The SEC charged Germany-based insurance and
asset management company Allianz SE with violating the books and records and
internal controls provisions of the Foreign Corrupt Practices Act (FCPA) for
improper payments to government officials in Indonesia during a seven-year
period.
The SEC’s investigation uncovered 295 insurance contracts on
large government projects that were obtained or retained by improper payments
of $650,626 by Allianz’s subsidiary in Indonesia to employees of state-owned
entities. Allianz made more than $5.3 million in profits as a result of the
improper payments.
Allianz, which is
headquartered in Munich, agreed to pay more than $12.3 million to settle the
SEC’s charges.
“Allianz’s subsidiary created
an 'off-the-books' account that served as a slush fund for bribe payments to
foreign officials to win insurance contracts worth several million dollars,”
said Kara Brockmeyer, Chief of the SEC Enforcement Division’s FCPA Unit.
According to the SEC’s
order instituting settled administrative proceedings against Allianz, the
misconduct occurred from 2001 to 2008 while the company’s shares and bonds were
registered with the SEC and traded on the New York Stock Exchange. Two complaints
brought the misconduct to Allianz’s attention. The first complaint submitted in
2005 reported unsupported payments to agents, and a subsequent audit of
accounting records at Allianz’s subsidiary in Indonesia uncovered that managers
were using “special purpose accounts” to make illegal payments to government
officials in order to secure business in Indonesia. The misconduct continued in
spite of that audit.
For more information, visit SEC Charges Germany-Based Allianz SE with FCPA Violations.
