PALO ALTO (dpa-AFX) - A U.S. District Judge on Thursday fined technology giant Hewlett-Packard Co. (HPQ) and its subsidiaries in Russian, Poland and Mexico a total sum of $108 million after it pleaded guilty to charges of bribing government officials in Russia, Poland and Mexico to secure large technology contracts.
HP agreed to pay $108 million in criminal and regulatory penalties to the Department of Justice and the U.S. Securities and Exchange Commission. The investigations were conducted by the DoJ, the IRS, international law enforcement partners, and the FBI.
HP's Russian subsidiary, ZAO Hewlett-Packard A.O., has been fined $58.8 million for charges of bribing Russian government officials to secure large contracts from the Russian Prosecutor General's office. This settlement is part of a larger agreement reached in April with other HP subsidiaries in Poland and Mexico.
The company's Polish subsidiary, Hewlett-Packard Polska, Sp. Z o.o., and Mexican subsidiary, Hewlett-Packard Mexico, S. de R.L. de C.V., have also been charged for bribery. HP Poland bribed government officials to secure contracts with Poland's national police agency, while HP Mexico bribed the officials to secure contracts with Mexico's state-owned petroleum company.
HP's subsidiary, HP Russia, has pleaded guilty of the charges of violating anti-bribery and accounting provisions of the Foreign Corrupt Practices Act, and was sentenced for bribery.
According to the proposed final judgment filed by the SEC on April 9, the three HP subsidiaries will pay a total of $76.8 million in criminal penalties and forfeiture. Meanwhile, HP has already paid another $31.5 million in disgorgement, prejudgment interest and civil penalties.
U.S. District Judge D. Lowell Jensen of the Northern District of California announced the final judgment after HP Russia pleaded guilty earlier in the Morning. HP Russia executives are charged of creating a multi-million dollar secret slush fund, at least part of which was used to bribe Russian government officials who awarded the company a contract valued at more than 35 million euros.
'In a brazen violation of the FCPA, Hewlett Packard's Russia subsidiary used millions of dollars in bribes from a secret slush fund to secure a lucrative government contract. Even more troubling was that the government contract up for sale was with Russia's top prosecutor's office,' said Principal Deputy Assistant Attorney General Miller.
The proceeds from the slush fund were spent on travel services, luxury automobiles, expensive jewelry, clothing, furniture and various other items, according to the statement of facts filed with the plea agreement.
'The Criminal Division has been at the forefront of this fight because when corruption takes hold overseas, American companies and the rule of law are harmed. Today's conviction and sentencing are important steps in our ongoing efforts to hold accountable those who corrupt the international marketplace,' Miller added.
HPQ closed Thursday's regular trading sessions at $36.76, down $0.27 or 0.73% on a volume of 8.04 million shares.
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