HP accused of bribing Russian officials
Posted by: Timothy Weaver on 09/12/2014 07:11 PM
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Trying to win a contract with the Office of the Prosecutor General of the Russian Federation, a subsidiary of Hewlett-Packard has admitted violating the U.S. Foreign Corrupt Practices Act by bribing Russian officials.
ZOA Hewlett-Packard, the company’s Russian unit, was found to have paid millions of dollars from a secret fund to bride Russian government officials. Trying to pursue a contract, they have been accused of paying an initial amount of $30mil and a total at $100 million. The U.S. District Court for the Northern District of California ordered HP to pay almost $59 million in fines related to the bribery.
They sold products to a reseller partner in Russia, then it bought the products back at a nearly €8 million mark up with an additional €4.2 million in services tacked onto the bill. Those products were then sold to the Office of the Prosecutor General of the Russian Federation at the increased price.
The U.S. Attorney’s office said in a statement: “The payments to the intermediary were then largely transferred through multiple layers of shell companies, some of which were directly associated with government officials. Proceeds from the slush fund were spent on travel services, luxury automobiles, expensive jewelry, clothing, furniture and various other items.”
The bribery was not disclosed to HP officials in the U.S., according to documents.
ZOA Hewlett-Packard, the company’s Russian unit, was found to have paid millions of dollars from a secret fund to bride Russian government officials. Trying to pursue a contract, they have been accused of paying an initial amount of $30mil and a total at $100 million. The U.S. District Court for the Northern District of California ordered HP to pay almost $59 million in fines related to the bribery.
They sold products to a reseller partner in Russia, then it bought the products back at a nearly €8 million mark up with an additional €4.2 million in services tacked onto the bill. Those products were then sold to the Office of the Prosecutor General of the Russian Federation at the increased price.
The U.S. Attorney’s office said in a statement: “The payments to the intermediary were then largely transferred through multiple layers of shell companies, some of which were directly associated with government officials. Proceeds from the slush fund were spent on travel services, luxury automobiles, expensive jewelry, clothing, furniture and various other items.”
The bribery was not disclosed to HP officials in the U.S., according to documents.
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