Tuesday, March 9, 2010

Defense Contractor Pleads Guilty, Must Pay Criminal Fine of $400 Million

The DOJ announced on March 1, 2010 the guilty plea of defense contractor, BAE Systems

WASHINGTON—BAE Systems plc (BAES) pleaded guilty today in U.S. District Court in the District of Columbia to conspiring to defraud the United States by impairing and impeding its lawful functions, to make false statements about its Foreign Corrupt Practices Act (FCPA) compliance program, and to violate the Arms Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR), announced Acting Deputy Attorney General Gary G. Grindler. BAES was sentenced today by U.S. District Court Judge John D. Bates to pay a $400 million criminal fine, one of the largest criminal fines in the history of DOJ’s ongoing effort to combat overseas corruption in international business and enforce U.S. export control laws.
BAES is a multinational defense contractor with headquarters in the United Kingdom and with a U.S. subsidiary—BAE Systems Inc.—headquartered in Rockville, Maryland. None of the criminal conduct described in the plea involved the actions of BAE Systems Inc.
The FCPA makes it illegal for certain businesses and individuals, or anyone taking action within U.S. territorial jurisdiction, corruptly to make payments to foreign government officials for the purpose of obtaining or retaining business. In addition, the FCPA prohibits corruptly making payments to a third party, while knowing that all or a portion of the payments will go directly or indirectly to a foreign government official for the purpose of obtaining or retaining business. Despite BAES’s representations to the U.S. government to the contrary, BAES knowingly and willfully failed to create sufficient compliance mechanisms to prevent and detect violations of the anti-bribery provisions of the FCPA.

Read the whole thing here.

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