On Apr. 30, DoJ fined Panasonic Avionics Corp. $137mn for FCPA.
- PAC distributes in-flight entertainment and communications for airlines, builders.
- Retain consultants for improper purpose, and conceal payments to a sales agent.
DoJ Alleged Violation
- Penalty due to charges in a scheme to retain consultants for unsuitable purposes.
- Concealed payments to third-party sales agents, violating FCPA accounting rules.
- Firm caused Panasonic to falsify books as used consultants for improper purpose.
- Paid consultants from a budget over which a PAC executive had complete control.
- One person was offered a consulting role, while employed by State-owned airline.
- Consultant paid $875k and PAC earned $92mn from contract that was influenced.
- Employees in Asia, hid use of specific agents, who did not pass internal diligence.
- Relationship with sales agents was terminated as required by compliance policies.
- PAC secretly continued to use agents by rehiring sub-agents of another company.
- Through the process, PAC hid at least $7mn in payment to at least 13 sub-agents.
- PAC entered into deferred prosecution (DPA) re criminal information, filed in court.
- Company charged with causing a falsification of books and accounts of Panasonic.
- As part of the deferred action, PAC will pay total criminal penalty of $137,403,812.
- Agreed to cooperate with the DoJ investigation, and enhance compliance program.
- Implement internal controls and retain independent corporate compliance monitor.
- On Apr. 30, 2018, SEC charged Panasonic re FCPA and accounting fraud violations.
- Fraudulently overstated income, by prematurely recognizing over $82mn revenue.
- PAC backdated an agreement with airline, gave misleading information to auditor.
- Lacked internal accounting control, and failed to have accurate books and records.
- Control must address specific bribery and corruption risks of State-owned entities.
- SEC ordered company, pay $143mn in disgorgement, and pre-judgement interest.
- Combined total of US criminal and regulatory penalties to be paid is over $280mn.