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In the News: Bribery Costs Trickle Down

 

Bribery and corruption can be costly factors for businesses affecting both the bottom line and reputation. Here are some cases making headlines now that are costing businesses or taxpayers money that should have been directed elsewhere.

Networking company takes hit on Foreign Corrupt Practice Charges

A networking & cybersecurity company will pay $11.7 million to settle charges with the Securities and Exchange Commission following a string of overseas cases where subsidiaries created slush funds for bribes.

The SEC order says the bribery happened from 2008 to 2013 when the company’s subsidiary in Russia increased phony discounts that never reached customers and instead were diverted into a slush fund. That fund was used for free trips to places where there were no corporate facilities or conferences related to its line of work, says a blog by Matt Kelly at radicalcompliance.com.

The company reported in 2017 that the Justice Department had decided against any criminal prosecution.

Source: radicalcompliance.com

Massachusetts mayor charged with extortion and bribery

Jasiel F. Correia, the Mayor of Fall River, Massachusetts, has been arrested and charged for allegedly extorting marijuana vendors for hundreds of thousands of dollars in bribes. He is also accused of extorting a building owner for cash and a Rolex watch in exchange for activating the water supply to a commercial building and demanding that his chief of staff give him half of her salary in return for appointing her and allowing her to keep her city job.

Correia’s former Chief of Staff was also charged with extortion, theft and bribery, and issuing a false statement. Both appeared in federal court in September.

U.S. Attorney Andrew Lelling said “If the allegations in (the) indictment are true, Mayor Correia has engaged in an outrageous, brazen campaign of corruption which turned his job into a personal ATM.”

Authorities said four other associates of the mayor are also charged, including Correia’s former chief of staff, Genoveva Andrade, for alleged extortion and bribery.

“I’m not guilty of these charges,” Correia said. “I’ve done nothing but good for the city of Fall River.”

Source: U.S. Dept. of Justice

Union rep guilty in bribe and kickback scheme

Michael Grimes, a former high-level official in an autoworker’s union, pleaded guilty Sept. 4 to conspiring with other union officials to engage in fraud by taking over $1.5 million in bribes and kickbacks from vendors and contractors and to conspiring to launder the proceeds of the scheme.

Michael Grimes, 65, of Ft. Myers, Florida pleaded guilty to wire fraud and to conspiring to launder money between 2006 and 2018.  During the plea hearing, Grimes admitted that he conspired with two other high-level union officials to take millions of dollars in bribes and kickbacks from vendors doing business with the union. He admitted that over the course of the 12-year conspiracy, he and the other two union officials demanded bribes and kickbacks from the vendors in exchange for securing or maintaining contracts.

Grimes also admitted that he conspired to launder the proceeds of the kickback scheme by using various methods to conceal and disguise the bribes and kickbacks through a lengthy and complicated series of financial transactions involving millions of dollars.

Grimes is the ninth defendant to plead guilty in connection with the ongoing criminal investigation.

Source: U.S. Dept. of Justice

Top St. Louis political aide sentenced to prison in bribery scheme

The top aide for former St. Louis County Executive Steve Stenger was sentenced in September to 15 months in federal prison for helping Stenger carry out his pay-for-play scheme.

Bill Miller, Stenger’s chief of staff, pleaded guilty in May to theft of services through bribery and wire fraud. He is among four people who have pleaded guilty in the case.

Stenger was sentenced to nearly four years in prison and fined $250,000. He pleaded guilty in May to corruption charges for providing political favors in exchange for donations to his Democratic campaign.

The county’s former economic development agency chief, Sheila Sweeney, was sentenced to probation and fined $20,000 for her role in the scheme. Businessman John Rallo faces sentencing in for bribery.

Stenger admitting taking actions to ensure that county contracts went to two Rallo-owned companies and ensuring that Rallo obtained options to buy two properties held by the county’s land authority.

Source: KMOX

Former Real Estate zoning official pleads guilty to bribery

A Boston zoning official has agreed to plead guilty to federal charges he accepted $50,000 in bribes from a real estate developer in exchange for a permit that boosted the value of the developer’s Boston property by at least $500,000.

John M. Lynch, 66, a former assistant director of real estate at an economic development corporation, agreed to plead guilty to one count of bribery involving an organization receiving federal funding and one count of filing a false income tax return.
According to the terms of a plea agreement, the government will recommend to the Court a sentence within the range of 46 to 57 months’ imprisonment.

Source: U.S. Dept. of Justice

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About Anu Sood

Anu Sood (LinkedIn | Twitter) is the Director Marketing at CaseWare RCM and is responsible for the company’s global marketing strategy. She has over 20 years of experience in product development, product management, product marketing, corporate communications, demand generation, content marketing and strategic marketing in high-tech industries.