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U.S. v. The NORDAM Group, Inc.

 
:
The NORDAM Group, Inc.
:
DOJ Criminal
:
July 17, 2012
:
U.S. v. The NORDAM Group, Inc.
:
U.S. v. The NORDAM Group, Inc. (non-prosecution agreement)
:
The DOJ imposed a fine below the standard range under the U.S. Sentencing Guidelines because NORDAM fully demonstrated to the DOJ, and an independent accounting expert retained by the DOJ verified, that a fine exceeding $2 million would substantially jeopardize the company's continued viability.
:
Aircraft
:
China
:
1999; 2000; 2001; 2002; 2003; 2004; 2005; 2006; 2007; 2008
:
Employees of airlines created, controlled and exclusively owned by the People's Republic of China.
:
The NORDAM Group, Inc. ("NORDAM"), a Delaware corporation, is a provider of aircraft maintenance, repair and overhaul ("MRO") services based in Tulsa, Oklahoma.

According to the non-prosecution agreement entered into between NORDAM and the DOJ, NORDAM and its Singapore-based subsidiaries and affiliates paid bribes to employees of airlines created, controlled and exclusively owned by the People's Republic of China in order to secure contracts to perform MRO services for those airlines.

The bribes were paid both directly and indirectly to airline employees, and were referred to internally as "commissions" or "facilitator fees." The facilitator fees were paid to "facilitators," which were, in fact, employees of customers. The facilitators were also referred to internally as "internal guys," "internal ghosts," or "our friends inside."

In an effort to disguise the bribes, three employees of NORDAM's affiliate entered into sales representation agreements with fictitious entities and then used the money paid by NORDAM to those entities to pay bribes to the airlines employees.

Although many of the bribe payments were paid out of NORDAM's gross profits, in some instances NORDAM and its affiliates artificially inflated the customer invoice to offset the bribes paid to those customers' employees. As a result, in these instances, NORDAM's customers were unknowingly reimbursing NORDAM for the bribes that NORDAM paid to customer employees to secure the projects.
:
Anti-bribery (Domestic Concern)
:
Non-prosecution Agreement
:
Three-year nonprosecution agreement, under which NORDAM agreed to pay a monetary penalty of $2 million. The nonprosecution agreement noted that the fine was substantially below the standard range under the U.S. Sentencing Guidelines, as NORDAM had fully demonstrated to the DOJ that a fine exceeding $2 million would substantially jeopardize the company's continued viability.
:
2,000,000
:
0
:
Domestic Concern
:
U.S.
:
Contract Procurement/Retention
:
2,480,000
:
Cash, Wire/check
:
Shell entity, Subsidiary Company
:
1,500,000
:
China
:
China
:
No
:
No