HP Fined $108 Million for Violating Anti-bribery and Foreign Corrupt Practices Act

 Hewlett Packard Company headquarters in Palo Alto, California.

Hewlett Packard Company headquarters in Palo Alto, California.

A U.S. District Judge on Thursday penalized California-based tech goliath Hewlett-Packard Co. and its subsidiaries in Russian, Poland and Mexico a combined sum of $108 million after it conceded to charges of paying off government authorities in Russia, Poland and Mexico to secure huge technology contracts with the prosecutor’s general office in that nation.

Northern Californian US District Judge Lowell Jensen has fined HP to pay $108 million to the Department of Justice and the U.S. Securities and Exchange Commission after HP pleaded guilty to breaching anti-bribery and Foreign Corrupt Practices Act, U.S. Attorney Melinda Haag of the Northern District of California said in a release. A long-running investigation was conducted by the Department of Justice, International Law Enforcement Partners and the FBI.

HP’s Russian subsidiary, ZAO Hewlett-Packard A.O has been fined $58.8 million after it admitted of bribing Russian government authorities to secure massive contracts from the Russian Prosecutor General’s office.

“Hewlett-Packard subsidiaries, co-conspirators or intermediaries created a slush fund for bribe payments, set up an intricate web of shell companies and bank accounts to launder money, employed two sets of books to track bribe recipients, and used anonymous email accounts and prepaid mobile telephones to arrange covert meetings to hand over bags of cash,” said Justice Department Deputy Assistant Attorney General Bruce Swartz in a statement.

HP’s Polish subsidiary, Hewlett-Packard Polska, Sp. Z o.o., and Mexican subsidiary, Hewlett-Packard Mexico, S. de R.l. de C.v., have likewise been sentenced for bribery. HP Poland bribed government authorities to secure contracts with Poland’s national police office, while HP Mexico paid off the authorities with $125,000 to secure contracts with Mexico’s state-owned petroleum organization Pemex. HP Poland bribed more than $600,000 in cash bribes and gifts from the slush fund to the police agency’s director of information and communications technology.

As per the proposed final judgement documented by the SEC on April 9, the three HP subsidiaries will pay a combined sum of $76.8 million in criminal punishments and forfeiture. HP has officially paid an additional $31.5 million in disgorgement, prejudgment interest and civil penalties.

U.S. District Judge Lowell Jensen of the Northern District of California notified during the final judgment after HP Russia pleaded guilty earlier in the morning. HP Russia executives are charged of making a multi-million dollar secret slush reserves, a part of which was utilized to pay off Russian government authorities who honored the organization an agreement esteemed at more than 35 million euros.

“In a brazen violation of the FCPA, Hewlett Packard’sRussia subsidiary used millions of dollars in bribes from a secret slush fund to secure a lucrative government contract. Even more troubling was that the government contract up for sale was with Russia’s top prosecutor’s office,” said Principal Deputy Assistant Attorney General Miller.

The money from the slush fund were used on luxury trips to Las Vegas, private-grand tour to the Grand Canyon, luxury automobiles, luxury gems, clothing, furniture, laptops and mobile devices and more such items, as per the statement of facts filed with the plea agreement.

“The Criminal Division has been at the forefront of this fight because when corruption takes hold overseas, American companies and the rule of law are harmed. Today’s conviction and sentencing are important steps in our ongoing efforts to hold accountable those who corrupt the international marketplace,” Miller added.

Avatar
Carrie Ann
Carrie Ann is Editor-in-Chief at Industry Leaders Magazine, based in Las Vegas. Carrie covers technology, trends, marketing, brands, productivity, and leadership. When she isn’t writing she prefers reading. She loves reading books and articles on business, economics, corporate law, luxury products, artificial intelligence, and latest technology. She’s keen on political discussions and shares an undying passion for gadgets. Follow Carrie Ann on Twitter, Facebook

Recent Posts

Hyundai commits $7.4 billion in US investment by 2025

Hyundai commits $7.4 billion in US investment by 2025

South Korea’s Hyundai Motor Co., announced on Thursday it will soon start manufacturing electric vehicles in the United States. The automaker plans to produce EVs, upgrade produc
2 days ago
US inflation report of 4.2 percent raises concerns

US inflation report of 4.2 percent raises concerns

The US reported the highest inflation recorded in the last dozen years at 4.2 percent in April, riding on government stimulus packages, improved energy prices, better spending and
2 days ago
Aon – Willis asset disposal aims to ease approval of $30 billion merger

Aon – Willis asset disposal aims to ease approval of $30 billion merger

Aon Plc and Willis Towers Watson have agreed to sell $3.6 billion worth of assets to rival Arthur J. Gallagher & Co. in a bid to appease European competition regulators over th
3 days ago
Roblox declares Q1, reports $387 million revenue as bookings increase

Roblox declares Q1, reports $387 million revenue as bookings increase

Roblox, the hugely popular online gaming platform, reported its first-quarter earnings after becoming a listed company. Its revenue more than doubled as the videogame company benef
4 days ago
Weak US job report results in volatile market

Weak US job report results in volatile market

A weak job report resulted in a record close on Friday for the US stocks. The US labor department’s monthly non-farm payrolls report revealed employers hired 266,000 new workers
5 days ago
Star and Blackstone launch bids to buyout Australia’s Crown Resorts

Star and Blackstone launch bids to buyout Australia’s Crown Resorts

A bidding war has broken out between Australian casino company Star Entertainment Group and US private equity investor Blackstone Group over Crown Resorts, Australia’s bigges
5 days ago