On July 31, 2009, Control Components Inc. (“CCI”), a California-based control valve manufacturer for the nuclear, oil and gas, and power generation industries, pleaded guilty to a three-count criminal information charging it with conspiring to violate the FCPA and the Travel Act and substantive violations of the FCPA.38 The charges were related to a decade-long scheme to pay bribes to officials of foreign stateowned companies and to officers and employees of foreign and domestic private companies, to secure contracts in approximately 36 different countries. CCI agreed to pay an $18.2 million criminal fine, serve a three-year term of organizational probation, implement a comprehensive compliance program, retain an independent compliance monitor for a three-year period, and fully cooperate with the Department’s ongoing investigation of the matter.39 According to the information and plea agreement, from 1998 to 2007, CCI made corrupt payments to state-owned customers, including, among others, Jiangsu Nuclear Power Corporation (China), Guohua Electric Power (China), China Petroleum Materials and Equipment Corporation, PetroChina, Dongfang Electric Corporation (China), China National Offshore Oil Company (“CNOOC”),40 Korea Hydro and Nuclear Power, Petronas (Malaysia) and the National Petroleum Construction Company (United Arab Emirates), as well as to private customers, in order to obtain or to retain business. From 2003 to 2007, CCI made approximately 236 corrupt payments to state-owned and private customers, deriving approximately $46.5 million in net profits.
Specifically, CCI made approximately $4.9 million in corrupt payments to state-owned customers, deriving approximately $31.7 million in net profits, and approximately $1.95 million in corrupt payments to private customers,41 resulting in approximately $14.82 in net profits.42 Former CCI executives Mario Covino and Richard Morlok, had previously pleaded guilty in January and February 2009 to conspiring to pay at least $1 million in bribes to employees of foreign state-owned customers in exchange for lucrative contracts.43 Six other former CCI executives – Stuart Carson, Hong (Rose) Carson, Paul Cosgrove, David Edmonds, Flavio Ricotti and Han Yong Kim – were charged in a sixteen-count indictment in April with violations of the FCPA, Travel Act and other statutes in connection with these payments.44 Their trial is currently scheduled for December 2009.
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