Finally they start to receive payback for some of things they have done. Not a good Time to be a shareholder.
Diebold Inc.'s headquarters is in Green, south of Akron. courtesy Plain Dealer file Cleveland.com
By James F. McCarty
22 October 2013
CLEVELAND, Ohio – Federal prosecutors Tuesday filed charges against Diebold Inc., accusing the North Canton-based ATM and business machine manufacturer of bribing government officials and falsifying documents in China, Indonesia and Russia to obtain and retain contracts to provide ATMs to banks in those countries.
The two-count criminal information and deferred prosecution agreement calls for Diebold to pay nearly $50 million in penalties: $23 million to the U.S. Securities and Exchange Commission, and $25 million to the Department of Justice.
The agreement with federal prosecutors also calls for the implementation of rigorous internal controls that includes a compliance monitor for at least 18 months. The government agreed to defer criminal prosecution for three years, and drop the charges if Diebold abides by the terms of the agreement.
Federal prosecutors acknowledged that Diebold officials voluntarily disclosed the criminal activity, cooperated with government investigators, and conducted its own extensive internal investigation.
Diebold spokesman Mike Jacobsen called the settlement agreement “an important step for the company moving forward.”
“It’s imperative for Diebold to recognize these issues head on, acknowledge responsibility, put the investigation period behind it and get on with the business of managing the company,” Jacobsen said in a prepared statement.
The prosecution agreement includes provisions for Diebold executives and employees to assist federal law enforcement and regulatory authorities, and to testify before a grand jury, if necessary. U.S. Attorney Steven Dettelbach said the nation’s laws apply no matter in what country a company does business.
“Companies that pay bribes to public officials, whether those officials are in Cleveland, in Ohio or overseas, violate the law,” Dettelbach said.
Dettelbach said the fines were designed to recoup bribes paid by Diebold officials overseas, and to punish the company for “a worldwide pattern of criminal conduct.”
“Corporate earnings cannot be placed above the rule of law, and today’s penalties – nearly $50 million in all – send the message again, loud and clear, that such conduct is unacceptable. We hope that Diebold will use this opportunity, including the internal controls and compliance monitor required by today’s agreement, to turn the page to a newer and more ethical corporate culture,” Dettelbach said.
Acting Assistant Attorney General Mythili Raman said fighting global corruption is a mainstay of the Justice Department’s mission.
“Through its corrupt business practices, Diebold undermined the sense of fair play that is critical for the rule of law to prevail,” Raman said.
The charges and prosecution agreement “holds Diebold accountable for its criminal conduct, while also recognizing its cooperation and voluntary disclosure to the government of its conduct,” Raman said.
According to court documents, from 2005 to 2010, executives and employees from Diebold's Asia Pacific region paid $1.75 million in bribes, gifts and trips to dozens of employees of banks in China and Indonesia. The bribes were paid in order to secure and retain business with bank customers, including state-owned and state-controlled banks.
Diebold attempted to disguise the payments and benefits in various ways, including by making payments through third parties designated by the banks, and by inaccurately recording leisure trips for bank employees as “training.”
The court documents also accuse Diebold employees, over a four-year period, of creating and entering into false contracts with a distributor in Russia for services that the distributor was not performing. The distributor, in turn, used the Diebold funds to pay bribes to employees of Diebold’s privately-owned bank customers in Russia in order to obtain and retain ATM-related contracts with those customers.
The case was investigated by agents from the FBI’s Cleveland office, and will be prosecuted by Assistant U.S. Attorney Justin Roberts, with the assistance of prosecutors from Justice Department’s Criminal Fraud Section.
According to Diebold’s corporate web site, the 150-year-old company employs about 16,000 people in 90 countries, and reported revenues last year of $3 billion.
original article found here
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