Former SAP Executive Pleads Guilty To Violating FCPA by Paying Bribes in Panama

A former SAP International Inc. regional director has pleaded guilty to violating the Foreign Corrupt Practices Act (FCPA) by paying bribes to Panamanian officials in order to obtain government technology contracts for SAP.

Vicente Eduardo Garcia, 65, of Miami, pleaded guilty to conspiracy to violate the FCPA’s anti-bribery provisions in a U.S. District Court in northern California. In addition, Garcia settled an SEC enforcement action charging him with orchestrating a bribery scheme.

The Justice Department said that in 2009, SAP sought to provide a technology upgrade product to a state agency in Panama worth millions of dollars. To secure the contract, the DOJ said, Garcia conspired with others to pay $145,000 in bribes to two Panamanian government officials and an agent of a third official.

The DOJ said that Garcia and his conspirators falsified invoices and contracts to disguise the bribes, and admitted his belief that paying the bribes was necessary to secure the contracts. SAP’s Panama channel partner won the government contract worth $14.5 million, which included $2.1 million for SAP software licenses. The Panamanian government then awarded SAP’s channel partner additional contracts that included fees for SAP products worth another $1.2 million.

In addition, Garcia admitted to selling SAP software to a Panamanian partner at up to an 82% discount in order to create a slush fund to pay the bribes. He also received kickbacks from the slush fund, according to the SEC, which settled with Garcia via an administrative action.

The SEC also said that Garcia circumvented SAP’s internal controls by submitting falsified approval forms to SAP regarding the 82% discount.

The SEC’s order found Garcia violated the anti-bribery and internal controls provisions of the Securities Exchange Act of 1934. Garcia has agreed to pay $85,965 in disgorgement for the kickbacks he received as well as prejudgment interest of $6,430.

The Cogdell Law Firm is a full service criminal litigation and appellate law firm. We provide client-focused representation at all stages of the process, whether our clients are seeking to avoid charges, have been charged, or are seeking reversal of a conviction on appeal. When results matter most, contact Dan Cogdell at (713) 426-2244 or dan@cogdell-law.com.

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