DOJ hits Ericsson again for corruption

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Swedish telecommunications company Ericsson has agreed to plead guilty and pay more than $206 million as part of a new settlement with the U.S. Department of Justice for corrupt practices and violating the terms of a previous misdemeanor settlement, department officials said Thursday.

The sanctions against Ericsson come as Justice Department officials have pledged to get tougher on corporate crime. But the Ericsson case highlights what critics of the department say has been a years-long pattern of giving companies deferred prosecution deals that let them easily break.

In 2019, Ericsson entered into a deferred prosecution agreement with the US government for using third-party agents and consultants to bribe government officials and operate funds in China, Djibouti, Indonesia and Vietnam. As part of that settlement, the company paid a $520 million criminal penalty. Now, US officials say the company violated the terms of that agreement by covering up other allegations of corrupt behavior, including additional wrongdoing in Djibouti and China. Ericsson also failed to disclose allegations and evidence of misconduct in Iraq, officials said.

Last year, the Washington Post reported that company executives failed to disclose a decade of alleged wrongdoing in Iraq, including allegations of fraud, bribes and kickbacks.

Ericsson did telecommunications operations in areas of Iraq that fell into the hands of ISIS

The Stockholm-based company said in a written statement Thursday that “no new illegal conduct has been reported or charged today,” adding that the Justice Department informed the company “that it did not provide documents and information” to the department “in a timely manner” and had “failed to adequately report” information about an internal investigation related to its operations in Iraq.

Ericsson CEO Börje Ekholm said in a written statement that the new settlement “is a stark reminder of the historic misconduct” that led to the deferred prosecution agreement in 2019. “We have learned from this and are on an important journey to transform our culture.”

The Justice Department under Biden has pledged to more aggressively and effectively investigate and prosecute corporate wrongdoing, including in a series of speeches this week to private-sector lawyers.

“Ericsson has not learned its lesson and now faces a heavy price for its continued mistakes,” said Damian Williams, the U.S. attorney in Manhattan.

A federal judge has yet to approve the plea agreement, which calls for Ericsson to plead guilty to the two original charges from the 2019 deferred prosecution agreement, both violations of the Foreign Corrupt Practices Act.

The new settlement will also require Ericsson to be on probation until June 2024.

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