A&O Shearman FCPA Digest | SEC v. Diebold, Inc. (D.D.C. 2013)

Source Documents

Foreign Official
Employees of state-owned banks in China; Employees of state-owned banks in Indonesia.

Nature of Business
Diebold, Inc., an Ohio company, is a global provider of automated teller machines and bank security systems. Diebold’s common stock is registered pursuant to Section 12(b) of the Exchange Act and is listed on the New York Stock Exchange.

Influence to be Obtained
According to the SEC’s Complaint, Diebold repeatedly provided payments, gifts, and non-business travel for employees of state-owned and controlled banks in China and Indonesia to secure and retain business with those banks. Diebold attempted to disguise the payments and benefits through various means, including by making payments through third-parties designated by the banks and by inaccurately recording leisure trips for bank employees as “training.”

Diebold also created and entered into false contracts with a distributor in Russia for services that the distributor was not performing. The distributor, in turn, used the funds to pay bribes to employees of Diebold’s privately owned bank customers in Russia to obtain and retain contracts with those customers. However, no government officials were alleged to be involved in the Russia scheme.

Enforcement
On October 22, 2013, Diebold consented to the entry of final judgment enjoining it from committing further FCPA violations. Diebold agreed to pay $22,972,942 in disgorgement and prejudgment interest and to appoint an independent compliance monitor.

In a parallel criminal proceeding, Diebold entered into a deferred prosecution agreement with the DOJ, under which it agreed to pay a $25.2 million fine.