November 12, 2014 — The Foreign Corrupt Practices Act (FCPA) is a powerful weapon to stop multinational 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.
California Medical Diagnostics And Life-Sciences Company Allegedly Cooked Books Concerning Intermediaries Used To Further Government Sales In Russia
Bio-Rad Laboratories Inc. (Bio-Rad), a California life-sciences and medical diagnostics company, will spend $14.35 million to settle allegations that it violated the FCPA with regard to record keeping concerning Russian sales.
Bio-Rad admitted that its subsidiary in France, Bio-Rad SNC, hired intermediary companies to whom it paid 15 to 30 percent commissions for the intermediaries’ alleged services associated with sales to the Russian government. In reality, however, the intermediary companies did not perform the services for which they were compensated. Nevertheless, Bio-Rad’s high-level management approved the commissions knowing that the purported work had not been done. These managers’ approval allowed Bio-Rad SNC to falsely record the commissions on its books, which ultimately resulted in the falsification of Bio-Rad’s books. Bio-Rad’s management also neglected to establish adequate controls and compliance systems concerning operations in Russia, though the managers knew that their actions would result in the payment of above-market commissions to the intermediary companies for little to no services.
In addition to the hefty penalty, Bio-Rad must continue to report to the U.S. Justice Department concerning its enhanced compliance procedures. The SEC has announced that Bio-Rad also will pay $40.7 million in disgorgement and prejudgment interest concerning the company’s sales practices in Russia, Vietnam and Thailand.
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 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, like Michael Armitage and Gary Paul in the firm’s office in California, where the company involved in this FCPA story is located, are working to level the playing field in international business operations.