Swedish telecommunications giant Ericsson (NASDAQ: ERIC) agreed to pay a $206-million penalty and pleaded guilty to violating the anti-bribery provisions of the Foreign Corrupt Practices Act, U.S. prosecutors announced Thursday evening.
Ericsson had already paid a $520.6 million penalty in 2019 over what New York federal prosecutors said was a “yearslong campaign of corruption,” involving the bribery of government officials and the falsification of books and records in Djibouti, China, Vietnam, Indonesia and Kuwait. Additionally, the company paid about $540 million to the Securities and Exchange Commission.
As a result of the 2019 settlement, the company entered into a deferred prosecution agreement (DPA) with the U.S. Attorney’s Office for the Southern District of New York. But the Department of Justice said Ericsson violated the agreement by failing to truthfully disclose “all factual information and evidence” involving the company’s schemes in Djibouti and China. The company also allegedly failed to disclose possible evidence of a similar scheme in Iraq.
Ericsson used outside consultants to pay bribes to government officials and manage off-the-books “slush funds” in all five countries, prosecutors said, using “sham contracts” and “false invoices” to obscure the nature of the funds, according to that deferred prosecution agreement.
The U.S. Department of Justice said Ericsson employees in China caused “tens of millions of dollars” to be paid out to agents and consultants, “at least a portion of which was used to provide things of value, including leisure travel and entertainment, to foreign officials,” including at a state-owned telecommunications company.
ERIC shares gained 20 cents, or 3.5%, to $5.71
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