Swedish telecommunications company Ericsson agreed to pay nearly $207 million following two breaches of its 2019 deferred prosecution agreement (DPA) with U.S. authorities.
Ericsson breached its DPA by continuing the corrupt practices of “paying bribes, falsifying books and records, and failing to implement reasonable internal accounting controls in multiple countries,” the Department of Justice (DOJ) announced Thursday.
Ericsson was originally investigated by the DOJ for engaging in bribery and other violations of the Foreign Corrupt Practices Act (FCPA) between 2000 and 2016. The agency found high-level personnel were involved in the misconduct, which took place in China, Indonesia, Kuwait, and Vietnam.
A similar investigation by the Securities and Exchange Commission (SEC) found corrupt activities by Ericsson in Saudi Arabia.
In 2019, Ericsson agreed to pay $1 billion as part of a resolution with the DOJ and SEC requiring it to halt corruption and hire an outside compliance monitor. An Ericsson subsidiary, Ericsson Egypt, pleaded guilty to conspiracy to violate the anti-bribery provisions of the FCPA.
In 2021, the DOJ found Ericsson violated its DPA by not providing essential documents and facts regarding the case. In February 2022, Ericsson confirmed it uncovered evidence of “corruption-related misconduct” that occurred in its Iraq operations between 2011 and 2019. The DOJ determined in March 2022 the company’s disclosure was “insufficient” and it breached the DPA a second time.
The company pleaded guilty Thursday to one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of conspiracy to violate the internal controls and books and records provisions of the FCPA. The violations prevented the DOJ from bringing charges against certain individuals, according to the agency.
Ericsson will pay a penalty of $206,728,848 and be on probation through June 2024, the DOJ said. The company announced in December the term of its outside compliance monitor was extended an additional year, until June 2024.
Instead of honoring the DPA, Ericsson “repeatedly failed to fully cooperate and failed to disclose evidence and allegations of misconduct,” said Assistant Attorney General Kenneth Polite Jr. in the DOJ’s press release. “… Companies should be on notice that we will closely scrutinize their compliance with all terms of corporate resolution agreements and that there will be serious consequences for those that fail to honor their commitments.”
Ericsson response: “Since the start of the DPA, the DOJ has not alleged or charged Ericsson with any new criminal misconduct, and no new illegal conduct has been alleged or charged today,” said the company in a press release.
“Taking this step today means that the matter of the breaches is now resolved,” said Ericsson Chief Executive Börje Ekholm.
Editor’s note: This story was updated March 6 to remove incorrect language regarding a third breach of Ericsson’s DPA.
No comments yet