Ex-IMI Executives Enter Guilty Pleas in FCPA Case

Two former executives of the California division of IMI Plc (IMI) have pleaded guilty in federal court in Santa Ana, California to paying bribes to foreign government officials at state-owned companies in Malaysia, China and the United Arab EmiratesBloomberg has reported that the guilty pleas were entered by Stuart Carson, the former president of Control Components Inc., and Hong “Rose” Carson, his wife, who served as the company’s director of sales for both China and Taiwan. Paying bribes to foreign officials is a violation of the Foreign Corrupt Practices Act (FCPA).

Control Components is a Rancho Santa Margarita-based company that manufactures control valves used in oil, gas and nuclear power plants. A court filing alleged that the company made illegal payments to officials at state-owned and private companies in three dozen countries, amounting to approximately $6.85 million. The illegal payments led to sales profits of $46.5 million in the four year period from 2003 through 2007.

Stuart Carson, 73, could serve up to a ten-month prison sentence and Rose Carson, 48, is facing three years of probation, possibly with six months of the sentence to be spent in home confinement. The two had been charged in April 2009, along with four other former Control Components executives. One of the four pleaded guilty last year. In 2009, the company pleaded guilty to violations of the FCPA and the Travel Act. The plea agreement required Control Components to pay a fine of $18.2 million.

The FCPA has been on the books since 1977. In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act granted certain protections for whistleblowers with information about FCPA violations. The 2010 legislation also provided potential financial rewards for individuals who report suspected FCPA violations to the U.S. Department of Justice and the U.S. Securities & Exchange Commission. A qualified whistleblower whose information leads the SEC to recover monetary sanctions in excess of $1 million is entitled to share between 10 and 30 percent of the funds recovered. In this way, the statute is is similar to the qui tam provisions of the federal False Claims Act in that it provides compensation to individuals whose information results in a successful enforcement action.

Waters & Kraus is a national firm with highly skilled lawyers practicing qui tam litigation in four offices, including Dallas, Los Angeles, San Francisco, and Baltimore. Our attorneys have decades of experience successfully representing whistleblowers in a variety of fraud cases. Contact us or call our attorneys at 800.226.9880 to learn more about our practice and how we can assist.

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