million in bribes to a shell company under the guise of payments for lobbying and consulting services that never actually occurred. The shell company was controlled by an Uzbek government official who was the daughter of the President of Uzbekistan and in a position to exert significant influence over other Uzbek officials, causing them to take official actions to benefit Telia’s business in Uzbekistan.
Bribery is not limited to cash payments, either. In 2013 and 2014 Telefonica Brasil hosted a hospitality program in connection with international soccer tournaments. Through this program, Telefônica Brasil offered and provided tickets and hospitality to government officials who were directly involved with or could influence legislative actions, regulatory approvals, and business dealings involving the company. In total, the company provided tickets and hospitality to approximately more than 100 government officials. The company was ordered to pay a fine of more than $4M. The tickets were not accurately reflected in the company’s books and did not adequately enforce their anti-bribery and anticorruption policies.
One purpose of the FCPA is to maintain fair and ethical business practices around the world. Bribery schemes such as these make it more difficult for honest businesses to gain access to the same markets. Whistleblowers are crucial in uncovering these schemes and leveling the playing field for all businesses in the industry.
Whistleblowers should seek the guidance of an attorney when reporting telecommunications FCPA violations. An attorney can help protect your rights and step you through the process of filing a case. Whistleblowers with evidence of FCPA violations may receive a monetary award for coming forward with credible information.
With over 30 years of experience, the attorneys on Baron & Budd’s whistleblower representation team have represented dozens of clients in government fraud cases returning over $5.4 billion to federal and state agencies, with whistleblower recovery shares as high as 49%. They are ready to help if you feel you have the evidence needed to file an SEC whistleblower complaint.
Please call (866) 401-5971 or complete our contact form if you would like more information. For more information, see What You Need to Know About Becoming a Whistleblower. Please understand that contacting us does not mean that you have established an attorney-client relationship with Baron & Budd, P.C.
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Please understand that contacting us does not mean that you have established an attorney-client relationship with Baron & Budd, P.C.