According to the DOJ, throughout the relevant period PAC improperly recorded payments to an executive (“Foreign Official”) of a state-owned airline in the Middle East (“Middle East Airline”). The DOJ alleged that during the course of negotiating a lucrative contract with the Middle East Airline, PAC executives also were negotiating a consulting position at PAC for the Foreign Official. Once the Foreign Official was installed in the consulting position with PAC, he received $875,000 for “little work,” but PAC recorded the payments as legitimate consulting expenses.
The DOJ also alleged that PAC hired a consultant (“Domestic Airline Consultant”) who was already working as a consultant for a domestic airline (“Domestic Airline”). The Domestic Airline Consultant then allegedly used his position to pass confidential, non-public business information about the Domestic Airline to PAC. PAC allegedly paid the Domestic Airline Consultant
$825,000, which PAC improperly recorded in its books and records as legitimate consulting expenses, even though the services lacked sufficient substantiation.
More broadly, the DOJ also alleged that PAC made payments to sales agents in Asia who did not pass PAC’s compliance due diligence through another sales agent as a means of disguising the payments. Further, PAC allegedly used
funds allocated to the Office of the President Budget to pay its sales agents, but the fund was to subject to oversight or adequate controls to ensure the funds were used for their intended purposes.
