Skip to main content
Press Release

Ericsson Agrees To Pay More Than $1 Billion To Resolve Foreign Corrupt Practices Act Case

For Immediate Release
U.S. Attorney's Office, Southern District of New York

Geoffrey S. Berman, the United States Attorney for the Southern District of New York (“SDNY”), Brian A. Benczkowski, the Assistant Attorney General for the Criminal Division of the Department of Justice (“DOJ”), and Don Fort, Chief of the Criminal Investigation Division, Internal Revenue Service (“IRS-CI”), announced today the filing of criminal charges against TELEFONAKTIEBOLAGET LM ERICSSON (“ERICSSON”), a multinational telecommunications company headquartered in Sweden, and its subsidiary ERICSSON EGYPT LTD. (“ERICSSON EGYPT”) for conspiring to violate the Foreign Corrupt Practices Act (“FCPA”) by bribing government officials, falsifying books and records, and failing to implement reasonable internal accounting controls.  The resolutions cover criminal conduct in Djibouti, China, Vietnam, Indonesia, and Kuwait. 

Mr. Berman also announced that in connection with the filed charges, ERICSSON EGYPT pled guilty today before United States District Judge Alison J. Nathan, and SDNY and DOJ entered into a deferred prosecution agreement (“DPA”) with ERICSSON.  Pursuant to the DPA, ERICSSON admitted to participating in the charged conspiracy.  ERICSSON will pay a total criminal penalty of $520,650,432 to the United States, which includes a $9,520,000 criminal fine that ERICSSON agreed to pay on behalf of ERICSSON EGYPT.  ERICSSON also agreed to implement rigorous internal controls, retain an independent compliance monitor for a term of three years, and cooperate fully with the Government in any ongoing investigations.

In related proceedings, ERICSSON reached a settlement with the U.S. Securities and Exchange Commission (“SEC”).  Under the terms of its civil resolution with the SEC, ERICSSON agreed to pay $539,920,000 in disgorgement of profits and prejudgment interest, which, together with the criminal penalty paid to the United States, yields total criminal and regulatory penalties to be paid by ERICSSON of $1,060,570,432.

U.S. Attorney Geoffrey S. Berman said:  “Today Swedish telecom giant Ericsson has admitted to a years-long campaign of corruption in five countries to solidify its grip on telecommunications business.  Through slush funds, bribes, gifts, and graft, Ericsson conducted telecom business with the guiding principle that ‘money talks.’  Today’s guilty plea and surrender of over a billion dollars in combined penalties should communicate clearly to all corporate actors that doing business this way will not be tolerated.”

Assistant Attorney General Brian A. Benczkowski said:  “Ericsson’s corrupt conduct involved high-level executives and spanned 17 years and at least five countries, all in a misguided effort to increase profits.  Such wrongdoing called for a strong response from law enforcement, and through a tenacious effort with our partners in the Southern District of New York, the SEC, and the IRS, today’s action not only holds Ericsson accountable for these schemes, but should deter other companies from engaging in similar criminal conduct.”

IRS Criminal Investigation Chief Don Fort said:  “Implementing strong compliance systems and internal controls are basic principles that international companies must follow to steer clear of illegal activity.  Ericsson’s shortcomings in these areas made it easier for its executives and employees to pay bribes and falsify its books and records.  We will continue to pursue cases such as these in order to preserve a global commerce system free of corruption.”

According to the allegations contained in the criminal Informations, which were filed today in Manhattan federal court, the statement of facts set forth in the DPA, and other publicly available information:

From approximately 2000 to 2016, ERICSSON and ERICSSON EGYPT, through various executives, employees, and affiliated entities, used third-party agents and consultants to bribe foreign government officials and/or manage off-the-books slush funds in countries where it pursued contracts to conduct telecommunications business.  The agents were often engaged through sham contracts and paid pursuant to false invoices, with those payments accounted for improperly in ERICSSON’s books and records.

In Djibouti, from approximately 2010 to 2014, ERICSSON, via subsidiaries, paid approximately $2.1 million in bribes to high-ranking government officials in order to obtain a contract valued at approximately €20.3 million.  To conceal the bribe payments, an ERICSSON subsidiary entered into a sham contract with a consulting company and approved fake invoices to conceal the bribe payments, and ERICSSON employees completed a draft due diligence report that failed to disclose that the owner of the consulting company was married to a high-ranking official in Djibouti’s government.

In China, from approximately 2000 to 2016, ERICSSON, via subsidiaries, paid various agents, consultants, and service providers tens of millions of dollars, a portion of which was used to fund an expense account that covered gifts, travel, and entertainment for foreign officials.  ERICSSON used the expense account to win business with Chinese state-owned customers.  In addition, from approximately 2013 to 2016, ERICSSON subsidiaries paid third-party service providers approximately $31.5 million pursuant to sham contracts for services that were never performed.  The payments were intended to allow ERICSSON’s subsidiaries to continue to use and pay third-party agents in China in contravention of ERICSSON’s policies and procedures.  ERICSSON knowingly mischaracterized the payments and improperly recorded them in its books and records.

In Vietnam, from approximately 2012 to 2015, ERICSSON, via subsidiaries, paid a consulting company approximately $4.8 million in order to create off-the-books slush funds.  The slush funds were then used to make payments to third parties who would not be able to pass ERICSSON’s due diligence processes.  ERICSSON knowingly mischaracterized these payments, which were made pursuant to sham contracts for services that were never performed, and improperly recorded them in ERICSSON’s books and records. 

In Indonesia, from approximately 2012 to 2015, ERICSON, via a subsidiary, paid a consulting company approximately $45 million in order to create off-the-books slush funds.  ERICSSON took active steps to conceal the payments, which were made pursuant to sham contracts for services that were never performed.

In Kuwait, from approximately 2011 to 2013, ERICSSON, via a subsidiary, paid a consulting company approximately $450,000 at the request of a sales agent who had given ERICSSON inside information about the bidding process for a lucrative contract with a state-owned telecommunications company.  ERICSSON made the payment after one of its subsidiaries was awarded the contract, which was valued at approximately $182 million.  The payment was made pursuant to a sham contract for services that were never performed.

*                *                *

ERICSSON EGYPT was charged with, and pled guilty to, one count of conspiring to violate the anti-bribery provisions of the FCPA.  ERICSSON was charged in a two-count Information with one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of conspiracy to violate the internal-controls and books-and-records provisions of the FCPA.

Mr. Berman thanked the Fraud Section of the DOJ’s Criminal Division for its collaboration, and praised the investigative efforts of IRS-CI and law enforcement authorities in Sweden.  He also thanked the SEC’s Division of Enforcement for its significant assistance and cooperation in the investigation.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit and the FCPA Unit of the Fraud Section of DOJ’s Criminal Division.  Assistant U.S. Attorneys David Abramowicz and Won S. Shin, and Acting Assistant Chief Andrew Gentin and Trial Attorney Michael Culhane Harper of the Criminal Division’s Fraud Section, are in charge of the prosecution.


Jim Margolin, Nicholas Biase
(212) 637-2600

Updated December 6, 2019

Foreign Corruption
Press Release Number: 19-420