New York-based Comverse Technology Inc. today settled Foreign Corrupt Practices Act violations with the DOJ and SEC for $2.8 million.
In its plea deal with the DOJ, the billing-services provider will pay a criminal penalty of $1.2 million. And it will pay $1.6 million in disgorgement and pre-judgment interest to resolve the SEC's civil charges. Comverse also received a non-prosecution agreement from the DOJ that expires in two years.
Between 2003 and 2006, Comverse's Israeli subsidiary paid bribes of $536,000 to "individuals connected to OTE, a telecommunications provider based in Athens, Greece that is partially owned by the Greek Government." Because of the bribes, Comverse won contracts worth $10 million and made a profit of $1.2 million. It used a third-party agent to make the illegal payments, and recorded them as "agent's commission."
The SEC said Comverse had no "process, formal or otherwise, for conducting due diligence of sales agents or for the independent review of agent contracts outside the sales departments."
Comverse received a non-prosecution agreement from the DOJ for books and records offenses -- instead of a deferred prosecution agreement for substantive bribery charges --in recognition of its "thorough self-investigation and the results of its investigation, voluntary disclosure of the underlying conduct, and full cooperation," the DOJ said.
The company took "extensive remedial efforts and overhauled its overall compliance culture, including through the implementation of mandatory training programs focused on anti-corruption and the use of third-party agents and intermediaries, as well as more rigorous accounting controls for the approval of third-party payments," according to the DOJ's release.
Comverse Technology Inc. trades in the pink sheets under the symbol CMVT.PK.
View the DOJ's April 7, 2011 release here.
Download Comverse's non-prosecution agreement here.
View the SEC's Litigation Release No. 21920 in Securities and Exchange Commission v. Comverse Technology, Inc., Case No. 11-CV-1704-LDW (E.D.N.Y. filed April 7, 2011) here.
Download a copy of the SEC's civil complaint against Comverse here.