According to a Securities and Exchange Commission press release, a former executive at the worldwide software manufacturer SAP has agreed to settle charges that he violated the Foreign Corrupt Practices Act (FCPA) by bribing Panamanian government officials through an intermediary to procure software license sales.
Vicente E. Garcia crafted a scheme that lasted from 2009 to 2013, wherein Garcia paid $145,000 in bribes to a Panamanian government official and made promises to pay two other Panamanian government officials. The payments and promises were in exchange for four SAP software contracts to the Panamanian government. During the time of the scheme, slush funds were created not only to pay the officials, but were also used as kickbacks to Garcia himself.
SAP is headquartered in Germany with 272 subsidiaries servicing over 263,000 customers in 188 countries. Garcia sidestepped SAP internal controls by turning in false approval forms with excessive discounts to a Panamanian local agent. Garcia also used his company and personal email accounts to outline the particulars of the amounts going to the government officials.
According to the SEC order, Garcia violated the anti-bribery and internal controls provisions of the Securities Exchange Act of 1934. Garcia consented to the entry of the cease-and-desist order and agreed to pay disgorgement of $85,965, which is the total amount of kickbacks he received, plus prejudgment interest of $6,430 for a total of $92,395.
In the criminal information filed by the Department of Justice, Garcia was charged with conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act. Garcia has pled guilty and is awaiting sentencing in December of this year.
Kamal Hubbard is a lawyer by training who is certified in Fraud Examination, Cybersecurity, and Decentralized Finance.