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In the Matter of Stephen Timms and Yasser Ramahi

 
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Yasser Ramahi
:
SEC Civil
:
November 17, 2014
:
In the Matter of Stephen Timms and Yasser Ramahi
:
In the Matter of Stephen Timms and Yasser Ramahi, Administrative Proceeding File No. 3-16281 (2014)
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The SEC’s charges focused entirely on how providing expensive gifts and entertainment to foreign officials will violate the FCPA.
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Aerospace/Defense
:
Saudi Arabia
:
2009
:
Saudi Arabian Ministry of Interior officials.
:
Yasser Ramahi, a U.S. citizen residing in the United Arab Emirates, is an employee of FLIR Systems, Inc. working in the company’s business development department. FLIR markets and manufactures thermal imaging, night vision, infrared cameras, and other sensing products and systems. FLIR’s common stock is registered under Section 12(b) of the Exchange Act and is listed on the NASDAQ Global Select Market.

In 2008, FLIR entered into a contract with the Saudi Arabian Ministry of Interior (“MOI”) to sell thermal binoculars for approximately $12.9 million. Ramahi and his co-defendant Stephen Timms, were the primary sales employees responsible for the contract. As part of the sales agreement between FLIR and the MOI, FLIR agreed to conduct a “Factory Acceptance Test” that would be attended by MOI officials. FLIR believed that the successful execution of the contract, along with the “Factory Acceptance Test,” would lead to additional business with the MOI in the future.

The “Factory Acceptance Test” was planned for July 2009 in Billerica, Massachusetts. However, in arranging the MOI officials’ travel, Timms and Ramahi organized a 20-night trip with stops in Casablanca, Paris, Boston, New York, Beirut, and Dubai. Timms and Ramahi referred to the MOI officials’ travel as the “World Tour.” According to the SEC, none of the stops, outside of Boston, served a business purpose. Of the 20-night trip, MOI officials spent one, five-hour day, and three separate one to two-hour visits at FLIR’s Boston facility, along with some additional meetings with FLIR personnel at the MOI officials’ hotel. All travel, entertainment, and luxury accommodations was approved by Timms and incurred by Ramahi at FLIR’s expense.

In addition to the “World Tour,” the SEC also alleges that in March 2009, Timms, in the presence of Ramahi, gave expensive watches, worth approximately $7,000 in total, to five MOI officials. According to the SEC, two of these five officials also went on the “world tour” travel.
In July 2009, the SEC order states that FLIR’s finance department flagged Timms’s reimbursement request for the watches, and when questioned, Timms falsely stated that the report should have read the equivalent of 7,000 Saudi Riyal (approx. $1,900) instead of $7,000. At Timms request, Ramahi procured fabricated invoices that stated that the watches were purchased for $1,900 by FLIR’s third-party agent. In September 2009, FLIR’s finance department contacted the third-party agent to confirm the value of the watches, however, unbeknownst to FLIR’s finance department, Timms drafted responses to FLIR’s questions on behalf of the agent to maintain that the watches cost approximately $1,900.

When questioned about the “World Tour,” Timms and Ramahi explained that the MOI had used FLIR’s travel department to arrange the travel and that FLIR’s travel department mistakenly charged FLIR instead of the MOI. To cover up the MOI’s travel expenses, Timms and Ramahi prepared additional false documentation that was submitted to FLIR’s finance department.

Following July 2009, the MOI placed additional orders with FLIR for binoculars and security cameras worth over $19.2 million.
:
Anti-bribery (Issuer), Books and records (Individual), Books and records (Issuer)
:
Cease and Desist
:
Civil monetary penalty of $20,000. Ramahi's co-defendant, Stephen Timms, received a civil monetary penalty of $50,000.
:
20,000
:
0
:
Domestic Concern, Employee of Issuer
:
Regional Sales
:
U.S.
:
United States
:
Contract Procurement/Retention
:
28,000,000
:
Entertainment, Gifts, Travel
:
Not stated.
:
Saudi Arabia
:
No
:
No