Control Components Pleads Guilty to FCPA and Travel Act Violations

06 August 2009 Publication

On July 31, 2009, the DOJ announced that Control Components Inc. (CCI), a California-based company, pled guilty to certain violations of the FCPA and the Travel Act. CCI is a wholly owned subsidiary of IMI plc, organized under the laws of England and Wales, and designs and manufactures service control valves for use in various industries including, nuclear, oil and gas, and power generation. The charges related to a decade-long scheme of paying bribes to foreign officials and employees of various state-owned companies (in addition to foreign and domestic private companies), and spread across approximately 36 countries.

According to the plea agreement, from 1998 to 2007, CCI violated the FCPA and Travel Act by making corrupt payments to numerous officers and employees of state-owned and private businesses around the world for the purposes of obtaining or retaining business. Specifically, between 2003 and 2007, CCI paid approximately $4.9 million in bribes in violation of the FCPA, and $1.95 million in bribes in violation of the Travel Act, in countries including China, Korea, Malaysia, and the United Arab Emirates. In total, CCI admitted that from 2003 through 2007, it made approximately 236 corrupt payments in more than 30 countries, resulting in net profits to the company of approximately $46.5 million from sales related to the corrupt payments.

In January 2009, two former executives of CCI pled guilty to conspiring to bribe officers and employees of foreign state-owned companies on behalf of CCI. Similarly, in April 2009, six former CCI executives were indicted for violations of the FCPA, the Travel Act and other statutes. These former executives included CCI’s former CEO. The trial is currently scheduled to begin December 8, 2009.

Under the agreement, CCI agreed to pay a criminal fine of $18.2 million and was placed on organizational probation for three years. In addition, CCI agreed to create and implement an anti-bribery compliance program, to retain an independent compliance monitor for three years, and to continue to cooperate with the DOJ in its ongoing investigation.

Copies of the plea agreement, criminal information, and DOJ press release are attached.

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