The SEC notched another FCPA settlement, continuing its steady pursuit and resolution of FCPA cases. In the meantime, the Justice Department has been silent in the FCPA enforcement arena. In this episode of Corruption, Crime, and Compliance, Michael Volkov dives into the SEC’s recent FCPA settlement with Moog, a global manufacturer that faced severe bribery allegations within its Indian subsidiary. From navigating India's complex tender processes to revealing corrupt practices and hefty penalties, Michael dissects Moog's compliance failures and highlights the critical role of ethics in international business dealings.
Listen in as he discusses:
- Moog, Inc. ("Moog"), a New York-based global manufacturer of motion controls systems for aerospace, defense, industrial, and medical markets, agreed to pay a civil penalty of $1.1 million and disgorge nearly $600,000 for a total of $1.7 million, to resolve FCPA charges arising out of bribes paid by its wholly owned Indian subsidiary, Moog Motion Controls Private Limited (Moog Motion Controls).
- Moog India allegedly bribed officials from the South Central Railway (SCR) and Hindustan Aeronautics Limited (HAL) to influence tender processes and exclude competitors. These bribes were often disguised as “contractor services.”
- From 2020 to 2022, Moog employees bribed various Indian officials to win business. Also, they used a variety of schemes to make improper payments, including funneling them through third-party agents and distributors. These same Moog employees also offered cash bribes to Indian officials in an attempt to cause public tenders in India to favor Moog’s products and exclude competitors.
- The case highlights significant gaps in Moog’s internal controls, including improper invoice recording, inadequate oversight of third-party agents, and a lack of compliance training.
- Moog self-reported the misconduct, terminated those involved, enhanced its compliance program, and strengthened accounting controls and auditing procedures for third-party interactions.
Resources
Michael Volkov on LinkedIn | X (Twitter)
The Volkov Law Group
