A former executive of Siemens has pleaded guilty in a United States court to his part in a US$100 million bribery scheme in Argentina. Former chief financial officer of Siemens Argentina Andres Truppel helped to secure a US$1 billion contract with the Argentine government to produce national identity cards by paying bribes to officials. The news comes four years after Truppel and seven other Siemens executives were indicted. Siemens agreed to pay more than US$1.3 billion in 2008 to resolve bribery investigations in the United States and Germany, US$449 million of which related to violations of the Foreign Corrupt Practices Act (FCPA) by Siemens and its Argentine subsidiary.
The United Kingdom has decided not to expand the remit of the Bribery Act, which would have made it easier to prosecute corrupt companies. United Kingdom junior Justice Minister Andrew Selous said there was no need to expand corporate criminal liability laws as there was little evidence of corporate misconduct going unpunished. The decision marks a significant U-turn by a re-elected Conservative government that in 2012 described the number of corporate convictions as being “too low”. The move comes amid a general trend of deregulation for business in the United Kingdom under the new government.
Microsoft and a Chinese partner have been fined by China’s commerce ministry for antitrust violations related to an Xbox game console venture. However, the United States-headquartered technology company has avoided serious repercussions because the practice was considered not to hamper free market competition. Antitrust regulations were violated when Microsoft and Shanghai Oriental Pearl Media failed to report their joint venture when it crossed the market share threshold that requires disclosure.
The owner of a healthcare clinic in Orlando, Florida will spend the next five years in jail for his role in a US$2.4 million healthcare fraud. Juan Carlos Delgado and his wife Nereyda Infante were both sentenced for engaging in an illicit scheme designed to defraud the United States’ Medicare programme. In addition to Delgado’s five-year sentence, fellow clinic owner Infante was sentenced to one year and one day in jail while the defendants were also ordered to pay US$1,520,850 in restitution and required to forfeit the same amount again. The sentencing is the latest example of a healthcare clinic attempting to defraud the Medicare programme.
United States regulators have confirmed that a car recall sparked by faulty airbags is set to expand. The recall began when it was discovered that Japanese airbag manufacturer Takata Corporation was producing substandard airbags. The United States National Highway Traffic Safety Administration (NHTSA) has now asked firms such as Mercedes-Benz and Jaguar-Land Rover to identify which of their models use Takata products.
Two former consultants to the United Nations (UN) have been found guilty of corruption in connection with contracts for life-saving drugs in the Democratic Republic of Congo. Guido Bakker and Sijbrandus Scheffer accepted approximately US$990,000 from Danish pharmaceutical company Missionpharma in exchange for helping the company secure valuable contracts. The guilty humanitarian workers had aimed to rig contracts carrying a value of US$100 million from the malpractice.
A number of major Western hotel chains are rushing to expand their operations in Myanmar in an attempt to capitalise on the Southeast Asian nation’s rapidly expanding economy despite the remaining risk of sanctions. AccorHotels and Hilton Worldwide both plan to open new branches by 2017, having previously moved quickly to enter the market in 2014 following the easing of sanctions targeting the country’s military dictatorship by the United States and Europe. However, many of the well-connected local companies with whom they must partner remain subject to United States sanctions. The development is a reminder that companies need to be careful when operating in countries that have been subject to sanctions, even if they have since been eased.
A number of apps in Apple’s App Store have been infected with malicious code that could result in customers having their data stolen. The majority of victims appear to be based in China, where the attacks started. The malicious code was implanted in a version of the software used to make apps for Apple tablets and phones. Many companies then used the faulty version of the software because it downloaded faster in China than Apple’s legitimate version.
Former Malaysian ruling party official and anti-corruption activist Khairuddin Abu Hassan has been arrested by the country’s police as he tried to leave for the United States to meet with officials from the Federal Bureau of Investigation (FBI). Khairuddin has been charged with attempting to “undermine parliamentary democracy”, which critics argue is an ambiguous accusation that is open to government abuse. Khairuddin had recently visited a number of countries to highlight the corruption allegations facing Malaysian Prime Minister Najib Razak.
Executives from seven companies in Indonesia have been arrested and could face fines and prison sentences of up to 15 years in connection with haze caused by forest fires. Although air pollution in the region caused by illegal fires is an annual problem, this year is one of the worst and the haze has spread hundreds of kilometres across Southeast Asia. The case serves as a reminder to companies to make sure that suppliers do not pollute the environment while providing products and services to the business.
The United States has agreed not to impose sanctions on Chinese businesses and individuals at least until after next week’s state visit by Chinese President Xi Jinping. The United States is considering action against China after it linked a number of cyberattacks on United States industry to hackers in the country who then shared the findings with domestic entities. The decision to hold back on sanctions followed an all-night meeting last week between senior officials from both countries, during which “substantial agreement” was reached on several cybersecurity issues.
United States prosecutors have said they will soon be making more arrests in connection with the ongoing FIFA corruption scandal. In a joint update with Swiss authorities on their parallel investigations, United States prosecutors said that new evidence had emerged that affected both entities and individuals associated with football’s world governing body. This included seized property in the Alps linked to alleged money laundering, as well as a 2005 contract signed by FIFA head Sepp Blatter and linked to the sale of television rights to disgraced FIFA official Jack Warner at a massively reduced rate.
The Swiss Senate is set to pass a new law that will allow the country’s authorities to investigate suspected private corruption without an employee of the organisation in question first making a complaint. The most recent draft of the new law, which has been dubbed ‘Lex FIFA’ due to its association with the recent FIFA scandal, has been approved by both chambers of Switzerland’s parliament. A final vote will take place on 25 September, with the new law likely to come into effect in 2016 assuming it is not challenged in a referendum.
Two Chinese officials are set to stand trial in Kenya following allegations that they offered bribes in connection with the construction of a railway in the East African country. Senior official Liu Yabin and liaison officer Tang Ju from state-owned China Road and Bridge Corporation were arrested for allegedly trying to bribe Kenyan highways authority officials in an attempt to avoid overloaded truck restrictions. The incident is a reminder to investors to conduct higher levels of due diligence when pursuing business opportunities in Africa.
The chief executive of United Airlines’ parent company United Continental Jeff Smisek has resigned amid a United States federal investigation associated with the Port Authority of New York & New Jersey. Also connected to the probe were the departures of the company’s executive vice-president of communications and government affairs and its senior vice-president of corporate and government affairs. Although shares in United fell by as much as three percent following the news, the company’s very public initiative sends a strong message to employees and customers that the board will not tolerate misconduct.
The finance minister for the South Pacific island nation of Vanuatu has been convicted on two counts of bribery. Willie Jimmy was one of 18 MPs accused of bribery that amounted to US$452,000 worth of illicit payments. Jimmy pleaded guilty last week for breaching the leadership and penal codes. The opposition meanwhile is attempting to capitalise on the scandal and is circulating a petition for a no-confidence motion in parliament against Prime Minister Sato Kilman’s government. Companies need to conduct investigations and audits if a country in which they operate becomes embroiled in a scandal.
A hospice group in the United States has settled allegations that it violated the False Claims Act by submitting false claims for delivery of continuous home care hospice services to patients who were not entitled to receive such treatment. The almost US$6 million settlement will be shared with the three former company employee whistleblowers who filed a lawsuit from which the allegations arose. Under the qui tam provisions of the Act, private citizens can bring a suit on behalf of the government and share in the recovery.
Massachusetts-based biotechnology company Genzyme Corporation has agreed to undertake several groundbreaking measures to enhance its internal compliance programme as part of a two-year deferred prosecution agreement (DPA) with the United States Department of Justice (DOJ). The wholly-owned subsidiary of French pharmaceutical company Sanofi resolved criminal charges and admitted to violating the federal Food, Drug and Cosmetic Act (FDCA) by unlawfully distributing the surgical device Seprafilm.