FCPA Scorecard Blog
Filter
Subscribe to our FinCrimes Update for news about the Foreign Corrupt Practices Act and related prosecutions and enforcement actions.
Analogic Corp. and Danish Subsidiary BK Medical Settle FCPA Charges with the SEC and DOJ
On June 21, the SEC and DOJ announced a nearly $15 million settlement with Massachusetts-based imaging company Analogic Corp. and its wholly-owned Danish subsidiary, BK Medical ApS, to resolve parallel civil and criminal actions involving FCPA violations. The SEC alleged that, from at least 2001 through early 2011, BK Medical ApS paid about $20 million to third parties in hundreds of sham transactions with distributors in Russia and shell companies in Belize, the British Virgin Islands, Cyprus, and Seychelles. The sham transactions involved fictitious inflated invoices to the distributors with the over-payments going to third parties identified by the distributors. BK Medical did not have a relationship with the third parties and did not know if the payments had any business purpose for the distributors. The settlement is consistent with the settlement offer that Analogic disclosed last December, and it reflects Analogic's agreement to pay $7.67 million in disgorgement and $3.8 million in prejudgment interest to resolve the SEC's books and records and internal controls charges, and BK Medical's agreement to pay $3.4 million in criminal fines in a non-prosecution agreement with the DOJ. BK Medical's former CFO also settled with the SEC, agreeing to pay a $20,000 penalty to settle allegations that he knowingly circumvented internal controls and falsified BK Medical's books and records.
Analogic Corp., Massachusetts-Based Imaging Company, Discloses Settlement Offer to End FCPA Investigations
In a quarterly securities filing made on December 9, Analogic Corp. (Analogic), a Massachusetts-based manufacturer of airport security equipment, disclosed that the SEC and DOJ have made separate proposals to end their FCPA investigations into the company (see pages 26-27) that would include payments totaling approximately $15 million. The company had previously announced in a September 2015 press release that it had offered the SEC $1.6 million to settle the SEC's FCPA investigation of the company. Analogic's 10-Q disclosed that the SEC rejected that offer. The company stated that it remains in discussion with the SEC and DOJ about settlement and is also discussing a settlement with the Danish government concerning a resolution of these matters. As described in a prior FCPA Scorecard post, Analogic previously reported that the DOJ and SEC had "substantially" completed their investigations of potential bribery involving transactions by the company's Danish subsidiary, BK Medical ApS. The transactions at issue involved distributors paying BK Medical more than was owed, and BK Medical then allegedly transferring the excess money to third parties identified by the distributors. At the time of its 2011 disclosure of the potentially problematic transactions, the company stated that it had not ascertained the ultimate beneficiaries or purpose of the transfers.
Imaging Company Offers $1.6 Million to Settle SEC FCPA Investigation
Analogic Corp., a manufacturer of airport security equipment, offered the SEC $1.6 million to settle the agency's FCPA investigation of the company, according to a company press release. The company previously reported that the DOJ and SEC had "substantially" completed their investigations of potential bribery involving transactions by the company's Danish subsidiary, BK Medical ApS. The transactions at issue involved distributors paying BK Medical more than was owed, and then BK Medical transferring the excess money to third parties identified by the distributors. At the time of its 2011 disclosure of the potentially problematic transactions, the company stated that it had not ascertained the ultimate beneficiaries or purpose of the transfers. According to the company it had not yet engaged in similar settlement discussions with the DOJ or Danish government.