Textron has agreed to pay $4.6 million in fines for bribing officials of Suddam Hussein’s government in order to acquire Iraqi contracts through the United Nations’ Oil-for-Food program. The fines are divided into the amounts of $1.15 million and $3.5 million between the Department of Justice and the U.S. Securities and Exchange Commission, respectively. The [...]

As reported by local Denver media, Colorado’s top federal judge likes to party. Now the FBI is involved, and so are allegations of violations of the Judicial Code of Conduct. Without getting into the sordid details, recently filed court documents show Colorado’s top federal judge, Judge Edward Nottingham, was too drunk to remember how he [...]

The Crane Company, a manufacturer of products, such as valves and marine components, has agreed to pay the United States $7.5 million to resolve False Claims Act allegations, the Justice Department announced today. The government alleges the company did not comply with Defense Department Qualified Products List (QPL) regulations, which require that product suppliers submit [...]

After a five-week trial, former Brocade CEO Gregory L. Reyes was convicted by a federal court jury on 10 counts of conspiracy and fraud over illegal stock option backdating. Mr. Reyes had been accused of intentionally changing the grant dates for hundreds of stock option awards without disclosing the move to investors. Sentencing is scheduled [...]

Houston oilfield services company, Nabors Industries, became the latest oilfield services firm to launch an internal review in response to a federal investigation into possible violations of the Foreign Corrupt Practices Act (FCPA). In a filing with the SEC, Nabors said, “We are reviewing certain transactions with this vendor, which provides freight forwarding and customs [...]

The Senate Finance and Judiciary committees have released the results of their investigation into the SEC’s firing of a former staff lawyer, Gary Aguirre, in September 2005. Mr. Aguirre had been leading the SEC investigation into possible illegal insider trading by large hedge fund Pequot Capital that is run by Arthur J. Samberg. Aguirre was [...]

Two months ago, we noted that British Airways (BA) had set aside $700 million in anticipation of fines from the U.S. Department of Justice on the heels of price-fixing and illegal collusion investigations (as well as to pay for editing to James Bond movies). Now the price has come in and BA and Korean Air [...]

Ryan Brant, the former CEO of Take-Two Interactive Software (maker of popular video games such as “Grand Theft Auto”), has been sentenced to five years of probation for his role in overseeing the fraudulent backdating of stock options. Mr. Brant pleaded guilty in back February. He had been facing up to four years in prison [...]

In a stunning surprise to most, coated-paper maker Stora Enso North America Corp. has been acquitted of price-fixing in a federal jury trial in Connecticut. The company had been indicted by DOJ in December 2006 on charges of conspiring with competitors to fix coated magazine paper prices during 2002-03. Stora’s North American division is a [...]

The CEO of Commerce Bancorp, Vernon W. Hill, is out of a job today. Mr. Hill, founder of the company, was pushed out by the very same board of directors that he had hand-picked to serve over the years (we reviewed Commerce’s code of conduct in the last issue of Ethisphere Magazine by the way [...]

Today, in a Denver courtroom packed with former US West and Qwest employees who lost their savings in the bankruptcy of the company, a federal judge sentenced the former chief executive who presided over the company’s demise to six years in prison. Judge Edward Nottingham also ordered the ex-CEO, Joseph Nacchio, to pay a $19 [...]

The Department of Justice has announced that two former executives of ITXC Corporation have pleaded guilty to violations of the Foreign Corrupt Practices Act (FCPA), and one former executive has been already been sentenced for the violations. Steven J. Ott and Roger Michael Young, former executives of the global telecommunications company, pleaded guilty on July [...]

The DOJ has announced a grand jury indictment of U.S. citizen Jason Edward Steph on charges that he conspired to make corrupt payments to Nigerian officials in violation of the Foreign Corrupt Practices Act (FCPA). Steph, age 37, is a former executive of a subsidiary of Houston-based Willbros Group Inc. According to the indictment, Steph [...]

The U.S. Justice Department is conducting a criminal inquiry of nearly a dozen oil and oil services companies, focusing on potentially illegal payments to customs agents who provided freight forwarding and other services that extended to Nigeria. The SEC is investigating as well. According to Dow Jones, eleven oil and oil service firms received a [...]

The U.S. Department of Justice has joined a whistleblower lawsuit against Fresenius Medical Care AG, the world’s largest dialysis care company, which accuses the company of defrauding Medicare between 1999 and 2005 by filing false claims. Two former employees filed suit against the company, contending that the fraud was an attempt to skirt Medicare’s policy [...]

TRACE International, a non-profit membership association (and important partner of the Ethisphere Council) that helps companies combat bribery, announced the creation of a new database that can help businesses track the prevalence of bribery attempts and requests. This new online tool, called BRIBEline, is backed by many leading organizations and companies such as Wal-Mart, International [...]

This past Friday a federal jury convicted media tycoon Conrad Black and three of his former executives at Hollinger International Inc. of fraud. At issue was whether he illegally pocketed money that should have gone to stockholders. Allegedly when Hollinger sold off newspaper assets, Black illegally diverted millions of dollars in “non-compete payments” to himself [...]

Federal prosecutors were dealt a blow this week as Judge Lewis A. Kaplan of the Federal District Court tossed out tax fraud charges against 13 defendants from the KPMG accounting firm. In this closely-watched and long-running case, Kaplan ruled that prosecutors violated the defendants’ constitutional rights to a fair trial and legal representation by dissuading [...]

Does anyone need further proof that the private and personal lives of CEOs are now fair game and are being intertwined into discussions around compliance, ethics and governance? Okay then, here you go… First of all, CNBC is reporting this morning that Jimmy Cayne, the CEO of Bear Stearns, is being investigated… Investigated for what? [...]

Jazz Pharmaceuticals, Inc. has agreed to pay $20 million in penalties and victim compensation to resolve parallel criminal and civil investigations conducted by the DOJ relating to the illegal marketing practices of its wholly-owned subsidiary Orphan Medical, Inc. (Orphan). As part of this resolution, Orphan pleaded guilty to felony misbranding in violation of the Food, [...]

Agreeing to pay the federal government $16.5 million, Mellon Bank settled claims that it allowed overworked employees to destroy thousands of federal tax returns and payments in 2001. Mellon had a contract with the I.R.S. to process income tax returns and tax-payment checks. Its employees, feeling overwhelmed and unable to meet the deadlines, destroyed over [...]

From our “in-case-you-missed-it-while-out-on-your- holidays-during-July” file the DOJ announced gleefully that four former executives with computer networking and security vendor Enterasys Networks Inc. had been sentenced to long prison terms for their roles in accounting fraud at the company. The executives were originally convicted on conspiracy and fraud charges during a December 2006 trial. In U.S. [...]

Bargain shoppers beware: those money-saving deals might be a little harder to come by in the future. Thanks to a recent overturn of a century-old antitrust law by the Supreme Court, a product’s “suggested retail price” is no longer just a suggestion. The original precedent, set in 1911, made it illegal for manufacturers and retailers [...]

He, and many others, thought he was in the clear. But, former HealthSouth CEO Richard Scrushy, despite pleas for clemency citing a conversion to priesthood, the funding of his church, and his nine children, has been sentenced to six years and ten months in prison for bribery. The charges include six counts of conspiracy and [...]

New Jersey U.S. Attorney Christopher Christie announced that the unusually exhaustive two-year deferred prosecution agreement (DPA) against Bristol-Myers Squibb has come to a close, and the company will not face federal charges for channel stuffing. Bristol-Myers is certainly celebrating, as this particular DPA process was more painstaking than usual: federal prosecutors attended Board of Directors [...]