This is the first instance in which the Department of Justice interpreted "agent" to include distributors and wholesalers, and adopted the position that deep discount may constitute a payment to an intermediary.
In the resolution of this matter, the Department of Justice required the acquirer (GE) in this M&A transcaction to undertake certain obligations with respect to InVision's future compliance program.
The monitor in this case was charged with monitoring the implementation of GE's program at InVision, but if the transaction had not closed, the agreement provided for a more traditional monitorship, with a broader scope and longer term.
China, Philippines, Thailand
2001; 2002; 2003; 2004
Officials of the government of the Philippines; Filipino political parties; Officials of Chinese state-owned general construction company; Officials of Chinese state-owned importing company; Officials of the government of Thailand; Thai political parties
In 2001, InVision, a U.S. Corporation and issuer, which sells explosive detection systems used at airports, sold two baggage screening machines to a subcontractor of the Government of the Philippines. After this, a sales agent for InVision attempted to sell additional baggage screening machines to Filipino government officials for other airports. In June or July 2002, InVision paid the sales agent a commission of $108,000. At the time of this payment, there was a "high probability" that InVision knew that this commission was going to be used to induce government officials to sign additional contracts.
In 2002, InVision entered into a contract to sell two baggage screening machines and related services to one of their sales agents, Agent B. Agent B intended to resell the baggage screening machines to an importer that was owned and controlled by the Chinese government. InVision experienced a delay in performing the contract and delivered the machines late. The Chinese importer was a subcontractor to Company B, a company formed by the Chinese government to build a new airport hub. Both the Chinese importer and Company B threatened to impose a financial penalty upon InVision for failing to perform. InVision authorized payment of $95,000 to Agent B. At the time of this payment, there was a "high probability" that InVision knew that this commission was going to be used to induce Chinese government officials to pardon the penalty.
In 1996, the Government of Thailand planned to build a new airport in Bangkok and formed Company A to oversee this project. Company A hired a General Contractor to construct the airportâ€™s terminal and concourse buildings. The General Contractor hired a subcontractor to construct a hold baggage screening system (HBS contract). In 2004, InVision entered into a contract to sell 26 baggage screening machines and related services to a Thai subcontractor. At the time of this contract, there was a "high probability" that InVision was aware that the subcontractor was making payments to Thai officials that were derived from the difference between the price paid to InVision by the subcontractor for the Company A contract and the price received by the subcontractor for its performance of the HBS subcontract. These payments were done in order to assist InVision in obtaining and retaining business from the Thai government.
In December 2004, InVision Technologies, Inc. and the DOJ entered into a non-prosecution agreement whereby InVision agreed to certain conditions in exchange for a promise from the DOJ that it would not be prosecuted. In this non-prosecution agreement, InVision agreed to pay a fine of $800,000.00, accept responsibility for the misconduct, continue to cooperate with the DOJ, and adopt an FCPA compliance program as well as a set of internal controls designed to prevent future violations. It also agreed to an independent compliance monitor whose role would be to monitor InVision's compliance with the agreement and report to the DOJ.