California-based Maxwell Technologies Inc. agreed with the DOJ to pay $8 million to resolve criminal FCPA charges and with the SEC to pay $6.3 million in disgorgement and prejudgment interest to resolve civil charges.
The DOJ gave the company a three-year deferred prosecution agreement. Maxwell can pay the $8 million criminal penalty in three installments over two years.
The energy-storage company admitted bribing Chinese government officials to win sales to state-owned manufacturers of electric-utility infrastructure in several Chinese provinces. It was charged in a two-count information with one count of violating the FCPA’s anti-bribery provisions and one count of violating the books-and-records provisions.
A Swiss subsidiary of Maxwell paid at least $2.5 million in bribes from 2002 through May 2009 for contracts that generated more than $15 million in revenues. A Maxwell executive approved sales contracts with the Chinese state-owned entities knowing that the purchase orders were inflated by 20% to cover the bribes.
The bribes were made with the knowledge and tacit approval of certain former Maxwell officials, the SEC said. "For example, the complaint alleges that former management at Maxwell knew of the bribery scheme in late 2002, when an employee indicated that a payment made in connection with a sale in China appeared to be 'a kick-back, pay-off, bribe, whatever you want to call it, . . . . in violation of US trade laws.' A U.S.-based Maxwell executive replied that 'this is a well know[n] issue" and he warned '[n]o more emails please.'"
In the books and record count of the criminal information, the DOJ said Maxwell "knowingly falsified and caused to be falsifibd books, records, and accounts required to, in reasonable detail, accurately and fairly reflect the transactions and disposition" of the company and its assets.
The Chinese customers mentioned in the information included Pinggao Group Co. Ltd. in Henan Province, New Northeast Electric Shenyang HV Switchgear Co., Ltd. in Liaoning Province, and Xi-an XD High Voltage Apparatus Co. in Shaanxi Province.
Maxwell Technologies Inc. trades on NASDAQ under the symbol MXWL.
View the DOJ January 31, 2011 release here.
Download a copy of the criminal information in U.S. v. Maxwell Technologies, Inc. here.
Download a copy of Maxwell's deferred prosecution agreement here.
View SEC's Litigation Release No. 21832 and Accounting and Auditing Enforcement Release No. 3236 (both dated January 31, 2011) in U.S. Securities and Exchange Commission v. Maxwell Technologies Inc., Civil Action No. 1:11-CV-00258 (DDC) (BAH) here.
View the SEC's civil complaint against Maxwell here.