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Panasonic Corp. will pay about $280 million to resolve U.S. allegations that executives at its in-flight-entertainment unit improperly hid payments to consultants in the Middle East and Asia, some of whom did little to no work for the company.
The Panasonic parent company, in a settlement announced Monday, will pay $143 million in disgorgement to the Securities and Exchange Commission, while Panasonic Avionics Corp. agreed to pay about $137 million in penalties to the Justice Department for violations of the accounting provisions of the Foreign Corrupt Practices Act.
In addition, Panasonic Avionics entered into a deferred-prosecution agreement filed Monday alongside a criminal information in Washington federal court.
U.S. prosecutors accused Panasonic Avionics of engaging in several schemes, running from 2007 to 2016, to falsely record payments to sales agents and a former foreign official as legitimate consulting expenses.
In one scheme, which ran for nearly a decade, Panasonic Avionics hid more than $7 million in payments to sales agents in Asia, some of whom didn’t pass due diligence checks, according to prosecutors.
In July 2007, Panasonic Avionics executives moved to hire a foreign official as a consultant at the same time that official was negotiating a contract amendment between a Middle East airline and the company that resulted in more than $353 million in revenue to Panasonic. The official, who was ultimately hired by Panasonic Avionics, did little work over the next six years while receiving $875,000 in compensation, the filing says.
©2018 Bloomberg L.P.