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FCPA Blog Daily News

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Tuesday
Jun162015

IAP Worldwide Services pays $7.1 million criminal fine to settle FCPA offenses, former VP pleads guilty

A Florida defense and government contracting company, IAP Worldwide Services Inc., agreed to pay a $7.1 million penalty to resolve the DOJ's investigation into an alleged conspiracy to bribe Kuwaiti officials to win a contract.

A former vice president of IAP also pleaded guilty Tuesday.

James Michael Rama, 69, of Lynchburg, Virginia, pleaded guilty before U.S. District Court Judge James C. Cacheris of the Eastern District of Virginia to one count of conspiracy to violate the anti-bribery provisions of the FCPA. 

His sentencing is scheduled for September 11.

Privately held IAP entered into a non-prosecution agreement with the DOJ.

The company provides facility management services, contingency support, and technical services. Most of its customers are government entities. It's based in Cape Canaveral, Florida.

In 2004, Kuwait launched a project to develop nationwide surveillance capabilities through closed-circuit television. 

IAP and Rama made a plan to make sure IAP would be the contractor selected for the project.

In February 2006, Rama and other IAP executives and senior employees set up a shell company called Ramaco to bid on the first phase project, the DOJ said. The plan involved concealing IAP’s role while Ramaco wrote  requirements for the remainder of the project that only IAP could fulfill.

Ramaco won a $4 million contract for the first phase of the work.

Rama and IAP agreed to divert half of the $4 million to a consultant who would bribe Kuwaiti officials for award of the next phase of the work.

Between September 2006 and March 2008, IAP and the co-conspirators paid the consultant almost $1.8 million, "understanding that some or all of the funds would be used to bribe Kuwaiti government officials."

The DOJ said it entered into the non-prosecution agreement with AIP "based on a variety of factors, including but not limited to IAP’s cooperation." 

The NPA requires IAP’s continued cooperation. And the company has to "review of its existing internal controls, policies and procedures, and make any necessary modifications to ensure . . . accurate record keeping and a rigorous anti-corruption compliance program." 

IAP is also required to report from time to time to the DOJ and the U.S. Attorney’s Office of the Eastern District of Virginia "regarding remediation and implementation of the aforementioned compliance program and internal controls, policies and procedures."

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