Skip to content

Compliance Building

Doug Cornelius on compliance for private equity real estate

Menu
  • Home
  • About
    • About
    • About Doug
    • About This Website
    • Why I Blog
    • Speaking Engagements
    • Contact
    • Publications
  • Archives
    • Topic Archive
    • Book Reviews
    • Most Popular
  • Subscribe
  • Disclaimers
    • Disclaimers
    • Policies and Procedures
    • Use of Site Content
    • Comments
    • FTC Disclosure
Menu

Control Components Inc. and the FCPA

Posted on August 14, 2009August 11, 2009 by Doug Cornelius
Print Friendly, PDF & Email

valve

Control Components Inc. pleaded guilty to violating the anti-bribery provisions of the Foreign Corrupt Practices Act and the Travel Act, admitting to bribing foreign officials in a decade-long scheme.

As part of the plea agreement, Control Components agreed to pay a criminal fine of $18.2 million; create, implement and maintain a comprehensive anti-bribery compliance program; retain an independent compliance monitor for a three-year period to review the design and implementation of Control Components’ anti-bribery compliance program and to make periodic reports to CCI and the Department of Justice; serve a three-year term of organizational probation; and continue to cooperate with the Department of Justice in its ongoing investigation.

A few months ago, two former executives of Control Components pleaded guilty to conspiring to bribe officers and employees of foreign state-owned companies on behalf of the company. Mario Covino was CCI’s former director of worldwide factory sales. He pleaded guilty to one count of conspiracy to violate the FCPA and admitted to causing the payment of $1 million in bribes to officers and employees of several foreign state-owned companies. Richard Morlok was CCI’s former finance director. He pleaded guilty to one count of conspiracy to violate the FCPA and admitted to causing the payment of $628,000 in bribes to officers and employees of several foreign state-owned companies.

These days, another FCPA case seems to be fairly routine. There are two aspects of this case that are worth noting.

First, the payments were made to officers of state-owned companies, not to government bureaucrats. This is the peril of working with state-owned enterprises. As far as the FCPA and the DOJ are concerned, there is no difference.

The second item to note is that the DOJ included not only the suitcases of cash, but also included vacations to Disneyland, Las Vegas and Hawaii. The Information also included lavish sales events to entertain current and potential customers.

When dealing with customers and hosting sales events, it is important to identify who may be a government official for purposes of the Foreign Corrupt Practices Act.

References:

  • FCPA Enforcement … It’s More Than Just Suitcases Full of Cash to Government Officials by FCPA Professor
  • Guilty Plea by Control Components by The FCPA Blog
  • Criminal information against Control Components hosted on JD Supra
  • Plea Agreement with Control Components hosted on JD Supra
  • Indictment of Former Executives of Control Components hosted on JD Supra
  • Plea Agreement with Mario Covino hosted on JD Supra
  • Plea Agreement with Richard Morlok hosted on JD Supra

Share this:

  • Print (Opens in new window) Print
  • Share on Facebook (Opens in new window) Facebook
  • Share on LinkedIn (Opens in new window) LinkedIn
  • Share on X (Opens in new window) X
  • Email a link to a friend (Opens in new window) Email

Leave a ReplyCancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Search for Stuff

Recent Stories

  • California’s Fair Investment Practices by Venture Capital Companies
  • Compliance Bricks and Mortar for January 30
  • Interpreter Insider Trading
  • Things not to put in Advisory Contracts – Hedges
  • Weekend Reading: Bad Company
  • Things to Not Put in an Advisory Agreement – Assignment Rights
  • Congressional Stock Trading and Private Insider Trading
  • Model Fees Versus Actual Fees in Marketing
  • Compliance Bricks and Mortar for January 16
  • Staff Report on Capital-Raising Dynamics

Fight Cancer

Please support my Pan-Mass Challenge
Make a donation to fight cancer. donate.pmc.org/DC0176
pan-mass challenge badge

I am a lawyer, but I am not your lawyer. Since I’m a lawyer, this website may be considered attorney advertising under the ethical rules of certain jurisdictions. Please read my disclaimers page before taking any action. And then, don't take any action based on what I wrote.

Creative Commons logo with the text 'Some Rights Reserved' and three symbols representing attribution, non-commercial use, and share alike.

Compliance Building - by Doug Cornelius is licensed under a Creative Commons Attribution-Noncommercial 3.0 United States License.