A former regional director of SAP International Inc. pleaded guilty to conspiracy to violate the Foreign Corrupt Practices Act by participating in the bribery of Panamanian officials for a $14.5 million technology upgrade contract, the US Dept. of Justice said.
Vicente Eduardo Garcia, 65, of Miami, pleaded guilty to a “one-count information charging him with conspiracy to violate the anti-bribery provisions of the FCPA,” the DOJ said in an Aug. 12 press release. Sentencing in US District Court in the Northern District of California is scheduled for Dec. 16, 2015.
The US Securities and Exchange Commission, in a separate civil case, said Garcia agreed to pay disgorgement of $85,965, which is the total amount of kickbacks he received, plus prejudgment interest of $6,430 for a total of $92,395 for violating the anti-bribery and internal controls provisions of the Securities Exchange Act of 1934.
Garcia essentially caused SAP, which is headquartered in Germany and executes most of its sales through a network of worldwide corporate partners, to sell software to a partner in Panama at discounts of up to 82 percent, the SEC said.
According to plea documents, SAP sought a multi-million dollar contract to provide a Panamanian state agency with a technology upgrade package in 2009.
Garcia admitted that he conspired with others, including advisors and consultants to SAP, to pay bribes to two Panamanian government officials, as well as to the agent of a third government official (with the understanding that at least a portion of the money would be transmitted to the third official), the DOJ said.
He also admitted that the conspirators used sham contracts and false invoices to disguise the true nature of the bribes and that he believed paying such bribes was necessary to secure both the initial contract and additional Panamanian government contracts.
Ultimately, SAP’s Panamanian channel partner secured the technology contract, which included $2.1 million in SAP software licenses. Soon afterward, the government awarded SAP’s channel partner additional contracts that included the provision of SAP products.
The SEC said the software discounts enabled the partner to create a slush fund from its excessive earnings on the other end of the sales and tap that money to pay the bribes to Panamanian government officials. Garcia also received kickbacks from the slush fund into his bank account.
According to the SEC’s order instituting a settled administrative proceeding:
