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In re IAP World Wide Services, Inc.

 
:
IAP Worldwide Services, Inc.
:
DOJ Criminal
:
June 16, 2015
:
In re IAP World Wide Services, Inc.
:
U.S. v. IAP World Wide Services, Inc.
:
Aerospace/Defense
:
Kuweit
:
2004; 2005; 2006; 2007; 2008
:
Officials from the Kuwaiti Ministry of the Interior
:
IAP Worldwide Services, Inc. is a Delaware corporation headquartered in Cape Canaveral, Florida. IAP provides facilities management, contingency operations, and professional and technical services in contracting capacities to the U.S. military and civilian agencies. IAP operates in multiple foreign countries around the world, including Kuwait.

According to an agreed upon statement of facts, beginning in 2004 the Kuwaiti Ministry of Interior (MOI) initiated the Kuwaiti Security Program (KSP) to provide nationwide surveillance capabilities for several Kuwaiti government agencies. The KSP would be divided into two phases. Phase I involved a planning stage and Phase II involved the construction stage of the project. It was understood that the revenues generated by Phase II would be greater than those generated by Phase I.

In or about November 2005, IAP and Rama allegedly received non-public indications from the MOI that their bid would be selected for the Phase I contract. Thereafter, the DOJ explained that, at the direction of MOI and an unnamed “Kuwaiti Consultant”, Rama and others established Ramaco as a shell company to bid on the Phase I contract. According to the DOJ, this was done to allow IAP to hide its involvement in Phase I and participate in Phase II without any apparent conflict of interest.

Ramaco would ultimately win the KSP Phase I contract for approximately $4 million. According to the DOJ, IAP and Rama agreed to divert $2 million of the revenues from the Phase I contract to the Kuwaiti Consultant who, in turn, would use the money to bribe MOI officials. The alleged bribes were intended to ensure IAP retained the Phase I contract and was awarded the Phase II contract.

To execute the alleged scheme, IAP and Rama also used an unnamed “Kuwaiti Company”, a general trading company established under the laws of Kuwait, to make payments to the Kuwaiti Consultant. The DOJ asserts that IAP and Rama knew that Kuwaiti Company inflated its invoices to IAP by charging IAP for the total amount of both legitimate services rendered by Kuwaiti Company and payments being funneled to Kuwaiti Consultant. In total, from September 2006 to March 2008, IAP and Rama are accused of funneling $1,783,688 in illicit payments to the Kuwaiti consultant for use as bribes.

On June 16, 2015, the DOJ announced that it settled charges against IAP through a non-prosecution agreement. In exchange, IAP agreed to pay a monetary penalty of $7.1 million.
:
Anti-bribery (Domestic Concern)
:
Non-prosecution Agreement
:
Monetary penalty of $7.1 million.
:
7,100,000
:
0
:
Domestic Concern
:
U.S.
:
United States
:
Contract Procurement/Retention
:
Not stated.
:
Wire/check
:
Sales Agent/Consultant, Shell entity, Subsidiary Company
:
1,783,688
:
Kuweit
:
No
:
No