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WASHINGTON—An Oklahoma-based aircraft maintenance company has agreed to pay nearly $12 million in fines for bribing Latin American government officials to secure maintenance contracts, according to a statement released last week by the U.S. Department of Justice.
BizJet International Sales & Support Inc., based in Tulsa, Okla., will pay $11.8 million in criminal penalties for violating the U.S. Foreign Corrupt Practices Act. The department noted that BizJet's fine could have been more than double the agreed-upon amount had the company not voluntarily reported the bribes and stepped up its compliance efforts after the discovery.
For in-depth coverage of this topic and related issues, visit the Business Insurance Solution Arc on A World of Risk: Managing Foreign Bribery and Corruption Exposures.
According to court documents, BizJet executives paid approximately $386,000 in cash and gifts between 2004 and 2010 to high-ranking officials of the Mexican Federal Police, the Mexican Presidential Fleet and the Panama Aviation Authority in exchange for maintenance contracts with those agencies.
The payments were made either directly to officials working for the agencies or funneling payments through a nonexistent company run by a BizJet sales manager, the Justice Department said in the statement released last week.
Under the terms of a three-year deferred settlement agreement filed in U.S. District Court for the Northern District of Oklahoma on Wednesday, BizJet admitted responsibility for the violations, and agreed to cooperate with any ongoing or future DOJ investigations and periodically report to the department regarding its compliance efforts. The charge against BizJet could be dismissed at the end of the three-year term if the department is satisfied with the company's performance, court documents said.
The DOJ also agreed to forgo prosecution of BizJet's indirect parent company, Hamburg, Germany-based Lufthansa Technik A.G., in exchange for the company's promise to cooperate with future investigations and implement strict internal controls.
In court documents, the DOJ commended BizJet and Lufthansa for their “extraordinary cooperation,” including their internal investigations and voluntary disclosure of the FCPA violations. The department said the company’s cooperation was a primary consideration in reducing BizJet’s fine for the violations, which carry a potential penalty of more than $34 million.
The department also highlighted the companies’ efforts to enhance its FCPA compliance after it discovered the bribes, including BizJet’s firing of the executives responsible for the malfeasance, enhanced due diligence for third-party business partners, and closer review of proposals and other transactional documents.
“BizJet and the department agree that ($11.8 million) is appropriate given the facts and circumstances of this case, including BizJet’s voluntary disclosure, extraordinary cooperation and extensive remediation in this matter,” the agreement said.