On April 8, 2015 the SEC announced a $9.5 Million FCPA settlement with Oregon-based, infrared imaging company FLIR Systems Inc. The settlement concerned FLIR employees’ conduct in the Middle East, specifically that FLIR paid for what an employee termed a “world tour” of personal travel for government officials who played key roles in decisions to purchase FLIR products for the Saudi Arabia Ministry of the Interior. FLIR employees arranged for a 20-night excursion by Saudi officials that included stops in Casablanca, Paris, Dubai, Beirut, and New York City. Public officials were also given gifts including expensive watches. All of which were concealed by the FLIR employees involved and consequently mis-recorded in the company’s accounts. This conduct was found to have breached the anti-bribery, books and records and internal controls provisions of the FCPA. The FCPA violations related to approximately $40,000 in travel and gifts valued at approximately $7,000. FLIR was deemed to have made over $7 Million in profits from the relevant contracts with the Saudi Arabia Ministry of the Interior. These profits were disgorged by the SEC and along with pre-judgment interest and an administrative penalty of $1 Million, account for the total settlement of $9.5 Million. In the SEC press release that accompanied the settlement, Kara Brockmeyer (Chief of the SEC’s FCPA Unit) stated: “FLIR’s deficient financial controls failed to identify and stop the activities of employees who served as de facto travel agents for influential foreign officials to travel around the world on the company’s dime.” However the SEC also acknowledged and gave the company credit for having investigated the matter, made voluntary disclosure of the issue, cooperated with the SEC’s investigation and remediated the issue. Prior to its settlement with the company, in November 2014, the SEC had brought an administrative action against two of FLIR’s former sales employees involved in the conduct. The DOJ has apparently declined to prosecute the matter. The SEC’s press release on the settlement, along with its administrative order with FLIR can be found here.
Geoff Martin is a Senior Associate at Baker McKenzie's Litigation and Government Enforcement practice group in Washington, DC. Geoff started his career in Baker McKenzie's London office in 2007 and moved to Washington DC in 2012. Geoff represents clients in matters before the federal government arising out of anti-corruption, trade sanctions, fraud, anti-money laundering, national security, and related enforcement actions. He also represents clients in civil and criminal matters in federal court. Geoff has extensive experience conducting internal investigations relating to such matters around the world.