January 15, 2015 —The Foreign Corrupt Practices Act (FCPA) is a powerful weapon to stop corporations from attempting to win or retain business abroad by making bribe payments to or bestowing lavish gifts on foreign government officials or their family members. Aimed at the problem of foreign bribery, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 allows for substantial financial rewards to insider informants who blow the whistle on FCPA violations.
Avon Agrees to Pay More than $135M in Penalties to Resolve Charges Concerning Concealment of $8M in Illegal Bribes
A wholly owned subsidiary of the multinational beauty product giant, Avon, has pleaded guilty to FCPA violations in China. Avon Products (China) Co. Ltd. (Avon China) has admitted that it attempted to hide over $8 million in cash, lavish gifts, travel, food and entertainment provided to Chinese government officials in an effort to win and retain business in China. The alleged conspiracy to conceal the misconduct took place between 2004 and 2008. Avon China used third party agents to make the bribes and then falsely claimed on the company’s books that the payments were made for legitimate consulting services.
In 2005, the parent company Avon discovered that Avon China was providing lavish gifts to government officials in China and then cooking the books to hide the illegal transactions. Rather than take measures to end the FCPA violations, however, Avon participated in the scheme to hide the misconduct.
Avon China pleaded guilty to criminal charges for conspiring to violate the FCPA’s record-keeping requirements in an effort to hide the foreign bribery. Avon China and its parent, Avon, have agreed to pay more than $67 million in criminal penalties.
Avon also resolved related FCPA allegations with the SEC by agreeing to pay an additional $67,365,013 in disgorgement and prejudgment interest. In total, Avon and Avon China will spend $135,013,013 to resolve the foreign bribery charges.
Whistleblowers Notify Government About FCPA Violations
While Waters & Kraus is not handling this particular FCPA case, we are representing whistleblowers in similar matters involving foreign bribery violations. If you have comparable claims against your employer or another business, contact us by email or call our qui tam attorneys at 855.784.0268 to learn more about our practice and how we can collaborate with the government to redress illegal foreign bribery schemes. Our experienced lawyers, such as George Tankard and Anne Izzo, qui tam lawyers in the firm’s Maryland office, are working to level the playing field in international business operations.