In the Matter of Jun Ping Zhang (2016) 

• Case Name
• In the Matter of Jun Ping Zhang (2016) 

• Date Filed
• 09/03/2016

• Enforcement Agency
• SEC

• Countries
• China

• Foreign Official
• Unnamed Chinese foreign officials at state-owned hospitals and regional Departments of Health.

• Date of Conduct
• 2011 to 2012

• Nature of Business
• Jun Ping Zhang, a U.S. resident and citizen, is the former Chairman and CEO of Hunan CareFx Information Technology, LLC, a wholly owned Chinese subsidiary of Harris Corporation.  Harris Corporation is a Delaware corporation headquartered in Melbourne, Florida that provides international communications and information technology services for government and commercial markets around the world.  Harris maintains a class of common stock that is registered with the SEC and is listed on the New York Stock Exchange.  CareFx was acquired by Harris in April 2011 and sells electronic medical records software to Chinese state-owned hospitals and local Chinese Departments of Health.  Following the acquisition, CareFx’s books and records were consolidated into Harris’ financial statements.

• Influence to be Obtained
• According to the SEC, from at least April 2011 until April 2012, Ping authorized or indirectly allowed between $200,000 and $1 million in improper gifts to Chinese government officials to obtain or retain business.
  
  As part of the scheme, CareFx’s sales staff allegedly submitted false sales receipts for entertainment, office expenses, or transportation, which were then used to provide gifts to various Chinese government officials.  According to the SEC, Ping and other supervisors managed the sham expense claims and were aware that the reimbursed funds were used to provide improper benefits to government officials.
  
  The SEC also alleges that Ping failed to disclose the true nature of the sales expenses that were recorded on CareFx’s books and records to Harris, either before or after the acquisition.  In fact, the SEC asserts that Ping cautioned CareFx employees to avoid detection by not giving any overly large gifts.

• Enforcement
• On September 13, 2016, the SEC announced that it had settled an FCPA enforcement action against Ping for violations of the FCPA’s anti-bribery, internal controls, and books-and-records provisions.  According to the cease-and-desist order, Ping agreed to pay a civil penalty of $46,000.  However, the SEC declined to pursue charges against Harris Corporation due to its prompt self-reporting, cooperation, and remediation.

• Amount of the Value
•  Approximately $200,000 to $1 million.

• Amount of Business Related to Payment
• Not Stated

• Intermediary
• None

• Citizenship of Parent Entity
• United States

• Total Sanction
• $ 46,000

• Compliance Monitor
• No

• Reporting Requirements
• No

• Case is Pending?
• No

• Total Combined Monetary Sanction
• $ 46,000

Jun Ping Zhang 

• Citation
• In the Matter of Jun Ping Zhang, Admin. Proc. File No. 3-17535 (Sept. 13, 2016).

• Date Filed
• 09/13/2016

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Anti-Bribery
  • Books-and-Records
  • Internal Controls

• Other Statutory Provision
• None

• Disposition
• Cease-and-Desist Order

• Defendant Jurisdictional Basis
• Agent of Issuer

• Defendant's Citizenship
• United States