Ericsson to Pay Over $1 Billion to Settle U.S. Bribery Charges
December 06 2019 - 6:49PM
Dow Jones News
By Dave Michaels
WASHINGTON -- Telecom-equipment maker Ericsson AB agreed to pay
more than $1 billion to settle U.S. allegations that it conspired
to make illegal payments to win business in five countries.
The settlement includes a $520 million criminal penalty and $540
million in illicit profits that must be disgorged, the U.S. Justice
Department said Friday. A subsidiary of the Swedish company,
Ericsson Egypt Ltd., pleaded guilty in Manhattan federal court to
conspiracy to violate antibribery laws.
Ericsson AB entered into a deferred-prosecution agreement with
prosecutors requiring it to retain a compliance monitor for three
years and to cooperate with any related probes.
The Justice Department said the wrongdoing occurred from 2000 to
2016 in Djibouti, China, Vietnam, Kuwait and Indonesia. In a
separate complaint, the Securities and Exchange Commission said
Ericsson subsidiaries won business worth about $427 million by
using third parties to bribe officials in Saudi Arabia, China and
Djibouti.
In Djibouti, about $2.1 million in bribes were paid to
high-ranking government officials to win a contract with a
state-owned telecommunications firm, prosecutors said. The payments
were facilitated through a sham contract with a consulting company
and the use of fake invoices, U.S. authorities said. Ericsson's
Egypt subsidiary oversaw the Djibouti operations.
In China, Ericsson's subsidiaries were responsible for tens of
millions of dollars paid to agents, consultants and service
providers, "a portion of which" was funneled to an account that
funded gifts, travel and entertainment for overseas officials,
prosecutors said.
"Ericsson's corrupt conduct involved high-level executives and
spanned 17 years and at least five countries, all in a misguided
effort to increase profits," said Assistant Attorney General Brian
Benczkowski.
Steve Peikin, the SEC's co-director of enforcement, said the
case represented an "egregious bribery scheme" that involved "slush
funds and funneling money through sham intermediaries."
Ericsson said Thursday that it expected a previously announced
provision of $1.2 billion would cover fines and other costs related
to the probe. An attorney for Ericsson declined to comment.
Write to Dave Michaels at dave.michaels@wsj.com
(END) Dow Jones Newswires
December 06, 2019 18:34 ET (23:34 GMT)
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