In the Matter of Layne Christensen Company

• Case Name
• In the Matter of Layne Christensen Company

• Date Filed
• 10/27/2014

• Enforcement Agency
• SEC

• Countries
• Burkina Faso, Congo, Dem. Rep., Guinea, Mali, Mauritania, Tanzania

• Foreign Official
• Tax officials in the Democratic Republic of Congo, Guinea, and Mali; Customs agents in Burkina Faso and the Democratic Republic of Congo; Police, border patrol, immigration officials, and labor inspectors in Burkina Faso, Guinea, Tanzania, and the Democratic Republic of Congo; Officials in Burkina Faso, the Democratic Republic of Congo, Tanzania, Mali, and Mauritania.

• Date of Conduct
• 2005 to 2010

• Nature of Business
• Layne Christensen Company is a Texas-based global water management, construction, and drilling company with over 100 offices in Africa, Australia, Europe, South America, and North America.  Its common stock is registered pursuant to Section 12(b) of the Exchange Act.

• Influence to be Obtained
• Between 2005 and 2009, Layne Christensen, through its wholly owned subsidiaries in Africa and Australia, allegedly paid $768,000 to foreign officials in the Republic of Mali, the Republic of Guinea, and the Democratic Republic of Congo.  According to the SEC, Layne Christensen made these payments to reduce its tax liability and to avoid associated penalties for delinquent payment.
  
  The SEC also alleged that Layne Christensen made improper payments to customs officials in Burkina Faso and the Democratic Republic of Congo between 2007 and 2010 to avoid customs duties and to obtain clearance to import and export its drilling equipment.  The improper payments were falsely recorded as legal fees and commissions in the company’s books and records.
  
  During the same period, Layne Christensen is accused of paying more than $23,000 in cash to police, border patrol, immigration officials, and labor inspectors in Burkina Faso, Guinea, Tanzania, and the Democratic Republic of Congo to obtain border entry for its equipment and employees, secure work permits for its expatriate employees, and to avoid penalties for noncompliance with local immigration and labor regulations.  The SEC also claimed Layne Christensen made more than $10,000 in small payments to unspecified “foreign officials” through various customs and clearing agents in Tanzania, Burkina Faso, Mali, Mauritania, and the Democratic Republic of Congo.  The SEC argued that these payments, ranging from $4 to $1,700, were mischaracterized in Layne Christensen’s accounting records.

• Enforcement
• On October 27, 2014, in a standalone action, the SEC announced that it reached a settlement with Layne Christensen for various violations of the FCPA anti-bribery and accounting provisions.  As part of the settlement, Layne Christensen agreed to pay $5,127,193 in sanctions consisting of a civil penalty of $375,000, disgorgement of $3,893,472.42, and pre-judgment interest of $858,720.68.

• Amount of the Value
• Approximately $1 million.

• Amount of Business Related to Payment
• Approximately $3.9 million.

• Intermediary
• Subsidiaries; Customs brokers/agents; Local lawyers.

• Citizenship of Parent Entity
• United States

• Total Sanction
• $ 5,127,193

• Compliance Monitor
• No

• Reporting Requirements
• Yes (2 Years)

• Case is Pending?
• No

• Total Combined Monetary Sanction
• $ 5,127,193

Layne Christensen Company

• Citation
• In the Matter of Layne Christensen Co., Admin. Proc. File No. 3-16216 (Oct. 27, 2014).

• Date Filed
• 10/27/2014

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Anti-Bribery

• Other Statutory Provision
• None

• Disposition
• Cease-and-Desist Order

• Defendant Jurisdictional Basis
• Issuer

• Defendant's Citizenship
• United States