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United States v. ABB Vetco Gray, Inc.

 
:
ABB - ABB Vetco Gray, Inc.
:
DOJ Criminal
:
July 6, 2004
:
United States v. ABB Vetco Gray, Inc.
:
U.S. v. ABB Vetco Gray, Inc., No. CR h-04-279 (S.D. Tex. 2004)
:
This is a case arising out of an M&A transaction in which the investors discovered the illegal conduct during pre-merger due diligence. After conducting a joint investigation of the facts, the investors required that ABB voluntarily disclose this conduct and also received assurances of non-prosecution from the DOJ under certain conditions. See Opinion Release 04-02. The transaction closed shortly thereafter.
Approximately three years later, the purchasers sold a substantial portion of its Vetco companies businesses upon resolving a second FCPA criminal proceeding. See Vetco Gray Controls Inc. (2007).

A UK subsidiary of ABB was charged criminally in a related matter. See ABB Vetco Gray (UK) Ltd.
Furthermore, the SEC brought civil proceedings against three UK employees of Vetco's UK affiliate. All of them settled without admitting or denying the allegations in the complaint.
:
Energy (Non-Utility)-Oil & Gas-Exploration/Production
:
Nigeria
:
1998; 1999; 2000; 2001; 2002
:
Officials of the Nigerian National Petroleum Investment Management Services (NAPIMS).
:
From approximately 1998 through 2001, ABB Vetco Gray Inc. and ABB Vetco Gray UK, through their officers and employees, paid bribes and authorized the payment of bribes to officials of NAPIMS. The bribes were intended to induce NAPIMS officials to provide confidential and proprietary information regarding its evaluations of competing bids and thereby providing ABB Vetco Gray Inc. and ABB Vetco Gray UK with a competitive advantage. The bribes were also made to secure favorable consideration on Vetco Gray bids from NAPIMS whose approval was required to receive contract awards.

The profits ABB Vetco Gray generated from contracts with NAPIMS totaled approximately $7,706,030. Payments actually made to NAPIMS officials, in the form of cash, gifts, entertainment, shopping, and club memberships equaled, at a minimum $550,000. Many additional payments were promised to NAPIMS officials but were never approved by ABB Vetco Gray.
:
Anti-bribery (Domestic Concern)
:
Fine, Plea
:
ABB Vetco Gray, Inc. agreed to plead guilty. It also agreed to pay a fine of $5,250,000 and a mandatory special assessment of $800.
:
5,250,800
:
0
:
Total Offense Level: 23 (Base Offense of 8 plus Benefit of 15). Total Culpability Score: 3 (Base Score of 5 plus Involvement in or Tolerance of Criminal Activity of 3 minus Cooperation of 5). A fine range of $3,567,337.20 - $7,134,674.40.

The government agreed to divide the fine between ABB Vetco Gray, Inc. and ABB Vetco Gray (UK), as shown in the entry for ABB Vetco Gray (UK).
:
Domestic Concern
:
U.S.
:
Contract Procurement/Retention
:
215,000,000
:
Cash, Entertainment, Gifts, Wire/check
:
Sales Agent/Consultant
:
550,000
:
Nigeria, United States
:
Yes