In May 2009, the Securities and Exchange Commission ("SEC") announced the filing of a settled FCPA enforcement action against Thomas Wurzel, the former President of ACL Technologies, Inc. ("ACL"), a former indirect wholly owned subsidiary of defense company United Industrial Corporation ("UIC"). The SEC alleged that Wurzel authorized payments to an Egyptian agent while knowing or consciously disregarding the high probability that the agent would offer, provide or promise at least a portion of such payments to Egyptian Air Force ("EAF") officials for the purpose of awarding business to ACL and UIC.
The SEC alleged that between 2001 and 2002 Wurzel authorized multiple payments to the agent (a retired EAF general) in connection with a military airport depot ACL was building for the EAF. As detailed in the complaint, ACL was awarded the depot project as part of the U.S. Department of Defense's foreign military sale program, in which contracts are generally between a foreign government and the U.S. government for weapons or other defense items. According to the complaint, even though ACL did not have a formal contractual relationship with the EAF, the EAF submitted a "sole source" request for ACL's services and otherwise directed how money would be spent on the project.
As alleged in the complaint, which details numerous e-mail exchanges between Wurzel and the agent, Wurzel authorized payments to the agent while knowing or consciously disregarding the high probability that the agent would offer, provide or promise at least a portion of the payments to EAF officials for the purpose of influencing the officials to direct business to UIC through ACL and to continue to do business with the company. The SEC found that the payments to the agent resulted in ACL being awarded a contract with gross revenues of $5.3 million and net profit of approximately $270,000.
Based on the above conduct, the SEC charged Wurzel with violations of the FCPA's antibribery, books and records and internal control provisions and with aiding and abetting UIC's violations of the same provisions. Without admitting or denying the allegations in the complaint, Wurzel consented to entry of a final judgment in which he agreed to pay a $35,000 civil penalty and be permanently enjoined from future violations.