WASHINGTON - Comverse Technology Inc. (CTI), a New York City headquartered corporation, has agreed to pay a $1.2 million penalty for violations of the Foreign Corrupt Practices Act (FCPA), announced Assistant Attorney General Lanny A. Breuer of the Criminal Division. CTI, through its main operating subsidiary Comverse Inc. and Comverse Inc.’s subsidiaries, is a global provider of software and software systems for communication and billing services.
According to the non-prosecution agreement, CTI has accepted responsibility for violating the books and records provisions of the FCPA arising from and related to CTI’s failure to record accurately certain improper payments that were made between 2003 and 2006 by employees and a third-party agent of Comverse Inc. subsidiaries to individuals connected to OTE, a Greek telecommunications provider, in order to obtain purchase orders. The payments, totaling approximately $536,000, were inaccurately characterized as legitimate agent commissions in the books and records of Comverse Ltd., a wholly owned subsidiary of Comverse Inc. that is based in Tel Aviv, Israel.
The agreement recognizes the company’s thorough self-investigation and the results of its investigation, voluntary disclosure of the underlying conduct, and full cooperation with the department. CTI has also undertaken extensive remedial efforts and overhauled its overall compliance culture, including through the implementation of mandatory training programs focused on anti-corruption and the use of third-party agents and intermediaries, as well as more rigorous accounting controls for the approval of third-party payments.
As a result of these mitigating factors, the department has agreed not to prosecute CTI or its subsidiaries for failing to maintain accurate books and records, provided that CTI satisfies its obligations under the agreement for a period of two years. Those obligations include ongoing cooperation, payment of the $1.2 million penalty, and the continued implementation of rigorous internal controls.
In a related matter, CTI reached a settlement today with the U.S. Securities and Exchange Commission in which it agreed to pay approximately $1.6 million in disgorgement and pre-judgment interest.
This case is being handled by Trial Attorney Amanda Aikman of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Ilene Jaroslaw of the U.S. Attorney’s Office for the Eastern District of New York. The department acknowledges and expresses its appreciation for the significant assistance provided by the staff of the SEC during the course of this investigation.