Employees of subsidiaries of Hellenic Telecommunications Organisation S.A., which is partially owned by the Greek government.
From 2003 to 2006 Comverse Limited, a wholly-owned, Israel-based subsidiary of Comverse Technology, Inc., a U.S. issuer, engaged in a scheme to bribe officials of the Greek government to obtain purchase orders and to falsify its books and records.
In 2003, Comverse Limited engaged an Agent to establish a shell company, which was identified in the related SEC pleadings as Fintron Ltd., in Cyprus. Comverse Limited then made cash payments through the shell company to potential and existing customers, including employees of the Hellenic Telecommunications Organisation S.A. (OTE), which is partially owned by the Greek government. Those customers, in exchange, secured purchase orders for Comverse Limited from the OTE and others. In total, it appears that Converse Limited paid $536,000 in bribes through the shell company in exchange for the facilitation of $1.25 million in business.
From 2003 through about 2007, employees of Comverse Limited falsely recorded these payments as "commission expenses," and, after a series of transactions involving the Agent and Comverse Limited employees, transferred payments from Comverse Limited's bank account in Israel to one of the shell company's bank accounts in Cyprus. A Comverse Limited employee would ordinarily withdraw the payment amount and deliver it, either directly or through an intermediary, to the customers that secured purchase orders for Comverse Limited. Comverse Limited then falsified records which were incorporated into the books, records, and accounts used to prepare Comverse Technology, Inc.'s quarterly financial statement for the period ending October 31, 2005 and the year-end financial statement for the period ending January 31, 2005.