On April 30, a DOJ deferred prosecution agreement and SEC settlement with Japan-based Panasonic Corporation and a subsidiary were announced, with Panasonic agreeing to pay $280 million in total. The resolutions related to Panasonic’s U.S.-based subsidiary, Panasonic Avionics Corporation (PAC), and allegations that senior management of PAC orchestrated a bribery scheme to help secure over $700 million in business from a state-owned airline, in which PAC paid a Middle East government official nearly $900,000 for a “purported consulting position, which required little to no work,” and concealed the payment “through a third-party vendor that provided unrelated services to PAC.” PAC is then alleged to have falsely recorded the payments in its books and records, as well as similar payments made to other purported consultants and sales agents in Asia.
Under the DPA with PAC, PAC agreed to pay the DOJ a $137.4 million criminal penalty for knowing and willful violations of the FCPA’s accounting provisions. The DOJ gave PAC a 20 percent discount off the low end of the U.S. Sentencing Guidelines fine range because of its cooperation and remediation, which, although untimely in certain respects, did include causing several senior executives who were either involved in or aware of the misconduct to be separated from PAC or Panasonic.” However, because many of PAC’s remediation efforts were “more recent, and therefore have not been tested,” the deferred prosecution agreement subjects the company to two years of scrutiny by an independent compliance monitor, followed by a year of self-reporting. The SEC‘s simultaneous settlement included violations of the anti-bribery as well as accounting provisions, and the payment of $143 million to the SEC.
As FCPA Scorecard previously reported, Panasonic disclosed the investigations in February 2017, though they were first reported as early as 2013.