Embraer has to pay $205 Million to resolve alleged violations of Foreign Corrupt Practices Act, according to a global settlement announced today by US Securities and Exchange Commission (SEC).
SEC, an agency of US federal government, announced today along with US department of Jstice and Brazilian authorities.
The SEC’s complaint alleges that Embraer made more than $83 million in profits as a result of bribe payments from its US based subsidiary through third-party agents to foreign government officials in the Dominican Republic, Saudi Arabia, and Mozambique.
Also Embraer allegedly created false books and records to conceal the illicit payments, and also engaged in an alleged accounting scheme in India.
The SEC’s complaint also states that $3.52 million in bribes were paid to an official in the Dominican Republic’s air force to secure a military aircraft contract in that country, and $1.65 million in bribes were routed to an official in Saudi Arabia to win business there.
An alleged $800,000 payment was made at the behest of a Mozambican government official as a condition of obtaining a contract with a state-owned airline in that country.
Approximately $5.76 million was allegedly paid to an agent in India in connection with the sale of three highly specialized military aircraft for India’s air force, and the payments were falsely recorded in Embraer’s books and records as part of a consulting agreement that wasn’t legitimate.
“As alleged in our complaint, Embraer realized significant revenues by surreptitiously using third parties to mask bribes paid to government officials with influence over contracts it was competing to win,” said Andrew J. Ceresney, Director of the SEC Enforcement Division.
“Embraer’s alleged misconduct spanned multiple continents, and it has taken significant ongoing coordination among international regulators and law enforcement agencies to uncover the company’s complex bribery schemes.” Kara N. Brockmeyer, Chief of the SEC Enforcement Division’s FCPA Unit, added.
Under the settlement, Embraer must pay a $107 million penalty to the Justice Department as part of a deferred prosecution agreement, and more than $98 million in disgorgement and interest to the SEC.
Embraer may receive up to a $20 million credit depending on the amount of disgorgement it will pay to Brazilian authorities in a parallel civil proceeding in Brazil. Embraer must retain an independent corporate monitor for at least three years.
The Indian Central Bureau of Investigation (CBI) has filed a charge sheet against a UK based arms dealer for allegedly taking kickbacks worth over US $5.7 million from the Brazilian Embraer in Indias 2008 three aircraft deal
India's Defence Research and Development Organization (DRDO) has fitted its own airborne early warning and control system (AEW & CS) on a modified Embraer ERJ 145 aircraft slated to be inducted into the Indian Air Force in two months. The AEW & CS is basically‘sharp-seeing and listening radar that can look out deep across enemy territory for any incoming threat without itself crossing over
The Indian Defense Ministry has asked the Central Bureau of Investigation (CBI) to probe in $208 million Embraer aircraft deal after allegations of payment of kickbacks to secure the airborne early warning and control systems (AEW&C) contract. Defense Mininster Manohar Parrikar earlier this week had said, “CBI will be asked to probe if there is a criminal angle as the Ministry cannot
The Indian defense ministry might recommend a Central Bureau of Investigation (CBI) probe in the Embraer aircraft deal if there is criminality involved. Indias Defense Research and Development Organization (DRDO) wrote to the Brazillian company seeking details of the deal involving three EMB 145 aircraft following media reports of an international investigation into the alleged payment of bribes to secure an aircraft deal in 2008
Embraer has admitted in paying $5.76 Million after it entered into an agreement with an agency in Indias 2008 three modified Airborne Early Warning & Control (AEW&C) aircraft deal
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