HP Subsidiaries Admit Bribery in Russia, Poland and Mexico

Hewlett-Packard’s Russian subsidiary agreed to plead guilty to bribing Russian government officials to secure a large technology contract with the Prosecutor General’s office for the Russian Federation, U.S. prosecutors said Wednesday.

HP Russia joins two other subsidiaries in a deal that will cost the technology company $108 million in civil and criminal fines and penalties.

In addition to the Russian deal, HP subsidiaries in Poland and Mexico entered non-prosecution agreements to resolve misconduct claims in the Foreign Corrupt Practices Act probe.  Those cases relate to contracts with Poland’s national police agency and Mexico’s state-owned petroleum company, according to a prepared statement by San Francisco U.S. Attorney Melinda Haag.

The three HP subsidiaries will pay $76.8 million in criminal penalties and forfeiture, according to Haag.

ZAO Hewlett-Packard of Russia, was accused in federal court in San Francisco of conspiracy to violate anti-bribery and accounting provisions of the FCPA.

Under the plea agreement the U.S. agrees to defer prosecution but filed a criminal information charging Hewlett-Packard Polska, with violation of accounting provisions of the FCPA.  Hewlet-Packard Mexico entered a similar agreement and agreed to forfeit proceeds from the sales.

“Hewlett-Packard subsidiaries created a slush fund for bribe payments, set up an intricate web of shell companies and bank accounts to launder money, employed two sets of books to track bribe recipients, and used anonymous email accounts and prepaid mobile telephones to arrange covert meetings to hand over backs of cash,” said Deputy Attorney General Bruce Swartz, in a prepared statement.

In addition, the U.S. Securities and Exchange Commission has proposed a final judgment in a civil action to which HP consented, agreeing to disgorge $31.5 million in interest and civil penalties.

Case:  US v. ZAO Hewlett-Packard, No. 14-201

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