NEW YORK – Swedish telecom group Ericsson has agreed to pay over $1 billion in an agreement with the United States Department of Justice to settle an investigation into allegations of paying bribes to boost its business in Djibouti, China, Vietnam, Indonesia and Kuwait.
A Justice Department statement said on Friday that after negotiations, the company agreed to pay a criminal penalty of $458 million and interests of around $81.5 million to end a probe into the possible violations of the Foreign Corrupt Practices Act.
As part of the agreement, the company would pay the fines to the Security and Exchange Commission to settle complaints related to bribery and accounting practices.
An Egyptian subsidiary of Ericsson on Friday also pleaded guilty of a charge of conspiring to violate the anti-bribery provisions of the FCPA in a federal court in the Southern District of New York, according to the statement.
“Today, Swedish telecom giant Ericsson has admitted to a years-long campaign of corruption in five countries to solidify its grip on telecommunications business,” US Attorney (public prosecutor) Geoffrey S Berman said in the statement.
“Through slush funds, bribes, gifts, and graft, Ericsson conducted telecom business with the guiding principle that ‘money talks.’ Today’s guilty plea and surrender of over a billion dollars in combined penalties should communicate clearly to all corporate actors that doing business this way will not be tolerated,” he added.
The official statement also said that Ericsson had admitted to paying bribes, falsifying books and records and to failing to “implement reasonable internal accounting controls.”
“Ericsson’s corrupt conduct involved high-level executives and spanned 17 years and at least five countries, all in a misguided effort to increase profits,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department.
“Such wrongdoing called for a strong response from law enforcement, and through a tenacious effort… today’s action not only holds Ericsson accountable for these schemes but should deter other companies from engaging in similar criminal conduct.”
As part of the agreement, the company has agreed to keep cooperating with the DOJ in any further investigation in the case.
The settlement is believed to be the highest ever under the FCPA.
“As part of the settlement, Ericsson has agreed to engage an independent compliance monitor for three years while the company continues to undertake significant reforms to strengthen its ethics and compliance program,” the Swedish firm said in a statement.