The corruption cases databases are a product of the staff of the International Bank for Reconstruction and Development / The World Bank. It is intended for general information purposes only. The findings, interpretations, and conclusions expressed in the Database do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. Neither the World Bank Group nor its officers or employees shall be liable for any losses that may result directly or indirectly from the use of or reliance upon such information.
Falsification of Books and Records, Internal Controls Violations
No admission or denial of alleged offenses
According to the US Securities and Exchange Commission, the software manufacturer company "SAP’s deficient internal controls allowed a former SAP executive to pay $145,000 in bribes to a senior Panamanian government official and offer bribes to two others in exchange for lucrative sales contracts. The SEC charged the SAP executive, Vicente E. Garcia, in a separate enforcement action last year that included a parallel criminal action. Garcia has been sentenced to 22 months in prison.
According to the SEC’s order instituting a settled administrative proceeding:
SAP is headquartered in Germany and executes most of its sales through a network of worldwide corporate partners, including a partner in Panama.
The bribery scheme involved providing large discounts of up to 82 percent to SAP’s Panamanian partner, who used the excessive discounts to create a slush fund out of which to pay bribes to Panamanian officials on Garcia’s behalf so SAP could sell software.
SAP had no requirements for heightened anti-corruption scrutiny for such large discounts.
SAP falsely recorded the slush fund as legitimate discounts on the books of SAP’s Mexican subsidiary, and the figures were subsequently consolidated into SAP’s financial statements.
SAP failed to devise and maintain a sufficient system of internal accounting controls to provide reasonable assurances that the discounts were recorded in accordance with U.S. Generally Accepted Accounting Principles." (Source: US SEC Press Release, "SEC Charges Software Company With FCPA Violations," February 1, 2016.)
US SEC Press Release, "SEC Charges Software Company With FCPA Violations," February 1, 2016, at https://www.sec.gov/news/pressrelease/2016-17.html
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