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Thursday
Dec172015

Former SAP exec jailed 22 months for Panama bribes

A former regional director of enterprise software firm SAP International Inc. was sentenced to prison Wednesday for bribing officials in Panama to win government technology contracts.

Vicente Eduardo Garcia, 65, of Miami, was ordered to serve 22 months when he appeared before federal judge Charles Breyer in Northern California.

Garcia pleaded guilty in August to one count of conspiracy to violate the Foreign Corrupt Practices Act. He could have been jailed up to five years.

In July, Garcia settled an enforcement action with the Securities and Exchange Commission. He paid about $92,000 in disgorgement and prejudgment interest. 

In his criminal plea, Garcia admitted conspiring with others to bribe two Panama government officials directly and a third official through an agent. 

Garcia and the others used sham contracts and false invoices to disguise the bribes.

The bribes helped SAP’s Panama channel partner win a technology upgrade contract for $14.5 million, including $2.1 million in software licenses for SAP.

The Panama government then awarded the channel partner more contracts that included SAP products worth another $1.2 million.

Garcia personally took over $85,000 in kickbacks for arranging the bribes. That amount was the basis for the disgorgement he paid to settle the SEC civil charges.

The DOJ said it knows the identity of Garcia's co-conspirators. It referred to them in the criminal information (charging document) as Advisor, Consultant A, Consultant B, and Partner.

Advisor was an individual SAP employed in Mexico, the DOJ said.

Consultant A worked for SAP in Panama. He was a long-time acquaintance of one of the Panama officials and Garcia. He died in 2013.

Consultant B also worked for SAP in Panama.

Partner, the DOJ said, was a principal in a Mexico-based company that acted as an SAP channel partner and had operations in several countries.

The agent who acted as an intermediary between Garcia and one of the Panama officials was a close relative of that official, according to the criminal information.

The DOJ said it also knows the identity of the three Panama officials who took bribes. It described all three as "high level government officials" but didn't publicly name them.

Germany-based SAP trades on the New York Stock Exchange. It provides services in more than 180 countries and has more than 68,000 employees.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.