Consistent with its new Pilot Program, the DOJ simultaneously issued letters of declination to both HMT LLC and NCH Corporation, however, both companies were also required to disgorge all profits they made from the bribery. Both letters, dated September 29, 2016, represent a new category of enforcement actions by the DOJ, “declinations with disgorgement.” Previously, declinations issued by the DOJ did not require any disgorgement.
Unnamed Venezuelan government officials; Employees of Petróleos de Venezuela, S.A. (“PDVSA”), the Venezuelan stated-owned and state-controlled energy company; Unnamed Chinese government officials.
HMT is a Delaware corporation headquartered in Texas which manufactures, supplies, and services aboveground liquid storage tanks for the petroleum, oil, and gas industries.
According to the DOJ, from approximately 2002 until 2011, an HMT sales agent allegedly bribed Venezuelan government officials to persuade PDVSA to purchase HMT products. To fund these bribes, an agent for HMT allegedly quoted prices to PDVSA which were substantially higher than the price quoted by HMT. PDVSA paid the inflated prices to HMT, which kept the amount it had quoted the agent, and paid the agent the difference as a “commission” and “subcontracting” fees. The SEC claims that a portion of the funds received by the agent was subsequently paid to PDVSA employees and Venezuelan government officials.
Additionally, from approximately 1999 through 2011, an HMT distributor allegedly paid bribes to Chinese government officials in exchange for the purchase of HMT products by Chinese state-owned enterprises.
On September 29, 2016, the DOJ announced that would decline to bring charges against HMT in exchange for HMT’s agreement to disgorge $2,719,412 in ill-gotten gains.