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Breached Plea Deal Costs Telecom Another $200m

Four years after it agreed to pay more than $1 billion to resolve a criminal foreign-bribery case, Stockholm-based Ericsson AB has reached a new agreement with the U.S. Justice Department to pay another $206.7 million for breaching the original deferred prosecution deal, the Wall Street Journal reports. The telecommunications company will plead guilty to the original charges for failing to fully disclose information related to schemes in Djibouti and China, the DOJ said. Ericsson also failed to report evidence related to activities in Iraq that might constitute a violation of the Foreign Corrupt Practices Act, the department said. The failures prevented the Justice Department from bringing charges against certain individuals, it said.

The original case stemmed from a U.S. investigation into a bribery scheme that ran from 2000 to 2016 and involved the company’s operations in Djibouti, China, Vietnam, Kuwait and Indonesia. The company entered into a deferred-prosecution agreement with prosecutors requiring it to retain a compliance monitor for three years and to cooperate in related probes. In a deferred prosecution agreement, prosecutors charge a company but agree that they will drop those charges after a period of time if the company abides by certain conditions. The Justice Department can effectively rip up a DPA and go ahead with the prosecution if it finds the company has broken its promises, though that power is seldom exercised. “Ericsson engaged in significant FCPA violations and made an agreement with the Department of Justice to clean up its act,” said Damian Williams, U.S. attorney for the Southern District of New York. “The company’s breach of its obligations under the DPA indicate that Ericsson did not learn its lesson, and it is now facing a steep price for its continued missteps.”


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