In an unusual tandem settlement, two unrelated U.S. tobacco companies and their foreign subsidiaries today resolved civil and criminal FCPA charges with the SEC and DOJ.
In the criminal cases, two foreign subsidiaries of North Carolina-based Alliance One International Inc. agreed to pay a total of $9.45 million in fines. And a Brazilian subsidiary of Virginia-based Universal Corporation agreed to pay a $4.4 million criminal fine.
Alliance One's Swiss and Kyrgyzstan subsidiaries pleaded guilty in U.S. District Court for the Western District of Virginia to separate three-count criminal informations charging them with conspiring to violate the FCPA and violations of the anti-bribery provisions and books and records provisions of the FCPA.
Universal's Brazilian subsidiary pleaded guilty to a two-count information in the Eastern District of Virginia. It was charged with conspiring to violate the anti-bribery provisions and books and records provisions of the FCPA, and with violating the FCPA's anti-bribery provisions.
The parent companies -- Universal and Alliance One -- entered into non-prosecution agreements with the DOJ and agreed to retain independent monitors for three years. They're cooperating in the ongoing investigations.
In the SEC civil cases, Universal and Alliance One were ordered to pay disgorgement of $4.58 million and $10 million respectively. The SEC charged both companies with violating the FCPA's anti-bribery provisions in Thailand. It also said Alliance One payed bribes in Kyrgyzstan, China, Greece, and Indonesia. And it said Universal made improper payments in Malawi and Mozambique. The SEC's complaints alleged both Universal and Alliance One violated the books and records and internal control provisions of the FCPA.
Alliance One was formed in 2005 with the merger of Dimon Incorporated and Standard Commercial Corporation, both wholesale leaf tobacco merchants. The FCPA violations were committed by employees and agents of foreign subsidiaries of both Dimon and Standard before the merger.
Earlier this week, Bobby Jay Elkin Jr., a former Dimon executive, pleaded guilty to a one-count criminal information charging him with conspiracy to violate the FCPA. Elkin, 50, of Washington, D.C., was Dimon's country manager in Kyrgyzstan. He faces up to five years in prison and a $250,000 fine. His sentencing date hasn't been set.
In April, the SEC brought a civil enforcement action against Elkin and three other former employees of Dimon. It charged them with violating the anti-bribery provisions of the FCPA and aiding and abetting violations. The defendants agreed to settle the charges, with two of them paying $40,000 in penalties. The SEC didn't impose financial penalties on Elkin.
Final sentencing for Alliance One subsidiaries is scheduled for October 21, 2010.
Alliance One International trades on the NYSE under the symbol AOI.
Universal Corporation trades on the NYSE under the symbol UVV.
View the DOJ's August 6, 2010 release here.
View the SEC's Litigation Release No. 21618 and Accounting and Auditing Enforcement Release No. 3170 (both dated August 6, 2010) in Securities and Exchange Commission v. Universal Corporation, Inc., Civil Action No. 01:10-cv-01318 (RWR) (D.D.C.) (filed August 6, 2010) and Securities and Exchange Commission v. Alliance One International Inc., Civil Action No. 01:10-cv-01319 (RMU) (D.D.C.) (filed August 6, 2010) here.
Download the SEC's civil complaint against Universal Corporation here.
Download the SEC's civil complaint against Alliance One International here.